Should I stay or should I go now: Relocation patterns of startups participating in European seed accelerator programs

Abstract

In this paper, the phenomenon of startups relocating in order to participate in seed accelerator programs is examined. Accelerators offer collaborative workspaces, training opportunities, and seed investments to young firms on a temporary basis. This enables temporary relocation of startups in order to participate in accelerator programs away from their home regions, which has been commonly described (Kuebart & Ibert 2019). However, there is a lack of knowledge on the actual spatial relations that emerge through temporary relocations of startups. Using a unique dataset, the spatial patterns of temporary relocations of young firms are analyzed in this contribution. On the one hand, the relational patterns of temporary startup relocations are mapped and analyzed from the perspective of urban hierarchies. On the other hand, the existing literature with the notion of young firms being tied to their home regions is critically evaluated and challenged. Stam’s (2007) butterfly model would suggest that startups are firmly embedded in their home region and thus, if they relocate for accelerator programs, they quickly return to their original location after the program. However, the authors’ empirical findings reveal a more nuanced picture, with a significant proportion of startups opting to relocate permanently to their new location even after the accelerator program has ended. Methodologically, sequence analysis (Kuebart, 2022) is used to analyze the movement patterns of a sample of about 5000 startups that participated in accelerator programs located in one of 71 European cities. The results imply an updated perspective on the movements of young firms, in that entrepreneurial ecosystems are much more intertwined by startup relocations than previously thought. Instead, seed accelerator anchor trans-local relations between cities and regions.