Why Avoid Participating in an Accelerator? Countersignalling by High-Quality FinTech Ventures

This study investigates whether accelerators attract the highest-performing FinTech ventures. Drawing on countersignalling theory, we present a model of accelerator participation that predicts high-quality FinTech ventures will avoid accelerator programmes. Using a unique financial reporting dataset of FinTech accelerator participants and a propensity score-matched sample of comparison firms, we find support for the prediction from our countersignalling model. FinTech accelerator participants have worse performance, both before and after completing a programme, when compared to peer non-accelerator ventures. Overall, our results indicate that FinTech ventures are less suited for accelerators due to the current breadth of outside funding options available, which provides little incentive for participation from high-quality ventures. This research has important implications for entrepreneurs, accelerators and investors.