Exits Flashcards Preview

Entrepreneurship > Exits > Flashcards

Flashcards in Exits Deck (20):
1

Schumpeter - notion of creative destruction

Purpose of entrepreneurship is to weaned out the business that aren’t very innovative. You have to destroy those that they aren’t doing as well to make room for new ones.

2

Coad

Birth
Survival
Death

3

Exit rates

Year 1 - 80% survival
Year 2 - 50% survival

80% small business fam run so risk is shared

4

Cope (2011)

Failure fosters higher level learning past mistakes are less likely to be repeated

5

Storey

Focus on entrepreneurial hubis - learning less likely

6

Shepherd et al

Impact of grief on future activity

7

Ford

Failure is the opportunity to begin again more intelligently

8

Hofer and charan

succession diminishes org performance, disrupts work routines, interrupts command and increases employee insecurity

9

Detienne - maturity phase

large percentage of growth motivated firms, founders have left the firm

10

Detienne exit strat

the exit may be modified over time, but I argue the development of an exit strategy will increase ability to exit and improve the number and the quality of the exit

11

Ucbasaran et al

Entrepreneurs are frequently described as suffering from and optimistic bias. High new business failure rates can be attributed to this bias. It is not clear whether all entrepreneurs are equally prone to this bias. We have argued that an entrepreneur prior business experience and business failures are linked to the likelihood of reporting comparative optimism

12

Wenburg et al avoidance strategies


Reducing costs
Invest equity. Reinvestment reduces probability of exit rates

13

Cope reading

Financial impact alone of failures can constrain dramatically and lead back to paid employment
Those who have experienced failure more peeped for trails
Woman struggle with grief and loss of failure

14

Gov statistics can...

Gives off wrong representation of entrepreneurship - don’t show differences between closure and failures

15

Calculating exit rate

Company registrations - lots of people don’t register or de register to avoid accepting failure
Inland revenues data - Grey areas - informal enterprise - cash in hand
Pressure group evidence
Do they matter - indicative or economic health/ dynamism/ opportunists - of low exit rates you as a country are doing well but may show easy and more have a go

16

Misinterpreting entrepreneurship exit

Risk calculations of entrepreneurial behaviour
Stigma - uk/us - cope us more accepting of failure
Creative destructions - which to keep going which to let go? You have ability to pic out things that are going to be successful
Learning opportunity - if it’s successful people might go off and learn about other stuff hr have previous knowledge too

17

Why do firms exit

Sale/merger
Financial distress
Market contraction
Coercion - from contextual point of view, firm transactional economies , eg Bulgaria organised crimes
Portfolio entrepreneurs

18

Why do entrepreneurs exit

Insufficient returns
Employement rate
Retirement
Succession
Return to employment - 10^ more wage - could be inaccurate cause of grey areas
Move in and out depending on market conditions

19

How do firms fail

Incremental - small, reoccurring problems
Catastrophic - loss of client, late payment, theft, fraud
Poor leadership
Incompetence

20

Carter and van uken

Firms with less sophisticated owners are more likely to fail
Firms with less access to capital are more likely to fail