IDEAS home Printed from https://ideas.repec.org/a/sae/jouent/v29y2020i2p365-394.html
   My bibliography  Save this article

A Co-opetition View of the Entrepreneur–Investor Relationship: Modelling Entrepreneurial Exit Pathways

Author

Listed:
  • M. Nesij Huvaj

Abstract

Drawing from the awareness–motivation–capability (AMC) perspective, this article develops a theoretical model, linking the relationship between the entrepreneur and investors to the entrepreneur’s exit path from her venture. It is argued that the relationship between the entrepreneur and the investors can be construed as being co-opetitive in nature, that is, simultaneously involving collaboration to grow the venture and competition to obtain a larger equity stake in the venture and broader decision-making rights. The article contributes to the entrepreneurship literature by developing a co-opetition view of the entrepreneur–investor relationship, theoretically modelling different exit pathways, and linking them to success versus failure perceptions of the entrepreneur’s exit from her venture.

Suggested Citation

  • M. Nesij Huvaj, 2020. "A Co-opetition View of the Entrepreneur–Investor Relationship: Modelling Entrepreneurial Exit Pathways," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(2), pages 365-394, September.
    • Handle: RePEc:sae:jouent:v:29:y:2020:i:2:p:365-394
    DOI: 10.1177/0971355720924896
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0971355720924896
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0971355720924896?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pissarides, Francesca, 1999. "Is lack of funds the main obstacle to growth? ebrd's experience with small- and medium-sized businesses in central and eastern europe," Journal of Business Venturing, Elsevier, vol. 14(5-6), pages 519-539.
    2. Carter, Nancy M. & Gartner, William B. & Shaver, Kelly G. & Gatewood, Elizabeth J., 2003. "The career reasons of nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(1), pages 13-39, January.
    3. Wenpin Tsai, 2002. "Social Structure of “Coopetition” Within a Multiunit Organization: Coordination, Competition, and Intraorganizational Knowledge Sharing," Organization Science, INFORMS, vol. 13(2), pages 179-190, April.
    4. Susan Mueller & Thierry Volery & Björn von Siemens, 2012. "What Do Entrepreneurs Actually Do? An Observational Study of Entrepreneurs’ Everyday Behavior in the Start–Up and Growth Stages," Entrepreneurship Theory and Practice, , vol. 36(5), pages 995-1017, September.
    5. Ucbasaran, Deniz & Westhead, Paul & Wright, Mike & Flores, Manuel, 2010. "The nature of entrepreneurial experience, business failure and comparative optimism," Journal of Business Venturing, Elsevier, vol. 25(6), pages 541-555, November.
    6. DeTienne, Dawn R., 2010. "Entrepreneurial exit as a critical component of the entrepreneurial process: Theoretical development," Journal of Business Venturing, Elsevier, vol. 25(2), pages 203-215, March.
    7. Cardon, Melissa S. & Stevens, Christopher E. & Potter, D. Ryland, 2011. "Misfortunes or mistakes?: Cultural sensemaking of entrepreneurial failure," Journal of Business Venturing, Elsevier, vol. 26(1), pages 79-92, January.
    8. Douglas, Evan J., 2013. "Reconstructing entrepreneurial intentions to identify predisposition for growth," Journal of Business Venturing, Elsevier, vol. 28(5), pages 633-651.
    9. Evan J. Douglas & Dean A. Shepherd, 2002. "Self-Employment as a Career Choice: Attitudes, Entrepreneurial Intentions, and Utility Maximization," Entrepreneurship Theory and Practice, , vol. 26(3), pages 81-90, April.
    10. Dutta, Dev K. & Thornhill, Stewart, 2008. "The evolution of growth intentions: Toward a cognition-based model," Journal of Business Venturing, Elsevier, vol. 23(3), pages 307-332, May.
    11. Garry Bruton & Vance Fried & Robert D. Hisrich, 1997. "Venture Capitalist and CEO Dismissal," Entrepreneurship Theory and Practice, , vol. 21(3), pages 41-54, April.
