Title: The technological traits of invention and the exit of high-tech start-ups

Authors: Congshan Li

Addresses: School of Management, Xiamen University, Xiamen, Fujian Province, China

Abstract: Exit, whether through an IPO or acquisition, is the goal for the majority of high-tech start-ups, but its probability is low. We theorise that the technological novelty of a start-up's invention increases the cost of exit and the commercialisation risk, hence having a negative effect on its exit probability. We study this empirically for a sample of healthcare start-ups using a refined method for measuring technological novelty. The empirical findings support our hypothesis and demonstrate that novelty has a negative effect on the chance of exit, which is more pronounced for acquisitions than for IPOs. In addition, the empirical findings indicate that conventionality positively moderates the association for both acquisition and IPO, but scientific knowledge origin moderates primarily acquisition.

Keywords: technological novelty; high-tech start-ups; exit; IPO; acquisition.

DOI: 10.1504/IJTM.2024.135234

International Journal of Technology Management, 2024 Vol.94 No.1, pp.79 - 102

Received: 26 Dec 2021
Received in revised form: 14 Sep 2022
Accepted: 16 Sep 2022
Published online: 03 Dec 2023 *

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