Journal of Business Venturing xxx (xxxx) xxx–xxx

Contents lists available at ScienceDirect

Journal of Business Venturing

journal homepage: www.elsevier.com/locate/jbusvent

Entrepreneurs' perceived exit performance: Conceptualization

and scale development
⁎
Steffen Strese , Philipp Gebhard, David Feierabend, Malte Brettel
Innovation and Entrepreneurship Group (WIN), TIME Research Area, RWTH Aachen University, Kackertstr. 7, 52072 Aachen, Germany

AR TI CLE I NF O AB S T R A CT

JEL classification: Recently, research on entrepreneurs who exit their firms has intensified. Scholars agree that the
L26 - Entrepreneurship outcome of such entrepreneurial exits needs to be assessed based on the individual entrepreneur's
M13 - new firms perception and on multiple dimensions. Yet, to date we lack theory and measures that capture
Startups this outcome, which we define as entrepreneurs' perceived exit performance (PEP). This study
Keywords: introduces a theoretical framework for the PEP construct and develops a scale to measure it along
Entrepreneurial exit four dimensions: personal financial benefits, personal reputation, employee benefits, and firm
Perceived exit performance mission persistence. We discuss the wide applicability of the scale and a variety of research
Exit success
opportunities.
Measurement validation
Scale development

Executive summary

Scholars have identified numerous factors to determine how entrepreneurs can successfully found or grow a venture; research on
the success of founders who have exited their venture, however, is still scarce (Wennberg and DeTienne, 2014). This is surprising as
entrepreneurs' departure from the firm they helped create—referred to as entrepreneurial exit—is an event that is eventually in-
escapable for founder-manager entrepreneurs (DeTienne and Cardon, 2012). Hence, it is of central concern to every individual
entrepreneur.
Thus far, scholars have only few means to assess the outcome of an entrepreneurial exit—may it be successful or not—, which is
one reason for the scarcity of research in this area. Extant research measures the outcome based on financial or on categorical success
indicators such as the realized exit route (e.g., acquisition, buyout, liquidation). Scholars, however, argue that exiting entrepreneurs
do not merely aim at financial outcomes, but also at other dimensions of success, such as reputational gains, employee benefits, or
continued pursuance of the firm's mission (Dalziel, 2008; DeTienne et al., 2015; Graebner et al., 2010; Graebner and Eisenhardt,
2004). Moreover, scholars emphasize that the outcome of exit events needs to be assessed based on the individual entrepreneur's
perception (DeTienne, 2010). However, so far, we lack theory and validated scales that capture entrepreneurs' perception of the exit
outcome.
To close this gap and enable future research, we conceptualize the construct of perceived exit performance (PEP) and develop and
validate a scale to measure it. Our definition of PEP captures entrepreneurs' perception of the exit outcome, different perceived levels
of success, and financial and non-financial outcomes. We establish entrepreneurs' PEP with four dimensions: personal financial
benefits, personal reputation, employee benefits, and firm mission persistence. To develop, test, and validate the PEP scale, we follow
proven scale development procedures (e.g., DeVellis, 2012; Johnson and Morgan, 2016) and build on an extensive literature review

⁎
Corresponding author.
E-mail address: strese@time.rwth-aachen.de (S. Strese).

https://doi.org/10.1016/j.jbusvent.2018.01.005
Received 14 April 2016; Received in revised form 23 January 2018; Accepted 25 January 2018
0883-9026/ © 2018 Elsevier Inc. All rights reserved.

Please cite this article as: Strese, S., Journal of Business Venturing (2018), https://doi.org/10.1016/j.jbusvent.2018.01.005
S. Strese et al. Journal of Business Venturing xxx (xxxx) xxx–xxx

and three consecutive studies. Those studies draw on 29 interviews and two unique samples with a total of 203 entrepreneurs with
exit experience.
By introducing a theoretical framework and by offering a validated scale for the PEP construct, our study enables scholars in
entrepreneurship and related domains—for the first time—to differentiate in a reliable way between successful and unsuccessful exits
from the individual entrepreneur's perspective. Our scale provides scholars with a methodological toolkit to advance research based
on large-scale empirical data. Consequently, our scale might help answer the determinative question: What makes an exit successful
from an entrepreneur's perspective? Furthermore, researchers using our scale might also be able to clarify various other questions
raised in this study. Given that our scale reflects both the vernacular of entrepreneurs and their reality, its application will help unveil
important insights—not only for scholar, but also for entrepreneurs, investors, and decision makers shaping the institutional en-
vironment.

1. Introduction

Scholars acknowledge that the departure of entrepreneurs from the firm they helped create—commonly referred to as en-
trepreneurial exit—is a critical event. It might be the end of an individual's entrepreneurial activity or the starting point of a new one
(DeTienne, 2010; DeTienne et al., 2015). This study focuses on entrepreneurs who left their firm voluntarily or due to external forces.
We do not equate such an exit with a failure as it might as well represent a success (Cefis and Marsili, 2012; Headd, 2003).
At the heart of recent research lies the following basic belief: an entrepreneurial exit is an individual-level phenomenon, it needs
to be distinguished from a firm exit (it still can coincide temporally), and it comprises multiple dimensions that individual en-
trepreneurs can perceive both as a positive and a negative outcome (Aldrich, 2015; DeTienne and Wennberg, 2016; Wennberg and
DeTienne, 2014). Extant research has developed theories to enhance our understanding of distinct exit routes and strategies
(DeTienne et al., 2015; Wennberg et al., 2010), of exit intentions and paths (Cefis and Marsili, 2012; Dehlen et al., 2014; DeTienne
and Cardon, 2012), or of differentiations between successful exits, business closure, and failure (Bates, 2005; Headd, 2003; Jenkins
and McKelvie, 2016; Lee and Lee, 2014). This research stream helps delineate the phenomenon of entrepreneurial exit more clearly
from firm exit (Aldrich, 2015) and from exit performance from the investors' perspective (e.g., Dai et al., 2012).
Although assessing individual-level outcomes of entrepreneurial exit events is deemed important to discern successful from
unsuccessful exits (Dalziel, 2008; DeTienne and Cardon, 2012; Wennberg and DeTienne, 2014), extant theory is rather restricted by
its focus on financial outcomes. It also strongly relies on categorical success indicators such as the realized exit route (e.g., acqui-
sition, buyout, liquidation) (Lee and Lee, 2014; Marvel et al., 2016). In contrast, DeTienne (2010, p. 205) suggests that “dependent
variables in entrepreneurial exit are likely to be tightly linked to the entrepreneur's perception of exit.” Thus far, however, we lack
theory and measures that capture entrepreneurs' perception of the exit outcome and focus on the entrepreneurs themselves. This is
particularly surprising since an exit event is the final step of an individual's entrepreneurial process and hence represents a natural
moment to assess its outcome.
Our study addresses this research gap. By proposing a novel conceptualization of the outcome of the exit event from the en-
trepreneur's individual perspective, we extend theory on entrepreneurial exit in several ways. First, we introduce a theoretical
framework for the construct of perceived exit performance (PEP). Building on and complementing extant entrepreneurship literature,
we derive a conceptualization of PEP capturing the entrepreneur's perception of the exit outcome, different perceived levels of
success, and financial and non-financial outcomes. We establish PEP as consisting of four dimensions: personal financial benefits,
personal reputation, employee benefits, and firm mission persistence. With this, we expand extant theory on entrepreneurial exits
which—in contrast to this study—focuses on decisions, processes, or intentions leading to the exit or on success criteria such as exit
routes or financial outcomes (Wennberg and DeTienne, 2014). We also contribute to the entrepreneurship literature as we advance its
aim to understand entrepreneurial phenomena from the individual's point of view (Sarasvathy, 2004; Venkataraman, 1997). Second,
this study contributes to entrepreneurship research methodologically by offering a conveniently applicable scale to examine an exit
event's outcome in a more granular way. Drawing on an extensive literature review, 29 interviews, and two unique samples with a
total of 203 entrepreneurs with exit experience, we conduct three studies to devise the PEP scale. Third, by developing theory and
measurement instruments for PEP, we add to the important debate that aims to differentiate successful from unsuccessful exits
(DeTienne et al., 2015) and enable scholars—for the first time—to arrive at such a delineation based on the individual entrepreneur's
perspective and not only on publicly observable phenomena. Finally, we present diverse research opportunities and provide first
insights into the usefulness of the PEP measure. We show how exit planning and entrepreneurs' prior industry-related experience can
enhance the exit performance in selected dimensions. In sum, our study's conceptualization and scale might offer answers to the
determinative question: What makes an exit successful from an entrepreneur's perspective?

2. Conceptual background

2.1. Entrepreneurial exit

Entrepreneurial exit commonly refers to “the process by which the founders of privately held firms leave the firm they helped to
create; thereby removing themselves, in varying degree, from the primary ownership and decision-making structure of the firm”
(DeTienne, 2010, p. 204). Following this view, scholars have recently begun to focus on exits of individual entrepreneurs. Yet, we
know little about entrepreneurs' perception of the exit outcome. Prior works have developed conceptual models and typologies of
individual exit routes (DeTienne et al., 2015; Wennberg et al., 2010), demonstrated the importance of exits for further

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entrepreneurial activities (Hessels et al., 2011; Wiklund and Shepherd, 2008), analyzed factors influencing individual exit intentions
and paths (Cefis and Marsili, 2012; Dehlen et al., 2014; DeTienne and Cardon, 2012), and addressed entrepreneurial exit as business
closure or failure (Bates, 2005; Headd, 2003; Jenkins and McKelvie, 2016; Lee and Lee, 2014). Notably, DeTienne's (2010) above-
mentioned definition of entrepreneurial exit refers to entrepreneurial exit as a process; it does not represent an assessment of the exit
per se. In contrast, our study does not concentrate on the process leading to the exit or on post-exit activities, but on the actual
outcome of the exit from the entrepreneur's perspective. Hence, this study focuses on the exit as an event occurring when founders of
privately held firms leave the venture they helped create.

