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Acquisition Prospects and Startup Strategy
João Dimas, Anushri Jain and Lampros Pnevmatikos
Work in Progress
Abstract
Acquisitions are an important exit channel for entrepreneurial firms. We examine
how startups adjust product-development and hiring strategies when the likelihood
of acquisition declines. Our analysis asks whether reduced acquisition prospects
cause startups to invest more heavily in building durable standalone businesses
and how these changes affect the composition of their workforce and
product-development choices.