    12. Dean A. Shepherd & Andrew Zacharakis, 2001. "The venture capitalist-entrepreneur relationship: Control, trust and confidence in co-operative behaviour," Venture Capital, Taylor & Francis Journals, vol. 3(2), pages 129-149, April.
    13. Bates, Timothy, 2005. "Analysis of young, small firms that have closed: delineating successful from unsuccessful closures," Journal of Business Venturing, Elsevier, vol. 20(3), pages 343-358, May.
    14. Wennberg, Karl & Wiklund, Johan & DeTienne, Dawn R. & Cardon, Melissa S., 2010. "Reconceptualizing entrepreneurial exit: Divergent exit routes and their drivers," Journal of Business Venturing, Elsevier, vol. 25(4), pages 361-375, July.
    15. Jolanda Hessels & Isabel Grilo & Roy Thurik & Peter Zwan, 2011. "Entrepreneurial exit and entrepreneurial engagement," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 447-471, August.
    16. Gorman, Michael & Sahlman, William A., 1989. "What do venture capitalists do?," Journal of Business Venturing, Elsevier, vol. 4(4), pages 231-248, July.
    17. DeTienne, Dawn R. & McKelvie, Alexander & Chandler, Gaylen N., 2015. "Making sense of entrepreneurial exit strategies: A typology and test," Journal of Business Venturing, Elsevier, vol. 30(2), pages 255-272.
    18. Dawn R. DeTienne & Francesco Chirico, 2013. "Exit Strategies in Family Firms: How Socioemotional Wealth Drives the Threshold of Performance," Entrepreneurship Theory and Practice, , vol. 37(6), pages 1297-1318, November.
    19. Parhankangas, Annaleena & Landstrom, Hans, 2006. "How venture capitalists respond to unmet expectations: The role of social environment," Journal of Business Venturing, Elsevier, vol. 21(6), pages 773-801, November.
    20. Brockner, Joel & Higgins, E. Tory & Low, Murray B., 2004. "Regulatory focus theory and the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 19(2), pages 203-220, March.
    21. Brian Mccann & Timothy Folta, 2009. "Sunk costs, uncertainly and market exit : a real options perspective," Post-Print hal-02312513, HAL.
    22. Peter W. Moroz & Kevin Hindle, 2012. "Entrepreneurship as a Process: Toward Harmonizing Multiple Perspectives," Entrepreneurship Theory and Practice, , vol. 36(4), pages 781-818, July.
    23. Elango, B. & Fried, Vance H. & Hisrich, Robert D. & Polonchek, Amy, 1995. "How venture capital firms differ," Journal of Business Venturing, Elsevier, vol. 10(2), pages 157-179, March.
    24. Erik Stam & Roy Thurik & Peter van der Zwan, 2010. "Entrepreneurial exit in real and imagined markets," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1109-1139, August.
    25. Dawn DeTienne & Melissa Cardon, 2012. "Impact of founder experience on exit intentions," Small Business Economics, Springer, vol. 38(4), pages 351-374, May.
    26. Sofie Balcaen & Sophie Manigart & Jozefien Buyze & Hubert Ooghe, 2012. "Firm exit after distress: differentiating between bankruptcy, voluntary liquidation and M&A," Small Business Economics, Springer, vol. 39(4), pages 949-975, November.
    27. Scott Shane, 2000. "Prior Knowledge and the Discovery of Entrepreneurial Opportunities," Organization Science, INFORMS, vol. 11(4), pages 448-469, August.
    28. Fried, Vance H. & Bruton, Garry D. & Hisrich, Robert D., 1998. "Strategy and the board of directors in venture capital-backed firms," Journal of Business Venturing, Elsevier, vol. 13(6), pages 493-503, November.
    29. Jenkins, Anna S. & Wiklund, Johan & Brundin, Ethel, 2014. "Individual responses to firm failure: Appraisals, grief, and the influence of prior failure experience," Journal of Business Venturing, Elsevier, vol. 29(1), pages 17-33.
    30. Singh, Smita & Corner, Patricia & Pavlovich, Kathryn, 2007. "Coping with entrepreneurial failure," Journal of Management & Organization, Cambridge University Press, vol. 13(4), pages 331-344, November.
