Can entrepreneurs who experienced business closure bring their new start-up to a successful M&A?

Artikel

Numerous technology start-ups end up shutting down their operations. The present study aims to answer the following research questions: can entrepreneurs who closed their previous ventures bring their new venture to a successful exit through M&A and to what extent does this positive outcome correspond to whether investors funded their start-up? We examine 9723 technology start-ups established by 19,458 entrepreneurs. About half of the start-ups were funded, and 3463 of them had entrepreneurs with closure or with M&A experience. We find that entrepreneurs with closure experience are negatively associated with the probability of M&A as a main effect, in line with the theory that indicates imprinting. Nevertheless, entrepreneurs with closure experience are positively associated with the probability of M&A when their co-founders have M&A experience. We suggest that entrepreneurs with closure experience can compensate for their lack of M&A experience by learning from their peers who possess this experience. We discuss implications for theory, investors, and entrepreneurs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Risk and Financial Management ; ISSN: 1911-8074 ; Volume: 15 ; Year: 2022 ; Issue: 9 ; Pages: 1-17

Classification and Topics

• Classification: Management
• Subject: closure experience ; entrepreneurs ; funding ; M&A

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Harel, Shai ; Solodoha, Eliran ; Rosenzweig, Stav
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2022

Further information

• DOI: doi:10.3390/jrfm15090386
• Handle: http://hdl.handle.net/10419/274907
• Last update: 10.03.2025, 11:44 AM CET