Startups' demand for accounting expertise: evidence from a randomized field experiment

We conduct a randomized field experiment (RFE) to assess whether startup firms perceive accounting expertise as an important investor credential. We send 13,358 unsolicited and unique emails to active startup firms across the US, showing an interest in them with a proposition to meet a bogus investor. The experiment has high response rates, with 4,535 (33.94%) opened emails and 828 (6.19%) website visits, reflecting investors' proliferating practice of outbound origination to contact new startups. Our RFE compares startup reactions to fictitious investors with certified public accountant (CPA) designations versus two control groups: investors without credentials and those with other professional licenses. Startup firms are 48% likelier to read unsolicited emails from CPA-bearing investors and 47% likelier to visit their websites, relative to investors with a medical license. We document an analogous preference for CPA-bearing investors even when we separately analyze startups in medical-related industries. This gap persists when investors pose as angels, venture capitalists (VCs), or without professional licenses. The relatively low percentage (2.5%) of email bounces and spam reports makes it unlikely that spam algorithms drive the findings. Further tests reveal that the response rates differ by firm age, which is inconsistent with spam filter explanations but congruent with startup firms' demand for accounting expertise. Finally, we undertake a follow-up experiment with 3,443 new startups to distinguish between accounting and general business expertise using a master's in business administration (MBA). Startups are 13.8% likelier to read emails from a CPA-bearing investor than from an MBA-credentialed investor and 22.6% more likely to visit the CPA-bearing investor's website.