We argue two alternative routes that lead entrepreneurial start-ups to acquisition outcomes instead of liquidation. On one hand, acquisitions can come about through the control route with external financers such as venture capitalists (VCs). VCs take control through their board seats along with other contractual rights that can bring about changes in a start-up necessary to successfully attract a strategic acquirer. Consistent with this view, we show that VCs often replace the founding entrepreneur as CEO long before an acquisition exit. On the other hand, acquisitions can come about through advice and support provided to the start-up, such as that provided by an incubator or technology park. Based on a sample of 251 Crunchbase companies in the U.S. over the years 2007 to 2014, we present evidence that is strongly consistent with these propositions. Further, we show that the data indicate a tension between VC-backing of start-ups resident in technology parks insofar as such start-ups are slower to become, and less likely to be, acquired.

We argue two alternative routes that lead entrepreneurial start-ups to acquisition outcomes instead of liquidation. On one hand, acquisitions can come about through the control route with external financers such as venture capitalists (VCs). VCs take control through their board seats along with other contractual rights that can bring about changes in a start-up necessary to successfully attract a strategic acquirer. Consistent with this view, we show that VCs often replace the founding entrepreneur as CEO long before an acquisition exit. On the other hand, acquisitions can come about through advice and support provided to the start-up, such as that provided by an incubator or technology park. Based on a sample of 251 Crunchbase companies in the U.S. over the years 2007 to 2014, we present evidence that is strongly consistent with these propositions. Further, we show that the data indicate a tension between VC-backing of start-ups resident in technology parks insofar as such start-ups are slower to become, and less likely to be, acquired.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Non-Technical SummaryVenture capital (VC) backed firms are among the most dynamic entrepreneurial firms contributing significantly to innovation and economic growth. This is particularly true for firms in high-tech industries on which most of venture-capital financing is concentrated on. One of the key inputs in this process is, besides VC financing, the spirit and human capital of the founders and entrepreneurs.While being a decisive input in this process, rather little is known about the career paths (after leaving the VC-backed venture) and personal backgrounds of VC-backed entrepreneurs. An important benefit of venture capital finance is that it spawns the creation of new ventures. That is, entrepreneurs backed by venture capitalists (VCs) tend to form new companies, or become coaches for new entrepreneurs in the form of business angels, after VCs exit the venture. Nevertheless, hitherto existing literature, which addresses the exit issue of entrepreneurs, mostly focuses (exclusively) on non-high-tech firms and hence, look -given the very different type of activities and firms -into a very different setting. Yet in this context, it would be of considerable importance to understand the role of VC in spawning new entrepreneurial activity, since it has implications for practice and policymakers alike. Where VC spawns new entrepreneurial activity, positive externalities emerge that exacerbate the benefits of VC finance.Hence, we aim to narrow this gap in the literature on the analysis of career paths of entrepreneurs in high-tech firms. In order to do so we address two main research questions. First, we relate the entry decision of founders (that is, whether they have worked for a start-up before, and their founding experience and education) with their exit decision, i.e. whether they stick with entrepreneurial activity or become dependently employed. Second, we investigate other drivers of the founders' exit decision such as the exit choice of the company itself or the financial success of the company. By answering both questions, we depict a broader picture of the dynamics of entrepreneurial careers, their patterns as well as the driving forces. We thereby also provide important new insights into the dynamics of the corporate governance of venturefinanced high-tech firms. In order to achieve these goals, we deploy a hand-collected sample of high-tech firms, which have received venture financing. Thereby, we focus on the patte...

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