2.2. Perceived exit performance (PEP)

This study follows Venkataraman (1997) and puts the entrepreneur at the core of our considerations. Given the lack of extant
theory on PEP—albeit suggested to be important (Dalziel, 2008; DeTienne, 2010; Wennberg and DeTienne, 2014)—we build on
related research to derive a definition of PEP. First, exit events are often assessed from an investor perspective or other dimensions
external to the entrepreneur's perspective (e.g., Cumming and Dai, 2010; Streletzki and Schulte, 2014). Exit performance is also
determined based on the realized exit route (Lee and Lee, 2014), labeling, for instance, acquisitions as success. However, as ac-
quisitions do not always represent a success (e.g., Bort, 2015), exit routes do not accurately capture the entrepreneur's point of view
of whether an exit was successful or not. Moreover, some entrepreneurship scholars argue that “if we are to develop real content in
entrepreneurship, we need to focus our attention on understanding it from the point of view of the entrepreneur” (Sarasvathy, 2004,
p. 713). This focus is important as entrepreneurs represent a heterogeneous group of individuals with different preferences
(Sarasvathy, 2004). Heterogeneity exists along all steps of the entrepreneurial process (Shane et al., 2003)—from the decision to
become an entrepreneur, to the formation of growth aspirations, and to the evaluation of venture performance (e.g., Amit et al., 2001;
Cassar, 2007; Wiklund et al., 2003). Research on acquisitions shows that individual sellers also perceive success differently (Dalziel,
2008; Graebner and Eisenhardt, 2004). Hence, individual entrepreneurs are likely to perceive exit events differently as well. Con-
sequently, conceptualizing the outcomes of such events entails eliciting an individual entrepreneur's perception.
Second, much prior literature considers an exit a failure (Caves, 1998; Coad, 2014; Fackler et al., 2012). Recent research on
entrepreneurial exit has argued that this is contrary to the actual experience of entrepreneurs, many of whom see the exit as the
ultimate fulfillment of a single entrepreneurial endeavor (Wennberg and DeTienne, 2014). Studies on serial entrepreneurship also
take a positive perspective on exits, as a single exit is often the starting point for further entrepreneurial activity (e.g., Wiklund and
Shepherd, 2008). Yet, entrepreneurial failure still frequently materializes in an exit event (Ucbasaran et al., 2013), which might cause
negative perceptions. The same is true for voluntary exits not yielding a satisfying outcome for entrepreneurs. Hence, the PEP
definition needs to capture different perceived levels of success.
Third, prior research has identified entrepreneurs' aims along the entrepreneurial process (e.g., Fauchart and Gruber, 2011).
Scholars have applied two competing models that describe individuals' basic aims (Davis et al., 1997). The Schumpeterian model
assumes individuals to be more self-regarding, opportunistic, and mainly motivated by monetary incentives (Camerer and Fehr, 2006;
Schumpeter, 1934). This suggests that entrepreneurs assess an exit based on the degree to which they achieve personal benefits,
especially financial rewards (Amit et al., 2001). Stewardship theory depicts a more selfless individual that exhibits collectivistic, pro-
social behavior (Davis et al., 1997; Donaldson, 1990; Hernandez, 2012). Entrepreneurs might thus perceive their exit as a success if,
for instance, the well-being of their employees is ensured afterwards (DeTienne et al., 2015). This indicates that the PEP definition
needs to capture both views as they coexist and are frequently applied when assessing entrepreneurial intentions and motivations
(Fauchart and Gruber, 2011; Wiklund et al., 2003) or exit intentions (DeTienne et al., 2015). Scholars also agree that the outcomes of
entrepreneurial exits are not restricted to financial rewards, but include multiple dimensions (DeTienne, 2010; Kammerlander, 2016;
Petty, 1997). Hence, we define the construct of PEP as follows:
The perceived exit performance (PEP) is the individual entrepreneur's perception of the outcome of an entrepreneurial exit event and covers
different perceived levels of success and financial as well as non-financial outcomes.

2.3. Dimensions of PEP

To establish the relevant dimensions of PEP theoretically, we examined the literature on entrepreneurial exit and on en-
trepreneurs' aims along the entrepreneurial process. We included aims because PEP captures whether entrepreneurs perceive their
exit as a success or not, with success being generally defined as “the accomplishment of an aim or purpose” (Oxford Dictionary,
2016). In a first step, we searched EBSCO's Academic Search Complete using the search terms “aim”, “motivation”, “motive”,
“success”, “intention”, and “exit” in combination with “entrepreneurial”, “entrepreneur”, “founder”, or “seller”. We also searched
within extant literature reviews on entrepreneurial exit (e.g., DeTienne, 2010; DeTienne et al., 2015; Wennberg and DeTienne, 2014).
We examined the identified articles and excluded those that did not focus on the individual entrepreneur's perspective and that did
not provide aims along the entrepreneurial process that might relate to the exit outcome. 19 articles turned out to be particularly
relevant (cf. Appendix A for a summary). To discern common themes that might represent PEP dimensions and following the two
competing models of individuals described above, we categorized the aims determined in these articles according to their self-
regarding (Schumpeter, 1934) or collectivistic nature (Hernandez, 2012) (see first row headers of Appendix A). For instance, Amit
et al. (2001) investigate entrepreneurs' financial and non-financial motives to start a venture. They find that although attaining
wealth and desiring to differentiate oneself (i.e., ego) are important, it is even more crucial to entrepreneurs to pursue a vision and

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innovate or to achieve independence. While wealth attainment and ego fall more into the category of self-regard, pursuing a vision
and innovations is more of a collectivistic nature (Strese et al., 2016). Striving for independence, however, fits into none of the two
categories. If a clear allocation to one of the two models was not possible, we collected those aims separately under “other aspects.”
In a second step, we delved deeper into this allocation, which still comprised many aspects. We identified a common theme of
repeatedly occurring self-regarding aims such as personal economic, financial, or wealth-related objectives. We summarized these
aims as the dimension of personal financial benefits. The remaining self-regarding aims cover personal, ego-related reputation and
recognition aspects, which we summarized as the dimension of personal reputation. The identified collectivistic aims address either the
employee or the organizational level. Hence, we summarized repeatedly occurring aims relating to the well-being of employees in an
employee benefits dimension. Aims such as pursuing a vision or innovation and future firm growth represent a fourth dimension, firm
mission persistence. Next, we present the theoretical rationale differentiating relevant from irrelevant dimensions.

2.3.1. Personal financial benefits

Financial gain and wealth attainment are prevalent motives for individual entrepreneurs (Amit et al., 2001; DeTienne, 2010;
Kammerlander, 2016). If it does not fulfil basic economic needs, entrepreneurs must inevitably consider their entrepreneurial acti-
vity—including an exit—unsuccessful or even a failure (Khelil, 2016). Financial motives are relevant as fundamental classifications of
entrepreneurs distinguish between either income generation or the exploitation of growth opportunities as main objectives (Douglas,
2013; Stewart et al., 1999; Wennekers et al., 2005). At later stages, financial motives influence the entrepreneur's resource allocation
toward the venture (Dunkelberg et al., 2013), the decision whether or not to grow (Davidsson, 1989; Morris et al., 2006), or the
evaluation of acquisitions (Dalziel, 2008; Graebner and Eisenhardt, 2004). Campbell (1992) argues that opportunity costs regarding
alternative modes of employment for entrepreneurs need to be taken into account as well. Moreover, entrepreneurs also develop a
sense of their company's worth and relate this to the actual firm valuation (Petty et al., 1994). This suggests that entrepreneurs
consider all financial transactions directly related to the exit, the perceived opportunity costs, and also their sense of valuation.
Hence, such personal financial benefits are relevant as a potential dimension of PEP.

2.3.2. Personal reputation

Gaining personal reputation is a common career motivation for entrepreneurs (Carter et al., 2003). Amit et al. (2001) find that the
ego dimension is even more salient to entrepreneurs' decision to start a venture than to wealth attainment. This suggests that personal
reputation, which might increase with a successful exit, is a relevant dimension for the PEP. While empirical evidence for personal
reputational motives in growth decisions is rather weak (Cassar, 2007; Morris et al., 2006), research on the entrepreneur's role in
mergers and acquisitions (M&A) highlights the importance of such motives (Graebner and Eisenhardt, 2004; Mason and Harrison,
2006). This indicates that the personal reputation dimension gains relevance when it comes to an exit. In this context, entrepreneurs
particularly consider important their reputation among investors and industry peers (Graebner and Eisenhardt, 2004; Mason and
Harrison, 2006): Their reputation influences both future career prospects and investors' decisions to finance new entrepreneurial
projects (Shane and Cable, 2002). Thus, entrepreneurs likely assess their exit with regard to its effects on their personal standing,
which makes reputation a relevant dimension of PEP.

2.3.3. Employee benefits

When making growth decisions, entrepreneurs consider the effects of expected outcomes on their employees. Davidsson (1989)
finds that the fear of reduced employee well-being is a deterrent to growth. Wiklund et al. (2003) point in the same direction by
showing that the concern for employee well-being is more important in growth decisions than the expected financial outcomes. More
importantly, social criteria, such as employees' future career trajectories and integration into the new working environment after an
acquisition, are seen as relevant motives for entrepreneurs selling their firm (Dalziel, 2008; Graebner et al., 2010; Mason and
Harrison, 2006). Additionally, Graebner and Eisenhardt (2004) find in their in-depth case studies on acquisitions—the majority with
founder CEOs—that good cultural fit and respect for the selling firm's employees may benefit financially less attractive offers. This
suggests that exiting entrepreneurs take into account the magnitude of employee benefits. Hence, employee benefits represent a
relevant dimension for PEP.

