Abstract

Although exit is a central part of the entrepreneurial process, most of the entrepreneurship literature has focused on the entry and growth phases of a business. Our research examines the extent to which the entrepreneur’s personal motivations and venture development processes impact exit strategies. Specifically we examine the link between extrinsic and intrinsic motivation and causation and effectuation processes and an entrepreneur’s intended exit strategy. Our results indicate that extrinsically-motivated entrepreneurs are more likely to consider an IPO strategy and less likely to consider an independent sale. Intrinsically-motivated entrepreneurs are less likely to consider an IPO or liquidation and more likely to intend to exit through an independent sale. Entrepreneurs employing causation processes are more likely to consider an IPO strategy and less likely to intend to exit via liquidation. The sub-dimensions of effectuation are differentially related to exit strategies. Experimentation is positively related to an IPO strategy while affordable loss is positively, and flexibility negatively, related to liquidation.

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