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Welcome to the Collective. This week, we’re exploring the sprawling network of accelerators, startup schools, and university entrepreneurship programs that make up the backbone of what many call the “innovation economy.” These programs have multiplied over the past two decades, offering aspiring founders resources, mentorship, and—often—a much-needed infusion of capital to kickstart their ideas. But the real question is, do they work?

Our podcast guest this week, Kiran Panjwani, shared insights from her time within the innovation economy as a Manager of Venture Programs at MaRS Discovery District in Toronto and now as CEO of FounderWay. Utilizing her perspective as reference, we used this essay to ask whether these programs deliver genuine educational value, or if their success is mainly driven by the connections and funding that prestigious programs like Y Combinator provide. 

Are these accelerators producing resilient, well-prepared founders ready to lead sustainable ventures? Or is the allure of funding overshadowing real skill-building and innovation?

It’s time to unpack the foundation of modern entrepreneurship and see if the innovation economy is truly living up to its name. Let’s get to it.

— Antonio DiMeglio & Leon Li

The landscape of entrepreneurship is no longer just a bootstrapped journey taken in garages and basements. Today, programs designed to support and accelerate startup growth are a well-established part of the industry. Yet, as the number of accelerators and incubators increases, so does the debate around their actual impact. Critics argue that the path to startup success may hinge less on an accelerator’s resources and more on the funding that comes with its brand name, creating a cycle of funding dependency rather than lasting resilience.

In this essay, we’ll explore:

• The evolution of accelerators and incubators as a staple in the startup journey.

• Whether access to funding outweighs the educational value these programs claim to provide.

• How these programs shape the startup landscape and redefine what “success” means.

Is this innovation economy building real innovators? Or just good networkers?

What is the Innovation Economy?

In the last decade, a sprawling network of startup accelerators, university-led incubators, and specialized startup schools has risen, forming an “innovation economy” that is reshaping the American entrepreneurial landscape.

Programs like Y Combinator, Techstars, and countless university-affiliated entrepreneurship hubs have transformed from fringe experiments into pillars of the modern startup journey. 

These programs promise to fast-track the entrepreneurial dream by offering mentorship, funding, and connections to industry veterans. But as this support network continues to grow, so does a fundamental question: Is the innovation economy truly delivering on its promise?

To answer this, we need to dive deeper. Are these programs genuinely equipping founders with essential skills, knowledge, and resilience? Or is their value rooted in the connections and funding access they provide? 

For many, programs like Y Combinator appear to serve as both a proving ground and a launchpad. But for others, this wave of incubators and accelerators might feel more like an exclusive club: a place where access to capital and connections may outweigh skill-building. 

To find out what value these programs actually bring, let’s examine their educational approach, funding focus, network dynamics, and the influence they wield over what it means to “succeed” as a startup founder.

Accelerators and the Allure of Funding

The story of the innovation economy is often told through the rags-to-riches successes of its most famous alumni. When Y Combinator launched its first batch in Silicon Valley back in 2005, it was a novel experiment.