    31. Brinckmann, Jan & Grichnik, Dietmar & Kapsa, Diana, 2010. "Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning-performance relationship in small firms," Journal of Business Venturing, Elsevier, vol. 25(1), pages 24-40, January.
    32. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    33. Simon Parker, 2000. "Saving to Overcome Borrowing Constraints: Implications for Small Business Entry and Exit," Small Business Economics, Springer, vol. 15(3), pages 223-232, November.
    34. Christina Guenther & Simon Oertel & Peter Walgenbach, 2016. "It's all about Timing: Age–Dependent Consequences of Founder Exits and New Member Additions," Entrepreneurship Theory and Practice, , vol. 40(4), pages 843-865, July.
    35. Justo, Rachida & DeTienne, Dawn R. & Sieger, Philipp, 2015. "Failure or voluntary exit? Reassessing the female underperformance hypothesis," Journal of Business Venturing, Elsevier, vol. 30(6), pages 775-792.
    36. Harald Strotmann, 2007. "Entrepreneurial Survival," Small Business Economics, Springer, vol. 28(1), pages 87-104, January.
    37. Ensley, Michael D. & Pearson, Allison W. & Amason, Allen C., 2002. "Understanding the dynamics of new venture top management teams: cohesion, conflict, and new venture performance," Journal of Business Venturing, Elsevier, vol. 17(4), pages 365-386, July.
    38. Haveman, Heather A. & Khaire, Mukti V., 2004. "Survival beyond succession? The contingent impact of founder succession on organizational failure," Journal of Business Venturing, Elsevier, vol. 19(3), pages 437-463, May.
    39. Garry D. Bruton & Salim Chahine & Igor Filatotchev, 2009. "Founders, Private Equity Investors, and Underpricing in Entrepreneurial IPOs," Entrepreneurship Theory and Practice, , vol. 33(4), pages 909-928, July.
    40. Annetta Fortune & Will Mitchell, 2012. "Unpacking Firm Exit at the Firm and Industry Levels: The Adaptation and Selection of Firm Capabilities," Strategic Management Journal, Wiley Blackwell, vol. 33(7), pages 794-819, July.
    41. Gundry, Lisa K. & Welsch, Harold P., 2001. "The ambitious entrepreneur: High growth strategies of women-owned enterprises," Journal of Business Venturing, Elsevier, vol. 16(5), pages 453-470, September.
    42. Colin Mason & Richard Harrison, 2006. "After the exit: Acquisitions, entrepreneurial recycling and regional economic development," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 55-73.
    43. Douglas Cumming, 2008. "Contracts and Exits in Venture Capital Finance," The Review of Financial Studies, Society for Financial Studies, vol. 21(5), pages 1947-1982, September.
    44. Jonathan O'Brien & Timothy Folta, 2009. "Sunk costs, uncertainty and market exit: A real options perspective," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(5), pages 807-833, October.
    45. Andrew Zacharakis & Truls Erikson & Bradley George, 2010. "Conflict between the VC and entrepreneur: the entrepreneur's perspective," Venture Capital, Taylor & Francis Journals, vol. 12(2), pages 109-126, March.
    46. Veroniek Collewaert, 2012. "Angel Investors’ and Entrepreneurs’ Intentions to Exit Their Ventures: A Conflict Perspective," Entrepreneurship Theory and Practice, , vol. 36(4), pages 753-779, July.
    47. Henry L. Tosi & Amy L. Brownlee & Paula Silva & Jeffrey P. Katz, 2003. "An Empirical Exploration of Decision‐making Under Agency Controls and Stewardship Structure," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 2053-2071, December.
    48. Timmons, Jeffry A. & Bygrave, William D., 1986. "Venture capital's role in financing innovation for economic growth," Journal of Business Venturing, Elsevier, vol. 1(2), pages 161-176.
    49. Mark Van Osnabrugge, 2000. "A comparison of business angel and venture capitalist investment procedures: An agency theory-based analysis," Venture Capital, Taylor & Francis Journals, vol. 2(2), pages 91-109, April.
    50. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Tinbergen Institute Discussion Papers 03-050/3, Tinbergen Institute.
