Ross Baird and Saurabh Lall

Understanding What Makes Impact Accelerators … Accelerate : New ANDE/Village Capital report

Last year, a widely-publicized report from Monitor-Deloitte and Acumen highlighted the “Pioneer Gap” in impact investing — explaining how, despite the tremendous attention and capital dedicated to impact investing (as the GIIN estimates, $17 billion in 2012 and 2013), “pioneering” early-stage firms face a serious dearth of critical resources, support, and financing. In the past five years, organizations looking to bridge the “Pioneer Gap”— commonly known as “accelerators” or “incubators”— have grown 300 percent.

Over the past year, Village Capital and the Aspen Network of Development Entrepreneurs (ANDE) have been working together to learn what’s working. We have surveyed more than 50 self-identified “impact accelerators” — ventures looking to provide education, training, capital, and assistance to early-stage impact enterprises, and this week, we’re releasing what we’re learning. This report is the first phase of our broader research strategy on accelerators, and we believe our findings will be helpful to entrepreneurs, foundations, impact investors, as well as the accelerators themselves.

Here are some key trends pervading the landscape of impact-oriented accelerators:

  • Philanthropic support is critical: Nearly 75 percent of all accelerators in our sample rely on some level of philanthropic support, and over 50 percent of all dollars spent by accelerators is from philanthropic sources. Yet about one-third are structured as for-profits, suggesting that they expect to develop sustainable revenue streams in the future.
  • Service and benefit provision is consistent across the sector — and half of all accelerators provide direct funding: The majority of accelerators provide the same set of core services – mentorship, access to investors, networks of partners, and business skills development. About 50 percent also provide direct funding to the enterprises.
  • Partnerships that bridge to the local commercial sector matter: Nearly all accelerators have formal partnerships with a wide range of organizations: impact investors, commercial investors, foundations, governments, and universities. Yet, the only type of partnership that possessed a consistent relationship with enterprise success and survival rate were “in-country commercial investors” (i.e. non-impact angel networks, sector-aligned corporates, and banks.)
  • Accelerator/impact investor relations: it’s complicated: 20 percent of impact investors help fund accelerator operations and are looking to align their strategic pipeline with accelerator work. The primary reason for investor non-involvement is “mandate fit”— that is, investors do not view it as their role in the ecosystem to support accelerators. In the long run, as cash-strapped accelerator programs try to fund their operations, they may see a “free-rider problem” that causes misalignment between accelerators and investors.
  • Selectivity matters: The percent acceptance rate in a cohort was one of the variables most directly related to success and survival rate of accelerator graduates: more selective accelerators are producing more quality companies. One conclusion could be that an investment in resources recruiting a broad range of top entrepreneurs to accelerators pays off disproportionately.
  • Most impact investors are looking to accelerators to source enterprises, but are not finding them. Sixty percent of impact investors who do not directly support accelerators say that they have informal sourcing relationships with accelerators, yet 47 percent say they have not sourced any companies from accelerators. Investors cite “lack of fit with our investment criteria” as a primary reason, suggesting that accelerators could do a better job proactively engaging with investors to develop cohorts that are more ready for follow-on investment.
  • Metrics and Evaluation are under-utilized: While the majority of accelerators collect financial data, almost one-third do not collect any social performance data. Additionally, 23 percent of the accelerators in our sample did not collect data on the status of their graduate enterprises, making it difficult to assess their performance.

We will be discussing the report on June 13 in Washington, D.C. at the ANDE Metrics Conference, and look to lead further discussions this summer and fall. The report is available online here. For more information on the study, please email Lily Bowles at, or Saurabh Lall at

Ross Baird is the executive director of Village Capital and Saurabh Lall is the research director at ANDE.

business development, impact investing, incubators