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What do accelerators do? Broadly speaking, they help ventures define and build their initial products, identify promising customer segments, and secure resources, including capital and employees. More specifically, accelerator programs are programs of limited-duration-lasting about three months-that help cohorts of startups with the new venture process. They usually provide a small amount of seed capital, plus working space. They also offer a plethora of networking opportunities, with both peer ventures and mentors, who might be successful entrepreneurs, program graduates, venture capitalists, angel investors, or even corporate executives. Finally, most programs end with a grand event, a "demo day" where ventures pitch to a large audience of qualified investors.You may think this all sounds familiar. After all, don't incubators and angel investors help nascent ventures? Accelerators certainly are similar to incubators and angel investors. Like them, accelerators aim to help nascent ventures during the formation stage. Thus we might expect that many of the activities provided by accelerators would also be provided by angels and incubators. But accelerators differ in several ways. Perhaps the most fundamental difference is the limited duration of accelerator programs as compared to the continuous nature of incubators and angel investments. This one small difference leads to many other differences, as I discuss in more detail below. (See table 1 for a summary of the differences between incubators, angel investors, and accelerators.) INCUBATORS AND ANGEL INVESTORSAccording to the National Business Incubation Association, incubators shelter vulnerable nascent businesses, allowing them to become stronger before becoming independent. According to the association's website, 1 93 percent of all incubators

Using a nested multiple-case study of participating ventures, directors, and mentors of eight of the original U.S. accelerators, we explore how accelerators' program designs influence new ventures' ability to access, interpret, and process the external information needed to survive and grow. Through our inductive process, we illuminate the bounded-rationality challenges that may plague all ventures and entrepreneurs-not just those in accelerators-and identify the particular organizational designs that accelerators use to help address these challenges, which left unabated can result in suboptimal performance or even venture failure. Our analysis revealed three key design choices made by accelerators-(1) whether to space out or concentrate consultations with mentors and customers, (2) whether to foster privacy or transparency between peer ventures participating in the same program, and (3) whether to tailor or standardize the program for each venture-and suggests a particular set of choices is associated with improved venture development. Collectively, our findings provide evidence that bounded rationality challenges new ventures differently than it does established firms. We find that entrepreneurs appear to systematically satisfice prematurely across many decisions and thus broadly benefit from increasing the amount of external information searched, often by reigniting search for problems that they already view as solved. Our study also contributes to research on organizational sponsors by revealing practices that help or hinder new venture development and to emerging research on the lean start-up methodology by suggesting that startups benefit from engaging in deep consultative learning prior to experimentation.

Accelerators are entrepreneurial programs that attempt to help ventures learn, often utilizing extensive consultation with mentors, program directors, customers, guest speakers, alumni, and peers. Although accelerators have rapidly emerged as prominent players in the entrepreneurial ecosystem, entrepreneurs, policy makers, and academics continue to raise questions about their efficacy. Moreover, relevant organizational literature suggests that, even if accelerators are associated with better venture outcomes, results could be due to mechanisms other than learning, such as sorting or signaling. Drawing on mixed empirical methods that include proprietary data on the ventures accepted and “almost accepted” to a set of top accelerators, we find evidence that some, but not all, of the early accelerators we study substantially aid and accelerate venture development. We also find some evidence of sorting dynamics. These findings are corroborated using an auxiliary quantitative data set constructed from publicly observable data. Complementary qualitative fieldwork suggests a key driver of these accelerator effects is a novel learning mechanism we label broad, intensive, and paced consultation. The implication of these insights is that the practices of early accelerators represent a beneficial and likely replicable form of intervention that may also have relevance for independent entrepreneurs, educational programs, and corporate innovation.

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This study uses theory building and theory elaboration methods to suggest how firms accelerate learning. Although prior research establishes that firms learn at different rates, less is known about how some firms, especially those in knowledge-based industries, accelerate learning. The research setting is nine accelerators-entrepreneurship education programs that accelerate learning during venture gestation. Since 2005, these modern incubators have offered cohorts of nascent firms seed financing, education, and mentorship during intensive three-month programs that culminate in high-stakes pitch presentations. Today, there are approximately 300 accelerators across five continents that have collectively helped 2500 firms raise $1.8 billion in funding. Thus, accelerators are an important phenomena and an ideal setting to observe accelerated learning. There are several findings. First, learning is accelerated by mentor overload-time-compressed interactions with external advisors that delay implementation. Mentors expand strategic options. Second, learning is accelerated by director experts who rapidly accumulate and transfer expertise to nascent ventures. Directors narrow strategic options. Third, learning is accelerated by divided teams-founding team members who split up rather than band together during experience accumulation. Finally, learning is accelerated by cohort peers-peer ventures who are concurrently rivals and helpers. More broadly, this study contributes to organizational theory by bringing to light the central but heretofore hidden role of learning-coordination costs. This study also contributes iv to strategy by challenging the widely held assumption of time-compression diseconomies and to entrepreneurship by shifting the emphasis from changing strategic direction, often referred to as "pivoting," to making strategic commitments. Finally this study contributes to entrepreneurship by pioneering academic research on the purpose and effectiveness of accelerators, explaining what they do and comparing them to incubators and angel investors.