    51. Wennberg, Karl & Wiklund, Johan & Hellerstedt, Karin & Nordqvist, Mattias, 2011. "Implications of Intra-Family and External Ownership Transfer Of Family Firms: Short Term and Long Term Performance," Ratio Working Papers 172, The Ratio Institute.
    52. Dehlen, Tobias & Zellweger, Thomas & Kammerlander, Nadine & Halter, Frank, 2014. "The role of information asymmetry in the choice of entrepreneurial exit routes," Journal of Business Venturing, Elsevier, vol. 29(2), pages 193-209.
    53. Cassar, Gavin, 2014. "Industry and startup experience on entrepreneur forecast performance in new firms," Journal of Business Venturing, Elsevier, vol. 29(1), pages 137-151.
    54. Wright, Mike & Robbie, Ken & Ennew, Christine, 1997. "Venture capitalists and serial entrepreneurs," Journal of Business Venturing, Elsevier, vol. 12(3), pages 227-249, May.
    55. Cope, Jason, 2011. "Entrepreneurial learning from failure: An interpretative phenomenological analysis," Journal of Business Venturing, Elsevier, vol. 26(6), pages 604-623.
    56. Jolanda Hessels & Marco Gelderen & Roy Thurik, 2008. "Entrepreneurial aspirations, motivations, and their drivers," Small Business Economics, Springer, vol. 31(3), pages 323-339, October.
    57. Noam Wasserman, 2003. "Founder-CEO Succession and the Paradox of Entrepreneurial Success," Organization Science, INFORMS, vol. 14(2), pages 149-172, April.
    58. William S. Schulze & Michael H. Lubatkin & Richard N. Dino & Ann K. Buchholtz, 2001. "Agency Relationships in Family Firms: Theory and Evidence," Organization Science, INFORMS, vol. 12(2), pages 99-116, April.
    59. Ken Robbie & Mike Wright, 1995. "Managerial And Ownership Succession And Corporate Restructuring: The Case Of Management Buy‐Ins," Journal of Management Studies, Wiley Blackwell, vol. 32(4), pages 527-549, July.
    60. Lin, Zhengxi & Picot, Garnett & Compton, Janice, 2000. "The Entry and Exit Dynamics of Self-Employment in Canada," Small Business Economics, Springer, vol. 15(2), pages 105-125, September.
    61. Deniz Ucbasaran & Andy Lockett & Mike Wright & Paul Westhead, 2003. "Entrepreneurial Founder Teams: Factors Associated with Member Entry and Exit," Entrepreneurship Theory and Practice, , vol. 28(2), pages 107-128, March.
    62. Jonathan D. Arthurs & Lowell W. Busenitz, 2003. "The Boundaries and Limitations of Agency Theory and Stewardship Theory in the Venture Capitalist/Entrepreneur Relationship," Entrepreneurship Theory and Practice, , vol. 28(2), pages 145-162, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shahid, Pirzada Syed Rizwan, 2023. "Founder's Human Capital and the Entrepreneurial Process Duration," OSF Preprints yf6mg, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Strese, Steffen & Gebhard, Philipp & Feierabend, David & Brettel, Malte, 2018. "Entrepreneurs' perceived exit performance: Conceptualization and scale development," Journal of Business Venturing, Elsevier, vol. 33(3), pages 351-370.
    2. Khelil, Nabil, 2016. "The many faces of entrepreneurial failure: Insights from an empirical taxonomy," Journal of Business Venturing, Elsevier, vol. 31(1), pages 72-94.
    3. Gottschalk, Sandra & Greene, Francis J. & Höwer, Daniel & Müller, Bettina, 2014. "If you don't succeed, should you try again? The role of entrepreneurial experience in venture survival," ZEW Discussion Papers 14-009, ZEW - Leibniz Centre for European Economic Research.
    4. Sanguineti, Francesca & Majocchi, Antonio & Cavusgil, S. Tamer, 2022. "Founding entrepreneur’s dilemma: Stay or exit the firm following an acquisition? An international comparison," International Business Review, Elsevier, vol. 31(1).
    5. Yamakawa, Yasuhiro & Cardon, Melissa S., 2017. "How prior investments of time, money, and employee hires influence time to exit a distressed venture, and the extent to which contingency planning helps," Journal of Business Venturing, Elsevier, vol. 32(1), pages 1-17.