2.3.4. Firm mission persistence

When starting entrepreneurial activities, it is a key motivator for entrepreneurs to realize a specific mission (Amit et al., 2001;
Fauchart and Gruber, 2011; Kolvereid, 1996; Shane et al., 2003). These missions might relate to a variety of aims such as fulfilling
specific customer needs or establishing a successful organization. Pursuing these aims, entrepreneurs build firms and embed the
mission into them. Hence, the venture can be characterized as a vehicle to achieve entrepreneurs' vision or mission (Sarasvathy,
2004). A mission also influences entrepreneurs when it comes to growth or exit decisions as they consider the future ability of their
venture to survive potential crises (Wiklund et al., 2003). With regard to an exit through sale, entrepreneurs take into account
decision criteria such as the continued pursuance of strategic initiatives and potential synergies with the acquirer (Dalziel, 2008;
Graebner and Eisenhardt, 2004; Mason and Harrison, 2006). Hence, the mission's persistence after an exit is a relevant, fourth
dimension of entrepreneurs' PEP.

2.3.5. Other aspects

Our literature review revealed other aspects that we were not able to assign to one of the two competing models that describe
individuals' basic aims (cf. “Other aspects” in Appendix A). Particularly for the earlier stages, the literature repeatedly describes

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motives such as personal independence and autonomy, control and power, self-realization, and challenge. However, these motives
either do not relate to the exit itself or are not relevant for the PEP. First, the motive to achieve personal independence and autonomy
is not linked to the exit as such, but to the new role or position assumed afterwards. Moreover, although the fear of losing control and
power is an important motive in growth considerations (Wiklund et al., 2003), a realized exit—by definition—implies the loss of
power over the venture. Thus, those aspects are not relevant as a dimension of PEP and need to be excluded from further analyses.
Second, the literature points to self-realization and challenge motives. These refer to individuals' psychological understanding of their
own objectives in life and are described in terms such as “realize one's dreams” or “self-actualizing” (Amit et al., 2001; Kolvereid,
1996). They seem related to the mission dimension but refer to a metaphysical, self-centric mission rather than to a mission com-
mitted to an external cause. Cassar (2007) finds that self-realization motives are far less important for entrepreneurs in later stages of
the entrepreneurial process (such as the entrepreneurial exit) than in earlier stages. Hence, such psychological aspects are not
relevant as a PEP dimension and are thus excluded from further analyses.1 Hence, we establish PEP with four dimensions.

3. Scale development

Since PEP cannot be observed directly as it is latent, we followed established procedures to develop a scale (e.g., Churchill, 1979;
DeVellis, 2012; Johnson and Morgan, 2016). In line with recent works (Cardon et al., 2013; Tang et al., 2012), we conducted three
studies with independent samples. In Study 1, we generate the initial item pool and assess for content adequacy, building on a
literature review and interviews with academic experts and 25 entrepreneurs. In Study 2, we draw on a sample of entrepreneurs to
test our items in terms of dimensionality, reliability, and validity. In Study 3, we conduct a confirmatory factor analysis (CFA) and
evaluate convergent, discriminant, and criterion validity.

3.1. Study 1: Item generation and external validation

3.1.1. Item generation

The purpose of item generation is to capture relevant content and to verify the dimensions (Johnson and Morgan, 2016). As there
was little theory on the construct, we followed a deductive and inductive approach to obtain our initial item list (Hinkin, 1995). In a
first step, we generated a pool of items based on reviewing related literature such as on entrepreneurial exit (e.g., DeTienne, 2010),
entrepreneurial intention (e.g., Krueger et al., 2000), entrepreneurial success (e.g., Cassar, 2007), M&A (e.g., Graebner and
Eisenhardt, 2004), family firms (e.g., Kammerlander, 2016; Sharma et al., 2003), and motivation (e.g., Kuratko et al., 1997). We
derived 15 items (personal financial benefits: 3; personal reputation: 4; employee benefits: 4; mission persistence: 4). In a second step,
we conducted a first wave of semi-structured interviews with entrepreneurs and academics. To ensure that the entrepreneurs were
knowledgeable, they had to have conducted at least one exit. To capture diverse aspects, we made sure that their ventures belonged
to various industries and that the exits followed different routes (e.g., acquisition, liquidation). We interviewed six entrepreneurs
(four were in paid employment, two were again entrepreneurs). Two of the authors conducted the interviews jointly in person or by
phone, with the interviews taking between 25 and 50 min. After a short introduction, we asked open questions about their individual
exit, their overall perception of it, and the different levels of perceived success. We then posed follow-up questions to develop a better
understanding of the individual exit perception. We paid close attention to their vernacular to be able to accurately formulate
potential items (Johnson and Morgan, 2016). We also interviewed four entrepreneurship researchers to reflect the most recent
academic views on exits. We inquired about their criteria for PEP, complemented our item pool, and—where needed—adapted the
wording. Mapping the items to the four PEP dimensions resulted in 13 additional items (personal financial benefits: 3; personal
reputation: 4; employee benefits: 2; mission persistence: 4).
Before conducting a second wave of interviews, we framed and consistently phrased the specific items. We ensured brevity and
clarity, addressed one issue per item, and avoided centrality, importance, and salience in order not to emphasize single items
(DeVellis, 2012; Johnson and Morgan, 2016). Choosing a time frame is crucial for a scale (DeVellis, 2012), particularly in the case of
PEP as it is unlikely to identify a relevant number of exits at one point in time. Moreover, it might be easier to assess some PEP
dimensions (e.g., employee benefits, mission persistence) some time after an exit event. Hence, we opted for a consistent time frame
by asking respondents to assess their PEP “From today's perspective” and only included respondents in our studies who exited not
more than ten years ago to assure a sufficient detail of memory. We used positive wording in the framing to reduce the complexity for
respondents (Johnson and Morgan, 2016). Where needed, we rephrased the items to match the framing phrase “From today's per-
spective, how successful was your exit regarding the following aspects?” We anchored the items on a 7-point Likert scale ranging from
1 (not at all successful) to 7 (very successful). We discussed all items with a scale development expert and two researchers in the field
to test for face validity (e.g., Sieger et al., 2016). Besides some minor wording refinements, no changes were needed to the 28 items.

3.1.2. External validation

We conducted a second wave of semi-structured interviews to verify the construct's dimensionality, to test for the items' content
validity, and to add, refine, delete, and pre-test the items (Johnson and Morgan, 2016). We conducted 19 interviews—relevant
literature suggests at least five (Netemeyer et al., 2003). All interviewees had conducted at least one exit; together, they represent a

1
Only few interviewees in Study 1 mentioned such psychological aspects. Moreover, an additional EFA with the sample of Study 2 including 7 potential items
covering these aspects showed an unclear pattern matrix, low factor loadings and high cross-loadings, and an uninterpretable, weak fifth factor.

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balanced sample with respect to exit route, year of exit, and venture industry. During the interviews, we introduced the subject and
asked about their understanding of the term “exit.” Then, we asked an open question about possible dimensions considered important
when assessing exit success. While we did not communicate the dimensions derived from the literature review in order not to prime
the interviewees, we did not observe the emergence of any new dimensions. Subsequently, we tested for content validity (DeVellis,
2012) and asked the interviewees to allocate the items to one of the four dimensions. Besides one item regarding financial benefits
and one regarding mission persistence, which we both removed, we found strong evidence for a valid mapping. Finally, we checked
the items for practicability by letting the interviewees review the wording and think about changes to the list, focusing on generality
and non-redundancy. We deleted one item of the mission persistence dimension as its wording was very similar to another item, and
added one item regarding financial benefits, which several interviewees mentioned.

