Why a Strong Innovation Portfolio Does Not Prove Institutional Value Creation
What decision-makers need to know about which mechanism changes which venture state, for whom, compared with what; and why strong selection can coexist with weak value creation.?
A portfolio of successful startups can make an accelerator, investment programme or innovation institution look highly effective. The companies raise follow-on funding, enter prestigious partnerships, increase their valuations or expand internationally.
But strong portfolio performance does not automatically prove that the institution created that success.
It may simply show that the programme was good at identifying companies that were already likely to perform well.
This distinction matters for investors, public funding bodies, accelerators and corporate innovation programmes. Without it, institutions risk attributing market success to their own intervention—even when the decisive capabilities, advantages or momentum existed before the relationship began.
Selection and value creation are not the same
Selection can be valuable. Identifying promising technologies, credible teams or strategically important ventures is a real institutional capability. It can reduce uncertainty, concentrate attention and help investors or corporate partners discover opportunities earlier.
However, selecting a strong company is different from changing what that company can achieve.
An innovation programme creates value when its intervention materially improves a venture’s ability to commercialise, industrialise, attract suitable capital, enter customer operations or retain strategically important capabilities. This is the same transition challenge behind the wider institutional handover problem in European innovation.
A strong portfolio therefore answers one question: Which companies did the institution identify and support?
It does not automatically answer another: What changed because the institution became involved?
Why portfolio performance can be misleading
Selective programmes rarely work with a random group of companies. They typically choose ventures with strong teams, promising technology, early traction, investor readiness or strategic relevance.
Those characteristics already influence future performance.
If supported ventures later outperform an average startup population, the comparison may say more about the quality of the selection process than about the effectiveness of the support provided.
This can create a flattering but incomplete picture. A programme may appear successful because it attracted companies that already had significant advantages. Another programme may work with more difficult commercialisation challenges and produce substantial improvements, while its portfolio still shows weaker headline results.
Raw portfolio outcomes can therefore reward the starting position rather than the contribution of the institution.
What should innovation institutions assess instead?
Decision-makers should look beyond whether a company performed well and ask what changed during the intervention.
Did the programme help the venture overcome a specific commercialisation barrier? Did it improve access to industrial partners, regulatory expertise, production capacity or suitable financing? Did the company become more capable of entering customer operations? Was a critical handover completed that would otherwise have stalled?
These questions move evaluation away from general claims of “support” and towards observable changes in the venture’s development. As with technology assessment, the useful question is not only what looks promising, but which risk was actually reduced.
The aim is not to prove that one institution caused every positive outcome. Technology ventures develop through interactions between founders, investors, customers, research organisations, regulators and market conditions. A credible assessment should identify which contribution can reasonably be attributed to the institution—and which cannot.
Why the distinction matters commercially
For investors, the question affects how portfolio value and future risk are interpreted. A company may have performed well while remaining dependent on capabilities, relationships or market conditions that the programme did not influence.
For corporate innovation teams, it determines whether pilots and partnerships created an operational route to adoption or merely provided access to promising companies. Access is not the same as adoption, and selection is not the same as transformation.
For public institutions, it affects whether programmes are producing industrial capability and commercial deployment—or mainly identifying assets that later create value elsewhere.
This becomes particularly important during the scaleup transition. A portfolio can appreciate financially while production knowledge, ownership, strategic control or future value creation moves outside the institution’s intended ecosystem.
Better claims create better decisions
Recognising the difference between selection and value creation does not diminish the role of innovation institutions. It makes that role more precise.
An institution may be excellent at screening, signalling or assembling portfolios. It may also be effective at changing venture trajectories. These are both legitimate sources of value, but they should not be treated as the same activity.
Clearer claims allow boards and programme owners to decide what they should continue delivering, where they need stronger partners and which activities do not create the expected change.
A strong portfolio proves that strong companies were present. Demonstrating institutional value creation requires a different question: What became possible because the institution acted?
The full analysis examines the missing counterfactual, accelerator evidence and the institutional implications in greater depth:
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