دانلود رایگان مقاله شروع کار شرکت کنندگان و اثر رقابت تصدی

abstract

Recent acquisitions involving Tumblr and Instagram have demonstrated that the takeover of an unlisted start-up company can offer enormous financial benefits to its (former) stakeholders. Considering the multimillion-dollar amounts paid for start-ups with no existing and highly uncertain future revenues, we investigate the process and outcome of negotiation dynamics in the context of takeovers. In a series of experiments, we show that even with a low level of uncertainty about a start-up's value and its financial resources, start-ups can influence bidders' behavior and consequently the start-ups' valuation. The results indicate that incumbents' bidding behavior is driven by the perceived threat level with respect to the start-up's business activities as well as by the uncertainty with respect to other incumbents' bidding behavior—drivers that are subject to activities by the start-ups' management. Interestingly, the effect even exists if incumbents clearly know that initiating a bidding process will very likely lead to losses.

4. Discussion

This study contributes to the existing literature on M&As by providing insights into the role of competition in dynamic takeover behavior of start-ups. In a series of experiments that address our two research questions, we show that despite an obvious lack of reasons for taking over an unprofitable start-up company, uncertainty about competitors' reactions leads to auctions and, subsequently, to takeovers. This effect can be observed even if incumbents are aware that initiating a bidding process for the start-up will very likely lead to individual losses. Consequently, we find support for the fact that unprofitable start-ups may well pursue a successful “born-to-be-sold” strategy and achieve a profitable exit.