The legal structure of ventures and exit routes: A study of single-founder start-ups in the United States

Lee, Byungku; Cho, Yeri

doi:10.1177/1465750320903963

Cited by 4 publications

(4 citation statements)

References 72 publications

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“…During the crafting of the legal agreement, an exit advisory team must go through all the parts of the agreement in detail. With the support of this team, the exit strategy agreement may be drafted several times before a final one that meets all criteria is done [11].…”

Section: How the Exit Plan Influences The Business • Legal Structurementioning

confidence: 99%

Discerning the Strategies for Exiting Your Business

Shepard¹

2021

Risk Management

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For many business owners, strategies for operations are well thought out, whereas strategies for exit are not. Exiting a business does not need to occur due to a challenge or disaster. It is possible to plan and exit for the purposes of business growth, retirement, mergers and more. An exit affects the business owner, as it means that they are no longer involved in running or operations of the organization. The aim of this chapter is to identify common exit strategies and understand how they are of benefit to both the business owner or manager and the individual taking over the business. Secondary qualitative research is the research method used, with analysis of strategies and structures used across countries. These findings include differentiation between exit strategies with an understanding of their impact or influence on the business. These include the process of creating and exit strategy and the benefits for having one in place. The expectations of the investor and how they are to be paid back are taken into consideration. The chapter concludes with a solution for any business owner, including how to work with a qualified team to create a logical, well thought out exit plan.

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Section: How the Exit Plan Influences The Business • Legal Structurementioning

confidence: 99%

Discerning the Strategies for Exiting Your Business

Shepard¹

2021

Risk Management

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“…Entrepreneurial exit not only impacts the entrepreneur (Eklund, Levratto and Ramello, 2020) but also the industry, market, and economy (DeTienne, McKelvie and Chandler, 2015;DeTienne, 2010), and the actual total costs of entrepreneurial exits are usually misjudged because nascent entrepreneurs' disengagement is not usually accounted for as most of the researchers have focused on the exit of established firms, which is different to nascent entrepreneurs' exit (Wicker and Davidsson, 2015). Furthermore, entrepreneurial exit has traditionally been studied from a societal-level perspective that had regarded exit as a failure and just considered an organisational mortality rate (Lee and Cho, 2020). However, many exits could be due to individuals deciding to stop pursuing unviable ideas based on the associated opportunity costs and hence should be categorised as successes being an intelligent exit decision (Camuffo et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Founder's Human Capital and the Entrepreneurial Process Duration

Shahid¹

2023

Preprint

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This thesis presents three quantitative empirical studies, utilising two US cohorts from the harmonised Panel Study of Entrepreneurial Dynamics (PSED), to advance our understanding of the relationship between nascent entrepreneurs’ human capital and duration to different entrepreneurial outcomes. Each chapter provides a distinct perspective across three dimensions: (1) human capital, age and sector impact duration to a profitable outcome, (2) the association of human capital and age with the founder’s exit; and finally, (3) human capital impact on the duration to a profitable outcome with a different spatial scope of sales. Following the introductory chapter, in chapter 2, the human capital perspective is used to investigate how the level of human capital and the founder’s age influence the likelihood of profitable venture creation in a shorter duration. This chapter extends research in nascent entrepreneurship that hitherto has largely overlooked the duration perspective to an entrepreneurial process outcome. This chapter stresses that hi-tech start-up particularly benefits from the nascent entrepreneur’s higher educational attainment in terms of shorter duration until the profitable outcome, and find that age has a non-linear relationship with the speed of the profitable venture outcome. Chapter 3 examines how a founder’s human capital factors and age influence the likelihood of a founder’s exit, and duration to an exit, from the entrepreneurial process. This chapter also extends its focus to human capital interactions to establish which combinations are more likely to reduce an earlier prospect of a founder’s disengagement from the entrepreneurial process. The chapter, also adds to the literature on how founders, with higher human capital, learn quickly and make intelligent choices to disengage without incurring heavy personal and societal costs. A non-linear relationship is found between the founder’s age and the duration to disengagement. Finally, chapter 4, seeks to understand how a founder’s human capital affects the profitable outcome, and the duration to such an outcome, at the different spatial scopes of sales. This paper takes a new approach and adds to the international entrepreneurship literature by clarifying how the founder’s human capital factors impact rapid (born global) and incremental (international new ventures) spatial scope strategies differently. Among the general human capital, a university degree is valuable across all types of spatial scopes of sales in terms of profitable venture creation in a shorter duration. However, start-up experience (specific human capital) only tends to be vital for international scope in terms of the shorter duration to create a profitable new venture. Altogether, the thesis advances our understanding of the important role of the founder’s human capital dimensions in nascent entrepreneurship, in the duration either to a profitable venture creation or to exit, which is underdeveloped in the existing literature. The thesis paves the way for future, both theoretical and empirical research, into nascent entrepreneurship process duration by analysing the direct effects of various aspects of social capital.

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Section: Introductionmentioning

confidence: 99%

“…More recently, researchers have paid increasing attention to the origins of entrepreneurial exit (e.g. Lee and Cho, 2020; Lindblom et al , 2020). An important explanatory approach has highlighted entrepreneurs' resource deficits as a critical antecedent, such that entrepreneurial exit may occur more frequently if an entrepreneur lacks the capacity to effectively inhibit, override or refrain acting upon behavioral impulses (Hessels et al , 2018).…”

Section: Introductionmentioning

confidence: 99%

Feel dragged out: a recovery perspective in the relationship between emotional exhaustion and entrepreneurial exit

Shahid

Kundi

2021

JSBED

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PurposeThis study investigates the relationship between emotional exhaustion and entrepreneurial exit, particularly how this relationship might be invigorated by two critical psychological factors, namely cognitive well-being (CWB) and affective well-being (AWB).Design/methodology/approachBinary logistic regression analysis was employed on a longitudinal data set of 997 self-employed individuals taken from the German Socio-Economic Panel (GSOEP) during years 2012-2013.FindingsGreater level of emotional exhaustion increases the likelihood of entrepreneurial exit. However, individuals with higher levels of affective or/and cognitive well-being are less likely to engage in the actual entrepreneurial exit behaviors.Practical implicationsEntrepreneurial exit is one of the crucial managerial decisions made by entrepreneurs. The decision to quit is not only triggered by poor firm performance but also by various psychological factors. The authors found subjective well-being as an essential mechanism promoting entrepreneurs’ overall well-being, thus recommending that entrepreneurs psychologically distance themselves from work during off times.Originality/valueFirst, the study discovered emotional exhaustion as a crucial psychological precursor of entrepreneurial exit by focusing on actual exit instances rather than intentions and strategies to exit. That contributes to understanding the psychological mechanism involved in resource gain and loss while making exit decisions. Second, affective and cognitive well-being are found to be two crucial enablers that work as a recovery process to deal with emotional exhaustion.

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The legal structure of ventures and exit routes: A study of single-founder start-ups in the United States

Cited by 4 publications

References 72 publications

Discerning the Strategies for Exiting Your Business

Discerning the Strategies for Exiting Your Business

Founder's Human Capital and the Entrepreneurial Process Duration

Feel dragged out: a recovery perspective in the relationship between emotional exhaustion and entrepreneurial exit

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