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We develop a conceptual model of entrepreneurial exit which includes exit through liquidation and firm sale for both firms in financial distress and firms performing well. This represents four distinct exit routes. In developing the model, we complement the prevailing theoretical framework of exit as a utility-maximizing problem among entrepreneurs with prospect theory and its recent applications in liquidation of investment decisions. We empirically test the model using two Swedish databases which follow 1,735 new ventures and their founders over eight years. We find that entrepreneurs exit from both firms in financial distress and firms performing well. In addition, commonly examined human capital factors (entrepreneurial experience, age, education) and failure-avoidance strategies (outside job, reinvestment) differ substantially across the four exit routes, explaining some of the discrepancies in earlier studies. Executive summaryEntrepreneurship research has paid considerable attention to reasons and methods people use for starting their ventures. Less attention has been paid to the methods people use for exiting their ventures or what factors contribute to their choice of exit route. Most existing models of entrepreneurial exit have conceptualized exit as a utility-maximizing choice and, as a consequenceimplicitly or explicitly -have equated exit with the failure of firms or individual entrepreneurs. A utility-maximization lens suggests that the decision to exit is either a sign of entrepreneurial failure or that the opportunity costs to entrepreneurship have risen substantially. However, an emerging body of research acknowledges that entrepreneurial exit may also be a successful outcome.In this paper we study the exit of individual entrepreneurs from the firm they helped to create. We draw on prospect theory and its recent application in behavioral finance that suggests that exit decisions are contingent on whether an entrepreneurial project is framed as a gain or as a loss. This theory predicts that gain or loss framing will affect not only the probability of exit, but also the type of exit. We argue that exit may be the result of failure as well as success, and research should identify which specific route of exit is utilized rather than assume that exit equates with either failure or success. We combine two existing theoretical models of entrepreneurial exit to define and investigate four exit routes: exit by liquidation of high or low performing firms (harvest liquidation, distress liquidation) and exit by sale of high or low performing firms (harvest sale, distress sale). We empirically examine the relationship between entrepreneurs' human capital and failure avoidance strategies for each exit route. The value of

Opportunity identification is emerging as an important content area in entrepreneurship education. We propose that opportunity identification is a competency that can be developed as are other unique competencies and that the entrepreneurship classroom is an appropriate venue for developing the skills necessary to improve the ability to identify opportunities. Using a variation of a Solomon Four Group Designed experiment, our results show that individuals can learn processes of opportunity identification and improve both the number of ideas generated and the innovativeness of those ideas. In addition, the results indicate that a predisposition toward innovation does not significantly alter the ability to learn processes of opportunity identification.

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91This article simultaneously explores the constructs of potential financial reward and prior knowledge of customer problems to provide a deeper understanding of the identification of opportunities. Results suggest that while prior knowledge of customer problems leads to the identification of more opportunities and opportunities that are more innovative, it also moderates the relationship between potential financial reward and opportunity identification. We found that the less knowledgeable an individual was about customer problems, the more positive the effect that potential financial reward had on the number of opportunities identified and the innovativeness of those opportunities.