Research pick: Should I stay or should I go? The entrepreneurial clash - "Should I stay or leave? The role of human, financial and social capital in entrepreneurial exit"

Received wisdom suggests that business closure equates to business failure. However, research in the International Journal of Entrepreneurial Venturing has challenged this assumption, suggesting that entrepreneurial exit is frequently a deliberate, strategic decision, particularly among those with the greatest resources at their disposal.

The researchers drew on data from more than 28000 individuals across 48 countries via the Global Entrepreneurship Monitor. Their work shifts the focus from the beginnings and growth of startups to their ends and attempts to answer a question that is rarely addressed in business research: why do entrepreneurs choose to exit their businesses?

Fundamentally, rather than being a marker of defeat or failure, the researchers found that exit often represents a rational choice, especially for individuals endowed with high levels of entrepreneurial capital. This term refers to three broad categories of resources: human capital (an entrepreneur’s skills and experience), social capital (their professional networks and relationships), and financial capital (access to funding and liquidity). Indeed, those with greater resources were often more likely to exit their ventures than their less well-equipped peers. One might assume that access to greater resources would bolster the survival chances of a business, but the team’s findings suggest that having more can also mean having more to gain elsewhere.

This idea is associated with opportunity recognition, the ability of an entrepreneur to spot viable or promising new ventures in the wider market. The study found that entrepreneurs with both financial capital and high levels of opportunity recognition are more likely to shut down a given startup and move on to new ventures – we often talk of serial entrepreneurs, after all. The logic is clear: if one sees a better opportunity on the horizon and has the means to pursue it, holding on to a current, less promising venture may represent a suboptimal use of resources.

Bogatyreva, K. and Laskovaia, A. (2025) ‘Should I stay or leave? The role of human, financial and social capital in entrepreneurial exit’, Int. J. Entrepreneurial Venturing, Vol. 17, No. 1, pp.73–87.