3.2. Study 2: scale refinement

3.2.1. Sampling approach and survey data

The purpose of Study 2 is to test and validate empirically the remaining 26 items regarding dimensionality, reliability, and basic
validity. As a representative sample needs to “demonstrate the behaviors or possess the attitudes under examination” (Hinkin, 2005,
p. 169), we targeted entrepreneurs with exit experience. Sampling in this context can be challenging: there is no comprehensive
database, there are different exit routes, there is little information on the contact data of exiting founders, and founders are often
bound by non-disclosure agreements (van Teeffelen and Uhlaner, 2013; Wasserman, 2003). To generate our sample, we used da-
tabases tracking acquisitions and investments in private firms (e.g., CrunchBase, 2016), online magazines (e.g., deutsche-startups.de,
2016), and snowball sampling (Kalton and Anderson, 1986). We gathered contact data from sources such as Google and LinkedIn.
This resulted in 457 potential respondents in Germany, Austria, and Switzerland, which we contacted by e-mail or phone to ask for
their participation (Dillman et al., 2014). To overcome reluctance, we explained the study's background, assured confidentiality, and
offered a results report.
We collected the data in the first half of 2015 using the Qualtrics platform. We sent two reminders after two and four weeks. The
survey presented the items in four blocks along the PEP dimensions. All items were translated into German by bilingual experts and
back-translated to reduce the risk of translation bias (Brislin, 1986). We pre-tested the survey with both academics and entrepreneurs,
which resulted in minor changes in wording and survey layout. We then sent the survey to the 155 entrepreneurs who had agreed to
participate and fulfilled several criteria: (1) Respondents had to have own exit experience. We started the questionnaire with a
definition of an entrepreneurial exit and asked: “Have you ever conducted an exit?” (2) The exit had to have taken place in or after
2005 (i.e., not > 10 years ago) to reduce the risk of a recall bias, i.e., a systematic error regarding the remembrance of past ex-
periences (Robinson and Clore, 2002). (3) Since we are interested in exits from entrepreneurial firms (Autio et al., 2000), we excluded
ventures older than twelve years. (4) To arrive at a widely applicable scale, we did not restrict our sample to specific industries, firm
sizes, or founder team sizes.
We excluded responses where > 10% of values were missing (Newman, 2003). We also excluded exits through family succession
as they differ from other types (DeTienne et al., 2015; Wennberg et al., 2011). We gathered 92 responses. Hence, out of the initially
457 potential respondents, those 92 responses represent a response rate of 20.1%. This is relatively high compared to other web-
based surveys (Klassen and Jacobs, 2001), and we ascribe this to our effort to contact participants prior to sending the questionnaire.
We excluded 11 responses of founders who had no employees when exiting and hence were not able to assess the employee di-
mension. For the remaining 81 answers, we estimated missing values by applying the expectation-maximization algorithm (Newman,
2003). Table 1 shows the characteristics of the sample. The majority of the exits (63%) took place in the Internet/IT industry, which is
representative for the industry distribution in the sample countries (e.g., Kollmann et al., 2016). As suggested by DeTienne and
Cardon (2012), our sample covers different exit routes (see Table 2). Most exits in our sample are acquisitions and took place in one
industry; we hence conducted further tests to rule out a potential sample selection bias (cf. 3.3.2).
Following Armstrong and Overton (1977), we compared the means and the variances of early vs. late respondents using t-tests, which
did not reveal evidence for a non-response bias. As we included exits in a ten-year time frame as of 2005, our sample might be exposed to
recall bias with variations in perceptions over time (Robinson and Clore, 2002). To test for it, we compared the assessments of recent exits
with the ones dating back several years, splitting our sample along the median of three years. We found significant differences only in the
assessment of the financial dimension. However, the patterns of realized exit routes in the two groups differed, with financial harvesting
(i.e., acquisitions, IPOs, LBOs) (DeTienne et al., 2015) being over-represented in recent exits (76.9% vs. 57.1%). Therefore, we divided
the sample into two groups (financial harvest vs. other realized exit routes) and performed separate recall bias tests within these two
groups. The t-tests did not reveal any significant differences, suggesting that a recall bias is unlikely.

Table 1
Sample characteristics (Study 2, N = 81).

Variable Minimum Maximum Median Mean Std. deviation

Firm age at exit 1 12 3.0 3.9 2.7

Years since exit 0 10 3.0 4.1 2.8
No. of employees 1 980 15.0 58.3 133.9

Notes: Years since exit calculated as: 2015 – [exit year].

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Table 2
Distribution of realized exit routes in sample (Study 2, N = 81).

Realized exit route Frequency Percentage

Acquisition 44 54.3
Sale to financial investor (leveraged buyout, LBO) 9 11.1
Sale to co-founder 8 9.9
Liquidation 8 9.9
Bankruptcy 6 7.4
Independent sale 4 4.9
Employee/management buyout (MBO) 1 1.2
Initial public offering (IPO) 1 1.2

3.2.2. Exploratory factor analysis

We analyzed the factor structure of our scale in an EFA and verified its internal consistency. With the remaining 26 items (c.f.
Appendix B) and a sample size of 81 respondents, our observations-to-items ratio equals 3.1:1—below the 5:1 rule of thumb (Hair
et al., 2009), but still acceptable (Arrindell and van der Ende, 1985). MacCallum et al. (1999) demonstrate that the impact of sample
size on factor analysis solutions decreases strongly when communalities increase. They propose an average communality of 0.70,
which we meet with 0.73. Moreover, we meet the observations-to-factors ratio of 20:1 (Arrindell and van der Ende, 1985). The
Kaiser-Meyer-Olkin (KMO) criterion is satisfactory at 0.82. The individual measure of sampling adequacy (MSA) is above 0.50, and
Bartlett's test of sphericity is significant (p < .001), indicating that sufficient correlations exist among the variables (Hair et al.,
2009).
In an iterative process, we eliminated items with high cross-loadings or factor loadings lower than the recommended threshold of
0.65 (Hair et al., 2009). We removed ten items due to insignificant factor loadings (Financial 2; Reputation 1, 5, 6, 7, and 8;
Employees 2; Mission 3, and 6) and/or high cross-loadings (Reputation 7; Employees 1). Table 3 shows the 16 remaining items and
their loadings from the EFA. Table 4 presents the factor correlations. The extracted factors have eigenvalues of at least 1.30 and
explain 79.5% of the total variance. Cronbach's alphas for the dimensions range between 0.89 and 0.94 and hence establish internal
consistency (Nunnally, 1978). Item-to-total correlations are higher than the recommended 0.50 (between 0.64 and 0.89), all squared
multiple correlations exceed 0.50, and inter-item correlations are between 0.42 and 0.91, hence above the benchmark of 0.30 (Hair
et al., 2009). This provides strong evidence that the items are reliable and that the dimensions of the PEP construct are internally
consistent. The means and standard deviations (SD) of personal financial benefits (mean = 4.02; SD = 1.72), firm mission persistence
(mean = 4.25; SD = 1.85), employee benefits (mean = 3.88; SD = 1.68), and personal reputation (mean = 4.59; SD = 1.40) show
that all of the four dimensions are relevant for the respondents.

3.2.3. Construct validity

We performed multiple tests to assess the convergent and discriminant validity of the derived factors (Campbell and Fiske, 1959).
Whilst convergent validity describes the degree of convergence of a set of items, discriminant validity assesses whether items which
are intended to measure different latent variables actually do so (Bagozzi and Yi, 2012). As shown in Table 5, construct reliabilities

Table 3
Results of exploratory factor analysis (Study 2, N = 81).

Item Personal financial benefits Firm mission persistence Employee benefits Personal reputation

Financial 5 0.86 −0.03 −0.04 −0.01

Financial 4 0.84 0.06 −0.12 0.14
Financial 1 0.83 0.02 −0.02 0.13
Financial 6 0.77 −0.10 0.10 −0.18
Financial 3 0.66 0.08 0.05 0.01
Mission 2 −0.06 0.99 −0.08 0.09
Mission 1 −0.10 0.96 −0.02 0.10
Mission 5 0.03 0.83 0.06 −0.08
Mission 4 0.15 0.77 0.10 −0.21
Employee 4 0.05 −0.04 0.99 −0.01
Employee 5 0.02 0.14 0.77 0.01
Employee 3 0.08 −0.06 0.73 0.01
Employee 6 −0.16 0.03 0.72 0.10
Reputation 3 0.01 0.02 0.01 0.92
Reputation 2 −0.03 −0.05 −0.01 0.85
Reputation 4 0.06 −0.03 0.12 0.78
Eigenvalue 6.45 2.92 2.05 1.30
Percentage of variance explained 40.34 18.27 12.79 8.15
Cumulative percentage of variance explained 40.34 58.60 71.39 79.54
Cronbach's alpha 0.90 0.94 0.89 0.90

Notes: Extraction method: maximum likelihood. Loadings above 0.30 in bold. Rotation method: Promax with Kaiser normalization. Rotation converged in 5 iterations.

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Table 4
Factor correlations of four-dimensional exploratory factor analysis (Study 2, N = 81).

Factor 1 Factor 2 Factor 3 Factor 4

Factor 1 1.00
Factor 2 0.30 1.00
Factor 3 0.28 0.50 1.00
Factor 4 0.48 0.23 0.42 0.32

Table 5
Construct reliability (CR), average variance extracted (AVE), and inter-correlations (Study 2, N = 81).

Dimension CR AVE 1 2 3 4

1. Personal financial benefits 0.89 0.62 0.78

2. Personal reputation 0.90 0.76 0.56*** 0.87
3. Employee benefits 0.90 0.69 0.32* 0.47*** 0.83
4. Firm mission persistence 0.93 0.78 0.29* 0.26* 0.50*** 0.88

Notes: * = p < .05, *** = p < .001. Values in bold on the diagonal are the square root of the AVE.

(CR) are above 0.70 and the average variance extracted (AVE) of all dimensions exceeds 0.50, suggesting convergent validity (Fornell
and Larcker, 1981; Hair et al., 2009). All items load significantly on the associated factor (p < .001), and average loadings per factor
are above 0.75. Given that the items do not have significant cross-loadings and that the maximum shared variance and the average
shared variance for the four dimensions are below the values for AVE, discrimination among factors is strongly indicated. The
correlations among the factors are below 0.60 and the square roots of AVE exceed the correlations (cf. Table 5). This demonstrates
discriminant validity, indicating that the four dimensions measure unique aspects (Fornell and Larcker, 1981; Hair et al., 2009).

