Mentored without incubation: Start-up survival, funding, and the role of entrepreneurial support organization services

Abstract

This paper asks how start-ups' participation in a mentoring program relates to finance and survival outcomes and how these outcomes differ for mentored firms compared to non-mentored and incubated firms in the same region. Drawing on the entrepreneurial support organization, mentoring, and innovation literatures, I posit that mentored firms will perform better than non-mentored firms, and that the specific micro-mechanisms of mentoring will lead to varied finance and survival outcomes for mentored as compared to incubated start-ups. Exploiting detailed data on the universe of entrepreneurial life sciences firms in the Research Triangle region of North Carolina over a 25-year time period and matching methods, results indicate that mentored firms perform better in terms of finance than non-mentored firms. Exploratory empirical extensions reveal mentored firms receive greater private and federal public funding than incubated firms, but not local public funding. Neither mentoring nor incubation services relate to survival outcomes. The paper concludes with practical implications for entrepreneurial support organization managers and economic development.