Global expert in Entrepreneurship , Professor Dawn DeTienne will give a public talk on the issue onTHURSDAY 14th 1700-1900 Synge Theatre, Arts Building, TCD.
When Entrepreneurship leads to Acquisitions: Entrepreneurial Recycling or Acquisition Risk?
Start-up ventures play an important role in the economy as these firms translate scientific knowledge into commercial products, develop and diffuse innovation, increase employment and tax base, and increase the overall standard of living in a local economy. Thus, policy makers seek to increase the number, and viability, of start-ups by providing incentives such as access to funding, start-up support, technology grants, infrastructure incentives, and tax breaks. However, these start-ups are often acquired by larger established firms who have the resources to bring innovation to the marketplace. In large countries with vibrant acquisition markets and venture capital resources this process of “start-up to acquisition” is viewed quite positively; however, for smaller countries such as Ireland, acquisitions are most often cross-border acquisitions.
In a study of acquisitions in the Irish software sector 81% were cross-border acquisitions.
Thus the concern is that the investment by policy makers may be lost. Alternately, acquisitions may results in a process of entrepreneurial recycling–wherein “successful cashed out entrepreneurs reinvest their time, money and expertise in supporting new entrepreneurial activity” . That is, acquisitions can result in new venture creation, new venture funding (through angel and venture capital), ongoing mentoring and advisers, and can boost the economy by releasing underutilized resources (e.g. people or knowledge) back into the ecosystem.
These results lead to several questions that we will discuss during the presentation:
(1) Do policy makers adequately compensate for acquisition risk—the risk that successful technology start-ups will be acquired and the support provided by the incentivizing entity lost?
(2) Are there policies that could be implemented to promote in-country acquisitions? What role might the equity and IPO markets play? What kind of support might policy makers play in this area?
(3) How can policy makers determine whether acquisitions lead to entrepreneurial recycling and whether entrepreneurial recycling compensates for initial incentives?
Dawn DeTienne is Professor of Entrepreneurship at Colorado State University. Her research, teaching, service, and background are all grounded in entrepreneurship. DeTienne’s research focuses upon entrepreneurial exit, family business, and gender and has appeared in Academy of Management Learning & Education, Journal of Business Venturing, Entrepreneurship Theory & Practice, and Small Business Economics. Her work has been cited over 2700 times in academic articles. She teaches entrepreneurship courses exclusively and in 2011 was awarded the Colorado State University Excellence in Teaching Award and in 2015 the Transformer Award.
She serves as Faculty Director for the Institute for Entrepreneurship and serves on the editorial boards of several major entrepreneurship journals. DeTienne is the Visiting Professor at the Haydn Greene Institute at the University of Nottingham. Prior to pursuing her Ph.D., she co-founded and co-owned several ventures and successfully exited (through acquisition) an entrepreneurial venture. She currently serves as an advisor to several small business ventures.