Abstract

Despite the recent scholarly attention to entrepreneurial exit, we still have limited knowledge about what factors drive founders to leave their company soon after IPO as opposed to stay on and manage it. Our study aims to contribute towards answering this question, utilizing the theory of power (Finkelstein, 1992; Haleblian and Finkelstein, 1993). Generally, the IPO represents a time of great change for the venture in terms of both operating control and business direction (Pagano, Panetta and Zingales, 1998). Our main thesis is when founders end up with reduced power at IPO they are more likely to exit their venture with the first opportunity.

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