3.3. Study 3: scale validation

3.3.1. Confirmatory factor analysis and construct validity

The purpose of Study 3 is to conduct a CFA and assess construct validity.2 Moreover, we examine criterion validity. As re-
commended, we collected a second sample (in the second half of 2015) to perform these analyses (Hinkin, 2005). We adapted the
questionnaire of Study 2 using the retained items (DeVellis, 2012). Out of 516 individuals, 169 confirmed participation. We applied
the same criteria to the participants as in Study 2. After excluding responses with too many missing values and eliminating cases with
zero employees, we arrived at sample size of 97. We estimated missing values with an expectation-maximization algorithm (Newman,
2003). Comparing the sample's characteristics with those of Study 2 reveals no irregularities (cf. Appendices C and D). The overall
KMO was 0.80, with all individual statistics exceeding 0.68, and a significant Bartlett's test of sphericity (p < .001). With an ob-
servations-to-items ratio of 6.1:1, an average communality above 0.70, and the observations-to-factors ratio above 20:1, the sample
exceeds common thresholds (Arrindell and van der Ende, 1985; Hair et al., 2009; MacCallum et al., 1999).
To confirm the a priori factor structure and assess construct validity, we conducted a CFA by employing structural equation
modeling (SEM) and maximum likelihood procedures with AMOS 23. In line with the theoretical reasoning, the exit performance
does not need to be simultaneously high (or low) across all dimensions. We hence specified each dimension as a reflective construct
(DeVellis, 2012; MacKenzie et al., 2005). We tested different dimensional configurations of the overall PEP construct by comparing
the chi-square to degrees of freedom ratio (χ2/df), the root mean square error of approximation (RMSEA), the standardized root mean
square residual (SRMR), the comparative fit index (CFI), the incremental fit index (IFI), and the Tucker Lewis index (TLI) (Brown,
2015; Hu and Bentler, 1999). We particularly focused on the CFI and IFI, which are least sensitive to sample size (Fan et al., 1999).
We also reviewed the standardized residuals and modification indices to determine potential model misspecifications (Brown, 2015),
and we identified two items that caused issues. The first—Financial 6—refers to the reduction of venture-induced personal financial
risks (e.g., private guarantees for a venture's bank loan). As this item also appeared not to be relevant for several of our interviewees
in Study 1, we deleted it. We also deleted item Employee 6 referring to the inclusion of oral agreements into employee contracts after
the exit. This appears to be less relevant for entrepreneurs as they already might have made such adjustments prior to the exit.
With the remaining 14 items, we compared the four-factor model with two alternative models. In the first model (i.e., row 1 in
Table 6), all items load on a single construct. In the second model, the financial benefits and the reputation items load on a self-
regarding domain, and the employee benefits and the firm mission persistence items load on a pro-social domain. The fit of these two
models is poor, as shown in Table 6. In contrast, the four-factor model (i.e., row 3 in Table 6) has acceptable model fit. It meets the
threshold of 2:1 for χ2/df (Hair et al., 2009). While the RMSEA including the 90% confidence interval (CI) is above the reasonable
cutoff value of 0.08 (MacCallum et al., 1996), the constructs have strong convergent and discriminant validity, which is demonstrated
further below. This suggests that the higher RMSEA can be explained by its sensitivity to small sample sizes (Hu and Bentler, 1999). A

2
We additionally repeated the EFA with the sample of Study 3, which confirmed the four-factor structure.

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Table 6
Global goodness-of-fit indices (Study 3, N = 97).

Dimensionality χ2/df RMSEA (90% CI) SRMR CFI IFI TLI

(1) 1st order: 1 factor; final item set 4.749 0.198 (0.177–0.219) 0.171 0.714 0.719 0.649
(2) 1st order: 2 factors; final item set 2.834 0.138 (0.116–0.161) 0.108 0.862 0.865 0.828
(3) 1st order: 4 factors; final item set 1.652 0.082 (0.054–0.109) 0.049 0.954 0.955 0.939
(4) 1st order: 4 factors; items of Study 2 1.726 0.087 (0.064–0.109) 0.055 0.937 0.939 0.921

Table 7
Construct reliability (CR), average variance extracted (AVE), and inter-correlations (Study 3, N = 97).

Dimension CR AVE 1 2 3 4

1. Personal financial benefits 0.88 0.66 0.81

2. Personal reputation 0.83 0.62 0.46*** 0.79
3. Employee benefits 0.90 0.76 0.37** 0.31** 0.87
4. Firm mission persistence 0.92 0.74 0.44*** 0.32** 0.59*** 0.86
Mean 4.98 4.73 3.45 3.82
Standard deviation (SD) 1.61 1.14 1.68 1.88

Notes: ** = p < .01, *** = p < .001. Values in bold on the diagonal are the square root of the AVE.

Table 8
Final scale: perceived exit performance (PEP).

From today's perspective, how successful was your exit regarding the following aspects?a

Personal financial benefits

Total sales price for shares, e.g., from cash, cash equivalents, tradable shares, earn-out component.
Firm valuation compared to personally perceived value of the venture.
Overall financial result compared to income from alternative employment (instead of founding the venture).
Improvement of standard of living.

Personal reputation
Change in reputation within the start-up community.
Change in reputation with investors.
Change in reputation within industry.

Employee benefits
Promotions/career boosts for core employees.
Cultural fit of employees with new employer.
Acceptance of employees in the new working environment.

Firm mission persistence

Continued pursuance of firm purpose.
Continued existence of the core product/service.
Continued existence of client and supplier relations.
Continued pursuance of firm strategy, e.g., regarding products, customer groups, target markets.

a
All items are measured on a 7-point Likert scale ranging from 1 (not at all successful) to 7 (very successful).

SRMR below 0.08 and CFI, IFI, and TLI values above or close to 0.95 are satisfactory (Brown, 2015; Hu and Bentler, 1999). In
addition, the model shows a better fit compared to the 16-item model that resulted from Study 2 (i.e., row 4 in Table 6).
We then assessed convergent and discriminant validity of our final model (Brown, 2015). As presented in Table 7, construct
reliabilities are above the 0.70 threshold; the AVE exceeded 0.50. All items load significantly on the associated factor (p < .001),
assuring convergent validity. The square roots of AVE are much greater than the corresponding inter-correlations, indicating strong
discrimination between the factors (Fornell and Larcker, 1981). The means and SD of the dimensions show that all of them are
relevant for the respondents (cf. Table 7). Hence, we find strong support that the four reflective dimensions are distinct and measure
relevant aspects of PEP. Using the final PEP scale as displayed in Table 8, scholars should focus on one or on multiple PEP dimensions
that are considered important based on their theoretically derived research questions. Scholars might also be interested in a com-
posite measure, for instance, calculated based on the weighted importance of the four PEP dimensions identified by asking re-
spondents to distribute 100 points across the dimensions (e.g., Sapienza, 1992).

3.3.2. Criterion validity

A novel scale is said to have criterion-related validity if the data support expected associations or differences with other constructs
(Little, 2013). We conducted several analyses demonstrating the validity of the PEP scale among different sub-groups of our sample as
well as across expected relationships with other constructs.

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First, as we would expect that the dimensionality of our final PEP scale does not vary systematically among several sub-groups of
our sample, we repeated the EFA. Taking into account the sample sizes, we merged the samples generated for Studies 2 and 3. We
divided the merged sample (N = 178) into two groups: financial harvest exits (IPOs, acquisitions, LBOs) (N = 118) vs. stewardship
and cessation exits (N = 60). For both groups, results from a repeated EFA clearly confirm the four-factor structure with strong
eigenvalues, cumulative variance explained, and items loadings. As expected, the realized exit route does not influence the scale
specification and sample selection bias is not a concern. Moreover, we investigated exits from the IT/Internet industry (N = 110) vs.
exits from other industries (N = 68). Again, the dimensionality of the scale is confirmed in an EFA in both groups, supporting the
expectation that the scale is robust across different industries. Finally, we added the previously excluded responses of entrepreneurs
who did not have any employees at the time of exit (N = 203) and excluded the employee benefits dimension. As an EFA confirmed
the remaining three factors, the PEP scale is also applicable to ventures without employees.
Second, as we would expect that there are no differences in the factor structure along several splits of the merged sample
(N = 178), we tested the scale for factorial invariance. To assess invariance, we followed Little (2013): We compared the differences
in CFI between an unconstrained baseline CFA model that only includes the four PEP dimensions, the same model but with loadings
constrained to be equal across groups (i.e., weak factorial invariance), and the same model but with intercepts additionally con-
strained to be equal (i.e., strong factorial invariance). A difference in CFI of 0.002 compared to the prior model is a recommended
cutoff for invariance (Meade et al., 2008), while 0.010 is still acceptable (Cheung and Rensvold, 2002; Little, 2013). Across all models
and splits tested, the χ2/df values are 1.587 or below, the RMSEA values are 0.058 or below (90% CIs ranging from 0.029 to 0.072),
and the CFI is at least 0.951, which is satisfactory. The split along financial harvest vs. other exits supports weak (ΔCFI = 0.000) and
strong factorial invariance (ΔCFI = 0.002). Similarly, splits along the median age of the entrepreneurs (weak: ΔCFI = 0.002; strong:
ΔCFI = 0.001), the median number of employees (weak: ΔCFI = 0.000; strong: ΔCFI = 0.001), the median age of the venture at exit
(weak: ΔCFI = 0.005; strong: ΔCFI = 0.003), and the samples of Studies 2 and 3 (weak: ΔCFI = 0.003; strong: ΔCFI = 0.002) support
invariance, which is consistent with our expectations.3
Third, in line with the objective to establish criterion validity, we investigated several relationships between the PEP scale and
other established constructs (DeVellis, 2012; Little, 2013). We focus on (1) venture performance and (2) realized exit routes as
theoretically expected antecedents of certain PEP dimensions. A venture's performance is a major driver of its valuation, which
clearly affects the personal financial benefits of an existing entrepreneur (Block et al., 2014; Dittmann et al., 2004). Hence, we can
expect a positive relationship between venture performance and personal financial benefits. Since well-performing ventures tend to
be well positioned in the market and enjoy promising chances of survival and growth (Delmar et al., 2013; Wennberg and DeTienne,
2014), there is little need for the new owner to change the venture's mission. In contrast, severe restructuring will often happen in
low-performing firms (John et al., 1992). Thus, we expect venture performance to be positively related with perceived firm mission
persistence. However, detailed performance figures of privately owned ventures are generally not publicly available, but are required
to form a solid opinion about entrepreneurs (Dess and Robinson, 1984). Similarly, one cannot per se expect that a new owner of a
well-performing venture will ensure a strong cultural fit or employee acceptance. This results in an ambiguous prediction of the
relationship between venture performance and personal reputation or employee benefits.
To test the expected relationships, we used the sample generated for Study 3 and applied SEM with the four dimensions of PEP as
dependent variables. Fig. 1 illustrates the structural model. As not all respondents provided performance data, the sample size was
reduced to 96 cases. To assess venture performance, we employed self-reported measures (e.g., Wiklund and Shepherd, 2005).
Respondents evaluated their firms' performance one year prior to the exit compared to their competitors regarding revenues, sales
growth, and change in market share (Cronbach's alpha: 0.85) (Chandler and Jansen, 1992).4 We clustered the indicated exit routes
into exit strategies according to DeTienne et al. (2015) (cf. Appendix E) and added a variable to our model that takes the value of 1 for
financial harvest exits (i.e., acquisition, LBO, IPO) and 0 otherwise. We controlled for firm size (i.e., natural logarithm of the number
of employees) and firm age (DeTienne et al., 2015; Wennberg et al., 2010). We had included these variables in the survey of Study 3.
The measurement model fits the data well (χ2/df = 1.521, RMSEA = 0.074 with 90% CI: 0.050–0.096, SRMR = 0.058, CFI = 0.951,
IFI = 0.952, TLI = 0.937). We find that venture performance relates positively to both the personal financial benefits (coeffi-
cient = 0.44, p < .001) and the firm mission persistence dimension (coefficient = 0.46, p < .01). Hence, criterion-related validity
is supported.
Finally, regarding the expected influence of realized exit routes on the PEP dimensions, we expect differences in PEP between
financial harvest exits and other types. In financial harvest exits, entrepreneurs sell their shares to the public or to another firm to
achieve higher financial value (DeTienne et al., 2015). Such entrepreneurs tend to depart from growth-oriented ventures (Brau et al.,
2003) for which firm valuation is of particular importance. As this is a core aspect of personal financial benefits, we expect that, on
average, entrepreneurs choosing a financial harvest exit achieve and, hence, perceive higher personal financial benefits than others

