View article

Acquisition is a central way through which founders exit the ventures they created, especially for founders who choose to stay with their companies after their Initial Public Offerings (IPOs). However, founders are often psychologically attached to their firms and face a substantial dilemma over when to consider their economic interests and exit the firm. We explore the factors that drive the timing of founders’ decisions with respect to choosing between exiting via acquisition or remaining in control of their firms. Drawing from the psychological ownership literature, we theorize that factors such as social identities, investment of technical specialized knowledge, serial entrepreneur status and having outside employment influence the length of time until acquisition. Further, we examine how acquisition premiums influence this timing. Our results have implications for the literature on the seller perspective in acquisition deals …