experience with entrepreneurs who know about failure and are willing to share the lessons with startup founders and, second, the intensity of the cohort-based experience that provides founders with the opportunity to compare with a group of peers going through a similar experience. Indeed, they have compared the performance of accelerators with that of groups of business angels and find that “startups going through a top accelerator experience significantly quicker exit outcomes through acquisition and through quitting relative to those in angel groups.” (p.3) To avoid this section giving the impression that accelerators’ perceived value is in fact widelydiffused effective (realized) value across all accelerators, it is worth reproducing the following conclusion from Hathaway's (2016a, 2016b): “…accelerators can have a positive effect on the performance of the startups they work with, even compared with other key early-stage investors, such as leading angel investment groups. However, this finding is not universal. So far, positive effects have been only attributed to leading accelerators. Outside of those, the impact of participation in an accelerator may be ambiguous—or perhaps even negative.” 3.3.1.2 Investors’ perceived value of accelerators The perceived value of accelerators for investors has multiple aspects. Fehder & Hochberg (2014) identify a dual function: “deal sorter” and “deal aggregator.” As “deal sorters,” accelerators attract and screen a large population of applicant startups, sorting out high-potential candidates for investment; as “deal aggregators,” accelerators locate these high-potential candidates in a single place, thus helping reduce investors’ costs of searching for opportunities, particularly in smaller regions. More broadly, the value for investors is not just in the pool of investable companies accelerators create through their screening, sorting out, and aggregation, it is also in the concentrated stream of mentors and strategic resources accelerators provide to these startups to favor their development. (Miller & Bound, 2011) Cohen (2013) identifies another accelerator’s function related to risk reduction for investors, thus, “[t]he accelerator format helps investors select firms by combining the funds of many investors, enabling accelerators funds to spread risk across more portfolio firms. Thus, the accelerator serves as
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