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Business accelerators help high-growth start up enterprises develop their products, identify promising customer segments, and secure resources, including vital capital and potential employees. It is clear that they serve an important role in innovation, and I am very interested to learn more about their impact on small firms.

Growth accelerators have long been a powerful tool for helping innovative entrepreneurs grow. Each year since their formation in 2005, accelerators have gained in popularity. In fact, the number of accelerators nearly doubled each year between 2008 and 2014 – proving that this model has real potential to assist entrepreneurs.

Accelerators are unique in that they provide the best of both worlds for both startups and investors. They serve as an all-inclusive creative hub that provides technical assistance for growing businesses and a central location for investors to find vetted businesses.  This arrangement reduces investor risk, while maximizing the capital network for high-growth companies.

In 2015, more than $90 million was invested in the U.S. and Canada by 111 accelerators into nearly 3,000 start-ups. Silicon Valley firms accounted for more than one-third of that investment, while New York totaled about $9 million in close to 400 startups.

By opening the funding network for companies that might not otherwise have gained such exposure, accelerators contribute to stabilizing innovative businesses and the growth of the economy. 

Beyond promoting business expansion, growth accelerators also bring benefits to the communities in which they are located in the form of economic development and job opportunities.  We must consider ways to see a greater presence of accelerators in underserved and rural areas outside of the popular innovation hubs. 

Another area of improvement is reaching entrepreneurs who have traditionally been disadvantaged. Evidence shows women and minorities are not participating at the same rate as their white, male counterparts. 

One promising trend has been the emergence of accelerators focusing on these entrepreneurs. While, this is a step in the right direction, more must be done because these businesses contribute greatly to our economy.

And, after all, that is what today’s hearing is all about – growing our economy and creating jobs. We already know the job creation power small firms hold. Now the question becomes how to maximize that power for startups. 

During today’s hearing, we will hear from some of the most successful, innovative accelerators from around the nation. I look forward to hearing their suggestions how we can replicate that success in communities across the nation.