Abstract

This study demonstrates the combinations of multiple causal factors that formulate a startup’s strategy to successfully “exit”, namely “recipes for a successful exit,” in the clean- and hard-tech sector. We identify seven key causal factors (i.e., causal conditions) that impact startup success, including commercial readiness, investor interactions, favorable industry, non-financial support, straightforward development path, experienced team, and visibility to investors. We also investigate the combinations of selective causal conditions that can provide further synergetic impact. We conduct the fuzzy-set qualitative comparative analysis (fsQCA) on seven U.S. clean- and hard-tech startups that exited between 2005 and 2016. The successful companies all demonstrate distinctive characteristics based on three general categories (1) robust ecosystem; (2) heavy-lifting team; or (3) external opportunity. Across these three categories, commercial readiness and strong investor interactions are necessary conditions for all exit cases. But there are important differences that drive success in each category, such as the interaction with non-financial support (in the robust ecosystem case), experienced team (in the heavy-lifting team case), and favorable industry (in the external opportunity case). Our findings are meant to support entrepreneurs in reaching an exit by optimizing the given internal and external circumstances, and policymakers to build a robust ecosystem that can increase the success rate of the clean- and hard-tech development.