3
In addition to comparing the different models testing weak and strong factorial invariance based on the difference in CFI, we conducted Chi-square difference tests.
The splits along financial harvest vs. other exits (weak: Δχ2 = 9.96, Δdf = 10, p = .44; strong: Δχ2 = 6.83, Δdf = 10, p = .74), the median age of the entrepreneurs
(weak: Δχ2 = 7.92, Δdf = 10, p = .64; strong: Δχ2 = 11.52, Δdf = 10, p = .32), the median number of employees (weak: Δχ2 = 9.74, Δdf = 10, p = .46; strong:
Δχ2 = 8.79, Δdf = 10, p = .55), the median age of the venture at exit (weak: Δχ2 = 19.72, Δdf = 10, p = .04; strong: Δχ2 = 14.89, Δdf = 10, p = .14), and the
samples of Studies 2 and 3 (weak: Δχ2 = 4.19, Δdf = 10, p = .94; strong: Δχ2 = 14.27, Δdf = 10, p = .16) provide support for invariance.
4
We applied several remedies to reduce the risk of a common method bias (Podsakoff et al., 2003). We used validated and concise items, different response formats,
intermixed items, assured anonymity, and emphasized that there are no right or wrong answers. With respect to the realized exit route, we verified data with external
sources. Unrotated principal factor analysis showed that no single factor accounted for the majority of the variance among the items, indicating that common method
bias is not an issue.

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Personal
financial benefits

Venture
performance
Personal
reputation

Employee
benefits
Financial harvest
exit

Firm mission
persistence

Control variables:
Firm age, firm size

Fig. 1. Path diagram with relationships between venture performance, exit routes, and PEP.

do. Additionally, entrepreneurs conducting such exits have public presence since IPOs or acquisitions receive more press coverage
(e.g., Morris and Wells, 2017). In contrast, a sale to co-founders or cessation are rather quiet exit routes. Therefore, we expect that
entrepreneurs exiting with financial harvest strategies achieve and, hence, perceive a better personal reputation. To test our ex-
pectations, we employed the model illustrated in Fig. 1 (excluding the financial harvest exit variable) and the data used to assess the
influence of venture performance (N = 96). We examined differences in PEP dimensions by conducting chi-square difference tests
and comparing the latent means in the four dimensions between two groups (i.e., financial harvest exits vs. other exits), while
constraining their means to be equal. We used two groups as our sample size did not allow us to explore further exit routes. As
expected, the financial harvest exit group has a higher latent mean in the personal financial benefits and the personal reputation
dimension (Δχ2 = 21.9, Δdf = 2, p < .001). In sum, all of the above theoretically consistent results contribute to establishing the
criterion validity of the PEP scale.

4. Additional analyses

To provide first insights into antecedents of PEP and advance research on entrepreneurial exits, we examine whether (1) previous
industry experience and (2) exit planning stimulate PEP. Founders' prior industry experience is a form of specific human capital
(Marvel et al., 2016). First, highly experienced entrepreneurs are able to identify superior business opportunities (Shane, 2000) and
acquire resources (Marvel et al., 2016). Their network helps them identify buyers willing to pay an adequate price. Hence, prior
industry experience should promote personal financial benefits. Second, networks also offer extended experience and support
(DeTienne and Cardon, 2012). This helps entrepreneurs further increase their ability to communicate complex exit situations
(Gimeno et al., 1997), thereby improving their personal reputation. Third, DeTienne and Cardon (2012) find that entrepreneurs with
industry experience tend to sell their firm through a less disruptive employee buyout. This suggests that they place stronger emphasis
on employee well-being in exit negotiations, which should enhance the success they perceive regarding employee benefits. Fourth,
entrepreneurs with industry experience can access their network (Chatterji, 2009), which helps them find the “right” buyer “to
protect the integrity and maintain the business as a whole entity” (DeTienne and Cardon, 2012, p. 362). Hence, such entrepreneurs
are more likely to exit their firm when its core remains intact, which increases the success they perceive regarding firm mission
persistence.
Exit planning helps improve the venture's financial performance prior to an exit, which increases firm valuation (Pratt, 2008).
First, planning is useful to identify potential buyers willing to pay a higher price (Haunschild, 1994). As entrepreneurs generally tend
to overestimate their firm's value (Schultz and Zamanb, 2001), planning might also result in a more objective valuation, which
reduces the risk of perceived underpayment. Hence, exit planning should positively relate to personal financial benefits. Second,
while planning the exit, entrepreneurs can publish relevant information in line with their goals. This lowers the risk of mis-
communication, which, in turn, improves the entrepreneur's perceived reputation. Third, exit planning helps collect information
about buyers to better assess the cultural fit and to negotiate better terms for the employees (Graebner and Eisenhardt, 2004). Thus,
employee benefits will likely increase. Fourth, firm mission persistence strongly depends on the new owner's interests in the firm's
resources. Exit planning helps entrepreneurs assess better which buyer will use these resources best (Graebner and Eisenhardt, 2004).

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This should promote mission persistence.

To test the expected relationships, we merged the samples generated for Studies 2 and 3. We excluded responses where > 10% of
values were missing (Newman, 2003) as well as ventures without employees, which resulted in a sample of 154 cases. We applied
SEM with the four PEP dimensions as dependent variables and exit planning and previous industry experience as independent
variables. We measured industry experience (Cronbach's alpha: 0.87) with four items comparing the similarity between the en-
trepreneur's prior and venture-related environment regarding customers, suppliers, competitors, and products (Chandler, 1996). To
measure exit planning, we asked participants to indicate the degree to which they engaged in five planning activities prior to the exit
(van Teeffelen et al., 2011) (Cronbach's alpha: 0.86).5 We controlled for firm size, firm age, and venture performance (Cronbach's
alpha: 0.86). The CFA yielded good model fit (χ2/df = 1.295, RMSEA = 0.044 with 90% CI: 0.029–0.056, SRMR = 0.053,
CFI = 0.968, IFI = 0.969, TLI = 0.963). We find that exit planning is positively related with personal reputation (coefficient = 0.13,
p < .05) and firm mission persistence (coefficient = 0.20, p < .01). Previous industry experience is positively related with personal
financial benefits (coefficient = 0.15, p < .05), firm mission persistence (coefficient = 0.15, p < .05), and (weakly) with employee
benefits (coefficient = 0.15, p < .10). We discuss these results within the following section.

