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Investor Exits, Innovation, and Entrepreneurial Firm Growth Questions for Research: Summary of a Workshop (2009) / Chapter Skim
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3 What Are the Challenges and Hurdles to Research?
Pages 13-16

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From page 13...
... In addition to the difficulty of distinguishing trend from cycle in the IPO versus acquisition time series, these considerations include the role of technology and industry differences and changes in these characteristics over time; the importance of considering "demand" as well as "supply" side factors; the difficulty of determining causal linkages, especially when moving beyond innovation effects to implications for job creation, productivity, and economic growth; and finally, the difficulty of discerning policy influences, not only from other factors but also from one policy instrument to another. ACCOUNTING FOR TECHNOLOGY AND SECTORAL DIFFERENCES IPO exits are not uniformly pro- and acquisition exits uniformly antiinnovation.
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From page 14...
... Thus, following a few early independent commercial successes in Internet applications, it could be expected that acquisitions would dominate in information technology during this period rather than IPOs. The drug discovery and development field exhibits other, perhaps more permanent, characteristics that favor acquisition over going public, according to David Morgenthaler of Morgenthaler Ventures, Leighton Read of Alloy Ventures, and Ed Penhoet of Alta Partners.
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From page 15...
... Arms length investors in public firms need information about those firms to make informed investment decisions. In 2003, the Securities and Exchange Commission, New York Stock Exchange, National Association of Securities Dealers, and New York Attorney General Eliot Spitzer reached a litigation settlement forcing the largest securities firms to insulate their research and investment banking operations to reduce conflicts of interest.
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From page 16...
... Others, however, considered changes in transaction costs a prime area for study. DIFFICULTY OF ESTABLISHING CAUSAL LINKAGES GENERALLY Having considered the cyclical versus secular or structural changes in patterns of investor exits from young entrepreneurial firms and the difficulty of establishing the causes of such changes, several workshop participants expressed the opinion that the most challenging research task, and one critical to bringing about any public policy changes, would be to link exit patterns to macroeconomic effects such as job creation, productivity advances, economic growth, and competitiveness or to stagnation or under-performance in any of those measures of economic performance.
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Key Terms

  • entrepreneurial firms
  • public company
  • investor exits
  • entrepreneurial firm
  • policy influences

  • public companies
  • exit strategy
  • david morgenthaler
  • publicly traded
  • traded firms

  • causal linkages
  • job creation
  • pharmaceutical houses
  • company public
  • investor exit

  • entrepreneurial biopharmaceutical
  • policy instrument
  • ipo exits
  • attractive exit
  • ipo versus

  • contemporary policy
  • entrepreneurial growth
  • discerning policy
  • pharmaceutical companies
  • spitzer reached

  • regarding reimbursement
  • compliance costs
  • chief financial
  • disproportionately raised
  • industry differences


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