Entrepreneurship is a key driver of economic growth, as it boosts innovation, creates jobs, and improves productivity. Mentorship is crucial to entrepreneurial success, providing valuable guidance and support. To commercialize their ideas, entrepreneurs must navigate multiple potential strategies, and mentors help refine these choices. The Creative Destruction Lab (CDL) is a global mentorship-driven startup accelerator. The mission of the CDL is to advance the commercialization of scientific innovations to benefit humanity. Its core idea is that the obstacle to transforming excellent science and innovation into successful businesses is a failure in the market for high quality judgment.

Mohaddeseh Heydari Nejad, a PhD candidate with the Department of Economics, examined this unique focus on mentorship within the CDL’s program. Her job market paper, A Structural Model of Mentorship in Startup Accelerators: Matching, learning, and value creation (JMP), examines how mentorship improves entrepreneurial outcomes.

“Mentorship provided by experienced entrepreneurs, potential investors, industry experts, and scientists is crucial for entrepreneurial success,” Heydari Nejad explained. “Using data from the Creative Destruction Lab, I developed a novel structural model of mentorship to study the mechanisms through which mentorship generates value: the direct effect of improving startup quality and the screening effect of identifying high-quality startups. In this model, mentorship improves startup quality while also enabling mentors to learn about the underlying quality of startups through interactions, helping them allocate resources more effectively.” [Read more…]