5. Discussion

5.1. Key findings and contributions

Exits represent a focal topic for both scholars and entrepreneurs. However, there is a lack of theory and measures of its outcomes
for the individual entrepreneur. This is surprising, given that such exits are eventually inescapable for every founder-manager en-
trepreneur and are of central concern to them (Wennberg and DeTienne, 2014). By offering a powerful framework capturing en-
trepreneurs' PEP, this study contributes in several ways to research on entrepreneurial exit and on entrepreneurship at large.
Our study extends theory on entrepreneurial exit with a conceptualization of the outcome of the exit event from the entrepreneurs'
perspective. Drawing on and complementing entrepreneurship literature, we introduce a theoretical framework for the construct of
PEP that captures how entrepreneurs perceive their exits, as demanded by DeTienne (2010). Earlier research, in contrast, has focused
on developing theory around decisions, processes, or intentions leading to the exit or around exit routes, business closure, failure, and
subsequent activities (Wennberg and DeTienne, 2014). Our theoretically derived conceptualization of PEP enhances our under-
standing of entrepreneurial exits as it reflects the individuals' perceptions based on four dimensions: personal financial benefits,
personal reputation, employee benefits, and firm mission persistence. These dimensions cover a variety of aspects, thereby allowing
for a fine-grained explanation of the perceived outcome of an exit event. The personal financial benefits dimension also includes
factors accounting for what is commonly referred to as “objective” variance in the exit outcome (e.g., sales price for shares, va-
luation). Our conceptualization covers this variance in entrepreneurs' perceptions of how successful or unsuccessful the exit was, and
it draws on rather objective criteria from the entrepreneurs' perspective. Broader entrepreneurship literature and research further-
more strives to comprehend phenomena from the individual's point of view (Sarasvathy, 2004; Venkataraman, 1997). This study
contributes to this goal by advancing our understanding of a pivotal entrepreneurial phenomenon—exit events—that might represent
the end or starting point of an individual's entrepreneurial activity. With this, we also intend to increase academic attention to this
topic.
By providing a validated scale in terms of empirical applicability, this study methodologically adds to entrepreneurship research.
The new scale for measuring PEP consists of overall 14 items, making it conveniently applicable to survey-based research. Earlier
works draw on financial or categorical measures when differentiating successful from unsuccessful exits (Lee and Lee, 2014; Marvel
et al., 2016; van Teeffelen and Uhlaner, 2013). Future studies using our scale might substantially advance research on the entire
entrepreneurial process. We also show that our scale is applicable to different types of entrepreneurs, ventures, and exit routes.
Hence, the scale allows for a granular examination of an exit's outcome across a variety of contexts. Finally, it is noteworthy that the
PEP scale does not necessarily need to be answered by the exiting entrepreneur him- or herself given that the scale includes more
social than psychological aspects.6 This allows future studies to approach not only the focal entrepreneur, but also his or her sta-
keholders (e.g., investors, partners, employees) as respondents who rate the entrepreneur on the PEP scale.
This study further contributes to the debate within the literature on entrepreneurial exits that aims to differentiate successful from
unsuccessful ones (e.g., DeTienne et al., 2015). To the best of our knowledge, the proposed theoretical framework and measurement
instrument of PEP is the first to assess exits based on the individual entrepreneur's perspective and not only on publicly observable
phenomena. This will enable scholars striving to extend and test related theories to delineate between the perceived levels of exit
success based on four distinct dimensions relevant to entrepreneurs. This is important, given that extant research is largely restricted
to financial outcomes or other observable characteristics, labeling, for instance, acquisitions as success (e.g., Lee and Lee, 2014).
Our study further advances the entrepreneurship literature and related domains by opening up several areas for future study.
First, our measure allows advancing theory on consequences of successful and unsuccessful exits. These outcomes can affect, for
instance, an entrepreneur's future career path or the potential acquirer. Second, it would be highly interesting to explore antecedents
of exits perceived as being successful or unsuccessful. Drivers of perceived success are rooted in the individual entrepreneur, on the

5
The five planning activities include: “I made a profile of potential buyers;” “I made a valuation of my business;” “I improved my business in preparation for the
exit;” “I compiled relevant documents for the exit (“sales memorandum”);” “I evaluated strengths/weaknesses and opportunities/threats of my business.”
6
We thank an anonymous reviewer for pointing this out.

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S. Strese et al. Journal of Business Venturing xxx (xxxx) xxx–xxx

organizational or team level, or in the environment interacting with the venture. Expanding research on entrepreneurial exit, this
study offers first empirical evidence on antecedents of PEP. We find that entrepreneurs who thoroughly plan their exit (e.g., by
examining potential buyers) perceive a better personal reputation and firm mission persistence. Yet, planning does not seem to help
them promote the financial and employee benefits dimensions of PEP. On the one hand, this might indicate that for those dimensions,
an effectual approach is more relevant than a causal approach (Sarasvathy, 2001). On the other hand, these results also reinforce our
theoretical reasoning that a unidimensional measurement of PEP does not capture the various aspects relevant to entrepreneurs. We
also show that entrepreneurs' previous industry experience positively relates to three out of four PEP dimensions (i.e., personal
financial benefits, firm mission persistence, and, weakly, employee benefits). As such specific human capital is known to influence the
quality of the identified entrepreneurial opportunity and its exploitation (Ucbasaran et al., 2008), one would expect that the re-
lationships identified in this study are likely mediated by those two variables. Our results thus encourage further work on the
association of PEP with other concepts to advance extant theory.

5.2. Avenues for future research

This study opens up new and diverse research avenues. It would be particularly interesting to explore further the link between
individual-level characteristics of the entrepreneur and PEP. On the one hand, more deep-level characteristics such as social identities
(Sieger et al., 2016), entrepreneurial passion (Cardon et al., 2013), or egoistic vs. altruistic values (Hernandez, 2012) shape the way
entrepreneurs think and act along the entrepreneurial process. There might also be differences in how male and female entrepreneurs
perceive an exit. Scholars might be interested in analyzing whether and how such characteristics explain heterogeneity in the per-
ception of the exit. On the other hand, this study provides first evidence on the influence of specific human capital on PEP (i.e., prior
industry experience). However, other types of human capital may play a different role (DeTienne and Cardon, 2012; Marvel et al.,
2016) and/or may explain mediating effects which future research could explore. This raises the question whether an exit is such a
unique experience that it rather depends on deep-level personality characteristics.
Scholars could also investigate how entrepreneurs can actively promote their PEP and thus try to identify drivers of successful and
unsuccessful exits. For instance, would it make a difference if entrepreneurs involved external advisors to prepare their firm for the
exit, for example, from a labor or tax law perspective? This study does offer empirical evidence on selected positive influences of exit
planning; however, planning might also pose an obstacle. Future research should thus examine differences among causal and ef-
fectual approaches (Sarasvathy, 2001) and entrepreneurs' PEP. Moreover, founders' networks strongly influence the success in all
stages of the entrepreneurial process (Hoang and Antoncic, 2003; Stuart and Sorenson, 2007) because networks provide access to
resources and/or knowledge (Partanen et al., 2014). Hence, network characteristics such as range, intensity, or structural holes likely
influence PEP and should be explored by future research. According to social capital theory (Granovetter, 1973), the effects on
different PEP dimensions might be versatile: Networks may offer an enlarged experience base, helping entrepreneurs pursue a more
satisfactory exit on some dimensions. Access to resources within the network may help entrepreneurs support others. Our concept
also establishes a link between the literature on investor involvement and entrepreneurial exit (Collewaert, 2012). Future studies
could, for instance, investigate which investor resources (e.g., financial means, experience) provide the most value to specific PEP
dimensions and how conflicts prior to the exit influence the PEP.
The PEP scale will also help examine organizational antecedents. For instance, different business model designs affect firm
performance depending on the lifecycle stage (Brettel et al., 2012). Thus, scholars could explore whether specific business models are
particularly beneficial for certain PEP dimensions. Moreover, a venture's human capital is considered a valuable asset (Hatch and
Dyer, 2004) and might hence influence (several or all) PEP dimensions. Similarly, a venture's organizational and social capital might
help explain heterogeneity in PEP. Finally, it would be worthwhile to examine PEP and its drivers within entrepreneurial teams, as
team compositions can be heterogeneous (Ucbasaran et al., 2003). Simulation experiments with student teams in a venture project
might be a useful approach.
Future research also needs to examine consequences of PEP. First, scholars should investigate exit outcomes over time with regard
to the entrepreneur's future career path. Our scale can also help advance theory on serial entrepreneurship, which has not yet deeply
explored what precisely distinguishes serial from one-time entrepreneurs. Spivack et al. (2014) argue that factors during the venture
creation process might have an impact. Future research could thus explore whether the emergence of serial entrepreneurship depends
on some or on all PEP dimensions. Second, in the case of an acquisition, longitudinal outcomes for the acquirer need to be explored.
Firm relatedness has been considered a determinant for a variety of success outcomes in M&A (e.g., Larsson and Finkelstein, 1999).
However, how do exits perceived as successful influence the acquirer's long-term performance in the case of similar or com-
plementary firms? Do, for instance, higher perceived employee benefits result in a stronger performance of the integrated employees?
Do outcomes for the acquirer vary depending on the success of exits at different venture ages? In sum, our conceptualization offers
various opportunities to advance theory on exits.

5.3. Limitations and conclusion

There are several limitations to this study. First, we collected our data from German, Austrian, and Swiss ventures. We are
confident that the PEP construct holds for other cultures as we included international studies in our theory. Nevertheless, future
works should replicate our approach in different cultural contexts. Second, our study draws on two samples with 203 responses. Still,
the sample size of our second study is rather small, given that sampling in exit research is challenging (van Teeffelen and Uhlaner,
2013; Wasserman, 2003). Albeit we find good evidence that concerns about our sample size are unwarranted, there might be stability

13
S. Strese et al. Journal of Business Venturing xxx (xxxx) xxx–xxx

issues. Our sample furthermore did not allow us to investigate differences among further types of entrepreneurs, ventures, or detailed
exit routes. For instance, the PEP dimensions might be of different importance to equally financially successful male and female
entrepreneurs, which would be worthwhile to examine. We furthermore included exits as of 2005. Although our tests did not reveal
any issues, a recall bias might still be present. Hence, we encourage researchers to replicate our study with assessments at a constant
time after the exit and over a longer period to reveal potential shifts in perception over time.
We are aware there might be other aspects that individuals perceive as important when assessing their exit. For instance, en-
trepreneurs might focus on how much they have learned from their exit. However, we did not find any support for such an aspect
during the 29 interviews we conducted. Moreover, while generating some psychological benefits from entrepreneurship might play a
role, we only found weak evidence for this as this issue decreases in importance in the later stages of the entrepreneurial process, such
as the exit (Cassar, 2007). However, an investigation exclusively focusing on the psychological domain might discover aspects that
relate more closely to the individual personality or character of entrepreneurs than the aspects of our PEP construct.
Concluding, we believe that the conceptualization of PEP introduced in this study provides an important starting point for future
research. With the individual entrepreneur's perspective, the recognition of an exit as a potentially successful outcome, and the
multiple dimensions, our PEP construct reflects entrepreneurs' reality. We encourage further research on PEP, which will yield
insights not only for theory, but also for entrepreneurs, investors, and institutional decision makers.

