Showing papers on "Exit strategy published in 2022"

Venture capital exit pressure and venture exit: A board perspective

Abstract: Research Summary Venture capital funds have a limited lifecycle. As the fund ages, venture capitalists (VCs) are motivated to promote venture exit discussions with the venture board. We investigate the impact of VCs' exit pressure on the hazard of four types of venture exit (IPO, high-value M&A, low-value M&A, and liquidation), considering how VCs' exit pressure influences board collaboration. We find that while the VCs' exit pressure does not affect the hazard of IPOs, the pressure significantly increases the hazard of M&A and liquidation. Achieving important milestones does not reduce the impact of exit pressure on the hazard of low-value M&A and liquidation. Independent directors moderate the impact of the VC's exit pressure, increasing the hazard of high-value M&A and lessening the hazard of liquidation. Managerial Summary We investigate whether VCs' exit pressure due to an approaching deadline for fund liquidation influences the time to venture exit and how board composition affects the relationship between VCs' exit pressure and venture exit. Data from a sample of 219 VC-backed U.S. surgical device ventures founded during 1989–2014 suggest that VCs' exit pressure decreases the time to M&A (both high-value and low-value M&A) and liquidation. Boards with more independent directors facilitate high-value M&A and delay liquidation. VCs' exit pressure does not affect the time to IPO. These results provide evidence of the impact of the venture capital fund's finite life on investees other than the VCs and confirm the crucial role of independent directors in managing VCs' exit pressure.

Entrepreneurs' exit strategies and their determinants: the role of perceived exit challenges

Abstract: PurposeThe study aims to investigate whether the perceived problems in exiting a business—as well as the scope of and access to external support—may impact an entrepreneur's decision regarding the exit strategy, that is, the choice between the stewardship and harvest exit strategy.Design/methodology/approachThe authors have collected data from 302 entrepreneurs using a novel survey instrument and subjected the sample to structural equation modeling (SEM) and ordered logit regressions.FindingsThe results reveal that potential difficulties in implementing an exit strategy, the scope of external support anticipated by the exiting entrepreneur and access to such support influence the potential choice of an exit strategy. Furthermore, the findings indicate that the stewardship exit strategy is preferred over the harvest exit strategy by entrepreneurs who face potential difficulties in obtaining external support or foresee problems related to a potential exit strategy.Originality/valueThis study provides new insights into an entrepreneur's exit phenomenon by adding new elements, such as perceived problems involved in exiting a business as well as the scope of and access to external support, to the list of factors that may affect the choice of an exit strategy.

Invest until the End? Examining Camp Counselor Experiences of Inevitable Exit, Identification, and Support

Abstract: This research examined how camp counselors anticipate and experience inevitable exit from roles centrally characterized as requiring intensive emotional work. This study extended previous inquiry on planned exit from organizations, examining the way known exit shapes socialization, identification, and social support in helping professions. The researchers analyzed counselor membership and exit experiences through three primary themes regarding inevitable exit, identification, and support. This study theoretically contributes to current scholarship on organizational exit and offers practical insight regarding member care in the workplace, specifically demonstrating that members often hyper-invest or completely withdraw as they anticipate inevitable exit from emotionally-intensive roles.