Fueling IPOs and M&As: The Power of Entrepreneurial Social Capital

Abstract

While investigating more than 2,750 serial entrepreneurs from around the world, including almost 1,500 from the US, with the help of the Crunchbase dataset, we found that the social capital of entrepreneurs positively influences the number of exits through both mergers and acquisitions (M&As) and initial public offerings (IPOs). The link between entrepreneurs’ connectedness and their respective startups’ exits is more pronounced in the US than internationally, showing that a 1% increase in social capital among American entrepreneurs is associated with a 6.82% increase in the number of M&A exits and a 2.98% increase in the number of IPO exits.