Acknowledgements

We are grateful to the field editor Karl Wennberg and the three anonymous reviewers who challenged us and considerably helped
us improve this paper throughout the review process.

Appendix A
Selected publications with relevance for the dimensions of perceived exit performance (PEP)a.

Self-regarding aims Collectivistic aims

Publication Summary Personal Personal Employee Firm mission Other aspects

(literature financial reputation benefits persistence
stream) benefits

Kolvereid The author develops a Economic Social Security

(1996) classification scheme for opportunity environment Authority
(creating career choices based on Career Autonomy
a eleven decision dimensions. Work load
venture) Participate in
the whole
process
Avoid
responsibility
Challenge
Self-
realization
Amit et al. Based on 79 interviews with Wealth Ego Vision Stability
(2001) entrepreneurs and senior Innovation Power
(creating managers, the authors Contribution Lifestyle
a evaluate the importance of Leadership
venture) money compared to other Independence
motivation dimensions to Challenge
start a high-technology
venture.
Shane et al. Based on previous research Vision Locus of
(2003) on entrepreneurial Passion control
(creating motivation, the authors Desire for
a propose a research model independence
venture) for the role of human Drive
motivations in the Goal setting
entrepreneurial process. Self-efficacy
Need for
achievement
Carter et al. The authors compare the Financial Recognition Innovation Independence
(2003) career reasons of nascent success Roles

14
S. Strese et al. Journal of Business Venturing xxx (xxxx) xxx–xxx

(creating entrepreneurs and non- Self-

a entrepreneurs. realization
venture)
Fauchart and The authors develop a Make money Advance community
Gruber typology of founder and build Pursue a political
(2011) identities. They develop own financial vision or a cause
(creating three types of basic social wealth
a motivation.
venture)
Dunkelberg The authors examine the Make money Build successful Avoid
et al. influence of entrepreneurs' organizations working for
(2013) goals on the personal others
(creating resource allocation toward Do work sb.
a their venture. Likes to do
venture)
Douglas Building on individuals' Work- Autonomy
(2013) basic needs from self- enjoyment Self-efficacy
(creating determination theory, the
a author develops a measure
venture) to identify entrepreneurs
predisposed for growth.
Davidsson The author analyzes the Financial Employee well- Stability/crisis Workload
(1989) influence of expected outcome being, survival ability Work-tasks
(growing outcomes of growth on the “atmosphere” Quality of products Control
a willingness to grow among and services Independence
venture) Swedish small business
owners.
Wiklund The authors investigate how
et al. the growth attitude of
(2003) business owners is
(growing influenced by their beliefs
a about consequences of
venture) growth in eight economic
and non-economic areas.
Kolvereid Using a sample of Taxes Status Achievement of Independence
(1992) Norwegian entrepreneurs, Welfare product Opportunity
(growing the author examines the development and Follow role
a relationship between innovation models
venture) motives to start the
business, firm and
entrepreneurial
characteristics, and growth
aspirations.
Morris et al. The authors investigate the Desire to be Relationship Fulfillment Happiness
(2006) differences in growth rich More building Satisfaction
(growing aspirations between high profits Challenge
a growth and moderate Prove self
venture) growth female
entrepreneurs, among
others based on motivations
for growth.
Cassar In longitudinal study, the Financial Recognition Innovation Independence
(2007) authors analyze the success Roles
(growing relationship between Self-
a entrepreneur's career realization
venture) reasons, growth intentions,
and achieved growth, as
well as changes in the
importance of career
reasons over time.

15
S. Strese et al. Journal of Business Venturing xxx (xxxx) xxx–xxx

Hessels et al. The authors investigate Increase Independence

(2008) socioeconomic variables wealth Necessity
(growing and entrepreneurial
a motivations and aspirations.
venture)
Graebner The authors explore the role Financial Reputation Organizational Combination
and of target firms' leaders in gain rapport potential
Eisenhar- acquisitions based on 12 Employee
dt (2004) case studies and derive welfare
(selling a aspects influencing the exit
venture) decision.
Mason and Based on case studies of Financial Reputation Ensure good Support future Workload
Harrison Scottish firms acquired by independence among careers of expansion and reduction
(2006) non-UK companies, the investors employees business growth
(selling a authors shed light on the Employee Build long-term
venture) post-acquisition behavior of financial sustainable business
the entrepreneurs. participation
Dalziel The author analyzes the Financial Financial Social criteria Strategic criteria
(2008) seller's perception of success criteria (i.e., criteria (i.e., (i.e., benefits (i.e., impact on
(selling a in acquisitions, based on toward toward for employees) strategic initiatives)
venture) several success criteria. entrepreneur) investors) Social criteria (i.e.,
benefits for
customers)
DeTienne In a fundamental theoretical Harvested Quality of exit Quality of exit (e.g., Speed of exit
(2010) development, the author value (e.g., confirmation that
(selling a demonstrates the confirmation firm continues)
venture) importance of that employees
entrepreneurial exit and be retained)
outlines research topics.
Graebner In a review, the authors Financial Cultural fit for Autonomy from
et al. examine the differences gain employees acquiring firm
(2010) among sellers and buyers in Success of own
(selling a acquisitions with respect to technology
venture) motivations, challenges,
and acquisition
assessments.
Lee and Lee The authors analyze the Financial Continued usage of
(2014) influence of entrepreneur's harvest innovations
(selling a characteristics on the
venture) realized exit route.
a
The publications are ordered along the entrepreneurial process (i.e., creating, growing, and selling a venture).

Appendix B
Full item list and main reasons for item elimination.

Items: From today's perspective, how successful was your exit regarding the following Item Main reason for elimination
aspects? identifier

Total sales price for shares, e.g., from cash, cash equivalents, tradable shares, earn- Financial 1
out component
Total salary and other withdrawals before exit Financial 2 Low factor loading (Study 2)
Firm valuation compared to personally perceived value of the venture Financial 3
Overall financial result compared to income from alternative employment (instead of Financial 4
founding venture)
Improvement of standard of living Financial 5
Reduction of venture-induced personal financial risks (e.g., private guarantees for Financial 6 Low factor loading (Study 3)
venture's bank loans)
Change in reputation with family and friends Reputation Low factor loading (Study 2)
1

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S. Strese et al. Journal of Business Venturing xxx (xxxx) xxx–xxx

Change in reputation within the start-up community Reputation

2
Change in reputation with investors Reputation
3
Change in reputation within industry Reputation
4
Change in reputation in the general public Reputation Low factor loading (Study 2)
5
Reputational gains from fame/prestige of buyer Reputation Low factor loading (Study 2)
6
Emergence of good job/project offers after the exit Reputation Low factor loading (Study 2)
7
General coverage in the media Reputation Low factor loading (Study 2)
8
Retainment of employees Employees High cross-loading (Study 2)
1
Financial benefits for core employees (e.g., by monetization of shares/ESOP, salary Employees Low factor loading (Study 2)
increases) 2
Promotions/career boosts for core employees Employees
3
Cultural fit of employees with new employer Employees
4
Acceptance of employees in the new working environment Employees
5
Clearance of contracts with employees (e.g., inclusion of previously oral agreements Employees Improvement of model fit
in contracts) 6 (Study 3)
Continued pursuance of firm purpose Mission 1
Continued existence of the core product/service Mission 2
Continued existence of the values of the firm Mission 3 Low factor loading (Study 2)
Continued existence of client and supplier relations Mission 4
Continued pursuance of firm strategy, e.g., regarding products, customer groups, Mission 5
target markets
Professionalization of contractual relationships (e.g., with suppliers, customers, other Mission 6 Low factor loading (Study 2)
business partners)

Appendix C
Sample characteristics (Study 3, N = 97).

Variable Minimum Maximum Median Mean Std. deviation

Firm age at exit 0 12 3.0 4.3 3.0

Years since exit 0 9 3.0 3.4 2.4
No. of employees 1 480 10.0 28.8 62.7
Notes: Years since exit calculated as: 2015 – [exit year].

Appendix D
Distribution of realized exit routes in sample (Study 3, N = 97).

Realized exit route Frequency Percentage

Acquisition 58 59.8
Sale to financial investor (LBO) 6 6.2
Sale to co-founder 11 11.3
Liquidation 9 9.3
Bankruptcy 8 8.2
Independent sale 2 2.1
Employee/management buyout (MBO) 3 3.1

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S. Strese et al. Journal of Business Venturing xxx (xxxx) xxx–xxx

Appendix E
Clustering of exit routes.

Exit route Cluster

Acquisition Financial harvest

Sale to financial investor (LBO)
Initial public offering (IPO)
Sale to co-founder Stewardship
Independent sale
Employee/management buyout (MBO)
Liquidation Cessation
Bankruptcy
Notes: The third cluster was originally called “voluntary cessation” (DeTienne et al., 2015), which we
renamed into “cessation” as it also includes bankruptcies.

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