IGL Working Paper No. 23/05

Better Flee From Freedom? The Effects of Structured Accountability on New Venture Performance

Michael Leatherbee, Juanita González-Uribe and Edgar E. Kausel

June 2023

Accountability decreases the performance of people conducting creative, unstructured tasks, but helps routine tasks that lack uncertainty. What about for new ventures? Does it benefit them to develop structures that make them accountable for their plans? We explore these questions in the context of a business accelerator, conducting a randomized controlled trial on 361 ventures. Despite an effective treatment intervention and sample power, we find evidence that structured accountability affects venture performance heterogeneously. Our post-hoc analyses suggest that structured accountability can aid or harm startups as a function of the founders’ level of formal education. Moreover, we find that founders value the existence of accountability structures within accelerators. Furthermore, we find a contradiction between what entrepreneurs need and what they want. Our qualitative analysis shows that, even though structured accountability has detrimental (or at least null) effects on the ventures of founders with high education, these founders appear to want more structured accountability instead of less of it. In contrast, low education founders seem to prefer less structured accountability, although they tend to benefit a great deal from it.