    6. Eugene Kaciak & Izabela Koladkiewicz & Narongsak (Tek) Thongpapanl & Marta Wojtyra, 0. "The role of social networks in shaping entrepreneurial exit strategies," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-37.
    7. Eugene Kaciak & Izabela Koladkiewicz & Narongsak (Tek) Thongpapanl & Marta Wojtyra, 2021. "The role of social networks in shaping entrepreneurial exit strategies," International Entrepreneurship and Management Journal, Springer, vol. 17(4), pages 1619-1655, December.
    8. Justo, Rachida & DeTienne, Dawn R. & Sieger, Philipp, 2015. "Failure or voluntary exit? Reassessing the female underperformance hypothesis," Journal of Business Venturing, Elsevier, vol. 30(6), pages 775-792.
    9. Marta Widz & Nadine Kammerlander, 2023. "Entrepreneurial exit intentions in emerging economies: a neoinstitutional perspective," Small Business Economics, Springer, vol. 60(2), pages 615-638, February.
    10. Costa, Paula L. & Ferreira, João J. & Torres de Oliveira, Rui, 2023. "From entrepreneurial failure to re-entry," Journal of Business Research, Elsevier, vol. 158(C).
    11. Brajaballav Kar & Yimer Ayalew Ahmed, 2021. "Quit or continue? The influence of demography, challenges and performance," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 83-95, December.
    12. Mattias Nordqvist & Karl Wennberg & Massimo Bau’ & Karin Hellerstedt, 2013. "An entrepreneurial process perspective on succession in family firms," Small Business Economics, Springer, vol. 40(4), pages 1087-1122, May.
    13. Gregori, Patrick & Ukobitz, Desiree V. & Parastuty, Zulaicha, 2018. "A Conceptual Framework on Entrepreneurial Team Member Exits: A Starting Point for Further Research," 6th International OFEL Conference on Governance, Management and Entrepreneurship. New Business Models and Institutional Entrepreneurs: Leading Disruptive Change (Dubrovnik, 2018), in: 6th International OFEL Conference on Governance, Management and Entrepreneurship. New Business Models and Institutional Entrepreneurs: Leading Disrupt, pages 453-474, Governance Research and Development Centre (CIRU), Zagreb.
    14. Patrick Gregori & Zulaicha Parastuty, 2021. "Investigating the process of entrepreneurial team member exits: a systematic review and future research directions," Review of Managerial Science, Springer, vol. 15(4), pages 847-878, May.
    15. Emanuela Carbonara & Hien Thu Tran & Enrico Santarelli, 2020. "Determinants of novice, portfolio, and serial entrepreneurship: an occupational choice approach," Small Business Economics, Springer, vol. 55(1), pages 123-151, June.
    16. DeTienne, Dawn R. & McKelvie, Alexander & Chandler, Gaylen N., 2015. "Making sense of entrepreneurial exit strategies: A typology and test," Journal of Business Venturing, Elsevier, vol. 30(2), pages 255-272.
    17. Sascha Hohen & Lars Schweizer, 2021. "Entrepreneurs’ Exit Strategy Intentions and Their Final Exit Paths," Schmalenbach Journal of Business Research, Springer, vol. 73(3), pages 443-477, December.
    18. Veroniek Collewaert, 2012. "Angel Investors’ and Entrepreneurs’ Intentions to Exit Their Ventures: A Conflict Perspective," Entrepreneurship Theory and Practice, , vol. 36(4), pages 753-779, July.
    19. Noni Symeonidou & Dawn R. DeTienne & Francesco Chirico, 2022. "The persistence of family firms: How does performance threshold affect family firm exit?," Small Business Economics, Springer, vol. 59(2), pages 477-489, August.
    20. Christina Guenther & Simon Oertel & Peter Walgenbach, 2016. "It's all about Timing: Age–Dependent Consequences of Founder Exits and New Member Additions," Entrepreneurship Theory and Practice, , vol. 40(4), pages 843-865, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jouent:v:29:y:2020:i:2:p:365-394. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.ediindia.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.