Do Business Accelerators invest in 'lemons‘? A comparison of the founders‘ characteristics of Business Accelerator and Business Angels backed companies

Business Accelerators have become an important element of the entrepreneurial ecosystem. However, little is currently know about the characteristics of the companies that receive equity funding from Business Accelerators and how do they compare with those that receive funding from traditional equity investors such as Business Angels. Our paper aims to establish whether Business Accelerator and Business Angels are looking to fund the same type of companies, or some invest in 'lemons‘ and others in 'gems‘. Using data from the Impact of Entrepreneurship Database Program that includes application data collected from 4125 entrepreneurs, we find that there are statistically significant differences between those two groups and the average venture that receives Business Angel funding is significantly different to the average venture that receives equity funding from Business Accelerators. Our paper discusses the potential implications of this finding for the entrepreneurial ecosystem.