Exit, stage left why entrepreneurs end their entrepreneurial careers before retirement

Abstract This article examines the process of entrepreneurship from a different perspective. It considers evidence not only about practicing entrepreneurs but also about ex-entrepreneurs: individuals who have ended their entrepreneurial pursuits to work for someone else. Why entrepreneurs ended their entrepreneurial careers is understood by examining not only their expressed reasons for leaving, but also by observing how they exited, when they exited, and who exited compared to who remained. The study's findings are tentative. They are published now because they have important implications for potential entrepreneurs, for practicing entrepreneurs, and for those working with entrepreneurs either directly or indirectly (e.g., policymakers) who must make important decisions before more evidence is available .Overall, the findings indicate that a high-risk profile exists that distinguishes ex-entrepreneurs, particularly those with brief careers, from “more seasoned” entrepreneurs who have experienced longer lives as entrepreneurs. Perhaps the most important implication is that early-career start-ups may be better than previously thought. Preexisting profiles of the “ideal entrepreneurs” place them in their mid- to late thirties at the time of venture start up. But this start-up age (and older ages) were highly correlated in this study with very short, aborted careers compared to practicing entrepreneurs and ex-entrepreneurs who started earlier. A second implication is related to the first: those who started earlier were able to do a better job of anticipating their future entrepreneurial pursuits than were those who started later, mainly because they were sensitized to entrepreneurship as a career possibility at a much earlier age. Early planning for an entrepreneurial career is correlated with longer careers not just because they start earlier but because they last longer. A third implication is the need to scale down the scope (and risk) of the first venture. Such venture “downsizing” can lessen financial requirements while also giving new entrepreneurs the flexibility to start another, often better, venture after they get into business and learn about new opportunities, contacts, and skills that they could not foresee or develop before starting their first ventures. A fourth implication reinforces existing notions about the relative perils of the first few years of an entrepreneurial career. Survival rates increase considerably after the completion of the second year and the probability of a long career rises substantially after the sixth year of entrepreneurial life. A final implication is that the overall costs, risks, and dangers of entrepreneuring have been overstated. Career exit rates are much lower than venture exit rates. Relatively few ex-entrepreneurs apparently suffered truly catastrophic career exits, at least to the extent that they felt that their careers had been very unrewarding and that they had ruled out ever entrepreneuring again.