How Do Mentors Influence Startups’ Termination Decisions? An RCT Experiment

How do mentors influence startups’ termination decisions involved in entrepreneurial programs? We address our research question investigating the role of mentors supporting entrepreneurs’ decisions in an early-stage training program, receiving the scientific approach or the effectuation approach. Exploring these considerations is important for gaining a better understanding of the ways in which mentors influence entrepreneurial training programs’ outcomes and how their support can shape entrepreneurs’ decision-making in continuous innovation process. We based our research on Kram’s mentor role theory and we applied it to the scientific approach, according to the theory-and-evidence-based approach, and to theory of effectuation related to the evidence-based approach. We collected evidence via a randomized control trial (RCT) in which 308 Italian early-stage startups, having from 0 to 7 mentors from the beginning of the program, were randomly assigned to “treatment” (scientific, effectuation) and “control” group. Our econometric results show that the impact of teaching decision-making approaches can be shaped by the presence of external mentors. In particular, entrepreneurs with a specific decision-making approach and are supported by external mentors terminate their business idea less than other entrepreneurs. We contribute to academic discussion offering useful insights for stakeholders involved in designing training programs for novice entrepreneurs.