Effect Of Accelerator Programs On Business Success Among Technology Startups In Kenya

ABSTRACT

Accelerator programs in the developed world have had tremendous success in nurturing startups to the point where these organizations have gone on to be large global organizations operating in multiple jurisdictions, hiring thousands of employees, increasing their valuations and enriching employees and investors alike. However, despite the high number of accelerators/incubators/hubs in Africa (>500), the continent is yet to witness this level of growth for startups operating in this region. So far, only one startup on the continent, Jumia Group, has achieved unicorn status. Many startups going through accelerator programs are closing shop on a frequent basis and continue to struggle to raise additional funding necessary to help them get to their next level of growth. The main aim of this research study was to establish how accelerator programs influence start-ups’ business success among tech startups in Kenya. Specifically, the study sought to; determine the relation between accelerator seed funding on Start-ups’ business success, analyse the relationship between technical guidance offered by accelerators on start-ups’ business success and to establish the relationship between strategic guidance offered by accelerators on start-ups’ business success. The research adopted the resource-based view theory and the diffusion of innovation theory. This research used a cross sectional descriptive survey research design. The study population was 42 employees in the accelerators, six from each of the 7 accelerators located in Kenya. Data was from 36 of the 42 giving a response rate of 85.71%. The study used primary data obtained from the original sources using questionnaires. The questionnaires were administered online via Google forms. Data obtained using questionnaires was converted from simple responsive into a quantitative form to be useful in the analysis that was done using statistical package for social sciences (SPSS). This process generated descriptive statistics which included frequencies and percentages and inferential statistics. A multiple linear regression model was used to show the relationship between the dependent and independent variables. The study findings reveal that seed funding influenced tech startup business success positively. Results also demonstrate that technical guidance influenced tech start-up business success positively. Further, results illustrate that strategic guidance influenced tech start-up business success positively. The regression and correlation results support the results as there existed a positive and significant relationship between seed funding, technical guidance, strategic guidance and tech start-up business success. The study recommends the need for having more accelerator programs offering seed funding, technical and strategic guidance as this will boost tech start-ups business success. The findings of this study will help managers to focus on critical success factors for success within their organizations hence improving the performance of their businesses. The finding that accelerator programs contribute more to success implies that managers will need to focus more on these strategies if they are to improve their business success. The main limitation of the study was that it covered only three aspects of accelerator programs and so there are other areas that require research.