3 Factors Influencing Financial Backers’ Exit Decisions from a New Venture
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Abstract
The extant literature is more vocal about the exit routes, the success of specific exit route and impacts various variables on the choice and success of exit routes. The current research has made an attempt to identify the determinants of a profitable exit strategy from the perspective of financial backers for which the previous research has not provided sufficient evidence. A structured questionnaire was developed after a critical review of extant literature. The researchers applied exploratory factor analysis (EFA) based on 306 respondents to determine the latent factors or determinants of an exit strategy. Once the factors are explored and labelled, a fresh sample (339 respondents) was used to validate the scale developed through EFA. And thus, a path model was developed to study the causal relationship between determinants of exit strategy and its profitability. The path model was further tested for mediated and direct/indirect effect of triggers of an exit strategy on the profitability of exit was tested. The findings of the study are useful for financial backers and startups both as suggested factors that could be used by these financiers for the successful exit from the startups. The constituents of the exit strategy of outsized funding organisations like VC, PE firms, and banks/financial institutions/NBFCs, might not befit other financial backers addressed in the present study. It is the major contribution of study under consideration as it has divulged that the financial backers of new ventures consider six determinants explored by the current study.
Abstract
The extant literature is more vocal about the exit routes, the success of specific exit route and impacts various variables on the choice and success of exit routes. The current research has made an attempt to identify the determinants of a profitable exit strategy from the perspective of financial backers for which the previous research has not provided sufficient evidence. A structured questionnaire was developed after a critical review of extant literature. The researchers applied exploratory factor analysis (EFA) based on 306 respondents to determine the latent factors or determinants of an exit strategy. Once the factors are explored and labelled, a fresh sample (339 respondents) was used to validate the scale developed through EFA. And thus, a path model was developed to study the causal relationship between determinants of exit strategy and its profitability. The path model was further tested for mediated and direct/indirect effect of triggers of an exit strategy on the profitability of exit was tested. The findings of the study are useful for financial backers and startups both as suggested factors that could be used by these financiers for the successful exit from the startups. The constituents of the exit strategy of outsized funding organisations like VC, PE firms, and banks/financial institutions/NBFCs, might not befit other financial backers addressed in the present study. It is the major contribution of study under consideration as it has divulged that the financial backers of new ventures consider six determinants explored by the current study.
Chapters in this book
- Frontmatter I
- Preface V
- Contents VII
- Introduction IX
- 1 Enhancing SMEs’ Sustainability Through Innovative Practices 1
- 2 The Approach of SMEs Towards Green Management Practices 17
- 3 Factors Influencing Financial Backers’ Exit Decisions from a New Venture 33
- 4 Technological Advancement in Industrial Revolution 4.0 for Sustainable Development of India: Understanding Linkages in Theory and Practice 57
- 5 Impact of Macroeconomic Determinants and Corporate Attributes on Firms’ Financial Success in India 73
- 6 Exploring Individual Investor Intentions Towards Socially Responsible Investment 95
- 7 Ownership Structures and Performance of SMEs: An Empirical Analysis 119
- 8 Short-Run Pricing Performance of Selected Indian IPOs During COVID-19 for Alternative Investment Avenue 141
- 9 Emerging Green: Exploring Strategic Factors for SMEs’ Adoption of Green Technology and Innovation in India 165
- 10 Impact of Sustainability and Green Finance on SMEs to Promote Green Growth 187
- 11 Progress Intention and Sales Revenue Growth in Micro, Small and Medium Enterprises (SMEs) 199
- 12 Green Management Practices by Small and Medium Enterprises 211
- 13 An Analysis of MSMEs’ Contributions to the Promotion of SDGs in India 227
- 14 Impact of Innovation and Its Role in Small Medium Enterprises’ Sustainability 247
- 15 Effect of Government Policies on SME Innovation and Entrepreneurship 267
- 16 A Study on Various Aspects of SMEs’ Orientation for Corporate Social Responsibility 285
- 17 SME and Environmental Sustenance: Digital Marketing in SMEs via Data- Driven Strategies 315
- List of Contributors 333
- About the Editors 339
- List of Tables 341
- List of Figures 343
- Index 345
Chapters in this book
- Frontmatter I
- Preface V
- Contents VII
- Introduction IX
- 1 Enhancing SMEs’ Sustainability Through Innovative Practices 1
- 2 The Approach of SMEs Towards Green Management Practices 17
- 3 Factors Influencing Financial Backers’ Exit Decisions from a New Venture 33
- 4 Technological Advancement in Industrial Revolution 4.0 for Sustainable Development of India: Understanding Linkages in Theory and Practice 57
- 5 Impact of Macroeconomic Determinants and Corporate Attributes on Firms’ Financial Success in India 73
- 6 Exploring Individual Investor Intentions Towards Socially Responsible Investment 95
- 7 Ownership Structures and Performance of SMEs: An Empirical Analysis 119
- 8 Short-Run Pricing Performance of Selected Indian IPOs During COVID-19 for Alternative Investment Avenue 141
- 9 Emerging Green: Exploring Strategic Factors for SMEs’ Adoption of Green Technology and Innovation in India 165
- 10 Impact of Sustainability and Green Finance on SMEs to Promote Green Growth 187
- 11 Progress Intention and Sales Revenue Growth in Micro, Small and Medium Enterprises (SMEs) 199
- 12 Green Management Practices by Small and Medium Enterprises 211
- 13 An Analysis of MSMEs’ Contributions to the Promotion of SDGs in India 227
- 14 Impact of Innovation and Its Role in Small Medium Enterprises’ Sustainability 247
- 15 Effect of Government Policies on SME Innovation and Entrepreneurship 267
- 16 A Study on Various Aspects of SMEs’ Orientation for Corporate Social Responsibility 285
- 17 SME and Environmental Sustenance: Digital Marketing in SMEs via Data- Driven Strategies 315
- List of Contributors 333
- About the Editors 339
- List of Tables 341
- List of Figures 343
- Index 345
