Founder Gender and Firm Exit Routes: The Mediating Roles of Firm Size and VC Financing

Authors

Sonal Kumar, Bryant UniversityFollow
R. Isil Yavuz, Bryant UniversityFollow
Leila Zbib, Bryant UniversityFollow
Peter J. Nigro, Bryant UniversityFollow

Document Type

Article

Comments

Plain English Summary

Female entrepreneurs face fewer IPOs and M&As with firm size playing a key role. This study investigates how the gender of startup founders impacts the likelihood of achieving successful business exits through M&As IPOs. By analyzing data from 18,495 US startups, this research reveals that female entrepreneurs are less likely to experience positive exits. However, having a larger firm size can significantly boost the chances of a successful IPO and partially improve the likelihood of an M&A for female-founded companies. Moreover, VC financing is an important path to larger firm size. Thus, targeted support for female entrepreneurs, particularly in growing their businesses in size, could enhance their chances of successful exits, contributing to a more equitable entrepreneurial ecosystem.

Keywords

entrepreneurial exit; founder gender; feminist theories; venture capital; firm size

Publisher

Springer Nature

Publication Source

Small Business Economics

Rights Management

© 2025 Springer Nature

Abstract

While it is well established that founder gender influences starting and managing new ventures, little is known about the influence of founder gender on firm exits. In this paper, by drawing on liberal feminist and social feminist theories, we argue that female entrepreneurs are less likely to have positive exits via M&As and IPOs, and that firm size venture capital (VC) financing are two important factors mediating this relationship. We test our hypothesis using data from Crunchbase dataset on 18,495 new ventures in the US and find that firm size and VC financing fully mediate the negative relationship between female-founded firms and IPOs, but partially mediate the negative relationship between female-founded firms and M&As. These results are robust to propensity score matching. This paper provides valuable contributions to the entrepreneurship literature by explicitly investigating the mechanisms through which gender influences probabilities of positive firm exits via M&A or IPO and has important practical implications for policymakers.