Exits

Question 1

Schumpeter - notion of creative destruction

Answer 1

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.

Question 2

Coad

Answer 2

Birth
Survival
Death

Question 3

Exit rates

Answer 3

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

80% small business fam run so risk is shared

Question 4

Cope (2011)

Answer 4

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

Question 5

Storey

Answer 5

Focus on entrepreneurial hubis - learning less likely

Question 6

Shepherd et al

Answer 6

Impact of grief on future activity

Question 7

Ford

Answer 7

Failure is the opportunity to begin again more intelligently

Question 8

Hofer and charan

Answer 8

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

Question 9

Detienne - maturity phase

Answer 9

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

Question 10

Detienne exit strat

Answer 10

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

Question 11

Ucbasaran et al

Answer 11

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

Question 12

Wenburg et al avoidance strategies

Answer 12

Reducing costs

Invest equity. Reinvestment reduces probability of exit rates

Question 13

Cope reading

Answer 13

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

Question 14

Gov statistics can…

Answer 14

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

Question 15

Calculating exit rate

Answer 15

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

Question 16

Misinterpreting entrepreneurship exit

Answer 16

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

Question 17

Why do firms exit

Answer 17

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

Question 18

Why do entrepreneurs exit

Answer 18

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

Question 19

How do firms fail

Answer 19

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

Question 20

Carter and van uken

Answer 20

Firms with less sophisticated owners are more likely to fail

Firms with less access to capital are more likely to fail