Gimme Shelter – A Discrete Choice Experiment to Explain Nascent Entrepreneurs' Choice for an Incubator

This paper studies the attributes that affect the choice for a particular incubator for different latent classes of entrepreneurs. To do so, we conduct a discrete choice experiment. A sample of 1,000 nascent entrepreneurs from... [ view full abstract ]

This paper studies the attributes that affect the choice for a particular incubator for different latent classes of entrepreneurs. To do so, we conduct a discrete choice experiment. A sample of 1,000 nascent entrepreneurs from the USA and Europe are asked to choose between two hypothetical incubators. These incubators vary among eight attributes: affiliated organization, availability of physical infrastructure, funding, training and coaching, internal and external networks, track record and industry focus. An experimental design assures that all attributes vary systematically according to an orthogonal experimental design, which allows for determining the relative influence of each attribute. By clustering respondents that give similar answers, we are able to identify latent classes of nascent entrepreneurs with similar preferences. To characterize these latent classes, we measure a number of entrepreneur and firm characteristics. The data is still being analyzed. We hypothesize that nascent entrepreneurs base their decision for an incubator primarily on the funding that is provided. This contrasts extant literature emphasizing that the value of incubation lies primarily in the provision of intangible resources. We also expect our results to show that incubators should tailor their support to the preferences of the particular type of entrepreneur that they aim to attract.