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Small Business Economics

, Volume 38, Issue 4, pp 351–374 | Cite as

Impact of founder experience on exit intentions

  • Dawn R. DeTienne
  • Melissa S. Cardon
Article

Abstract

Entrepreneurial exit—the process by which the founders of privately held firms leave the firm they helped to create (DeTienne, J Bus Venturing, 2010)—is an important component of the entrepreneurial process, yet researchers know very little about it. We examine entrepreneurs’ intentions to exit by a range of possible exit paths [acquisition, initial public offering (IPO), family succession, employee buyout, independent sale, liquidation], building on Gimeno et al.’s (Adm Sci Q 42:750–783, 1997) notion of thresholds as they apply to a simple survival/exit dichotomy, and expanding this to include different intended paths of exit. Our results indicate that entrepreneurs intend to pursue different exit paths based on previous entrepreneurial experience, industry experience, age, and education level. Our findings provide preliminary evidence that differences between intended exit and failure are underspecified in the literature, since exit consists of many unique paths. Also, in support of threshold theory, we find that the intended exit path is driven by factors other than firm performance.

Keywords

Entrepreneurial exit Exit path Experience Threshold 

JEL Classifications

M13 L26 

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Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  1. 1.Colorado State UniversityFort CollinsUSA
  2. 2.Pace UniversityPleasantvilleUSA

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