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How Much Do Startup Accelerators Help Cities?

Accelerators are growing rapidly across the U.S. But does that mean governments should get involved?
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Ivan Alvarado / REUTERS

Cities have long sought to bolster their innovative and entrepreneurial capacities. In an effort to spur startup activity, many U.S. urban areas have developed tech centers and innovation districts, lured venture capital funds, and launched incubator programs and facilities.

The latest trend in the tech startup economy is the creation of so-called “accelerators,” which act like a Shark Tank school for startups, providing access to mentors and peers along with space and venture funding. Perhaps the best-known accelerator is Y Combinator—established by Paul Graham in 2005 and based in the Silicon Valley—which has launched some 940 companies including Airbnb, Dropbox, and Reddit. Yet another popular example is Techstars—founded in 2006 in Boulder, Colorado—which now sponsors 21 accelerators across the world.