Research published by Bournemouth University investigates how the personal characteristics of entrepreneurial founders shape the growth strategies subsequently adopted by their firms at the point of an Initial Public Offering (IPO).
Using quantitative data from 208 entrepreneur-led IPOs on the London Stock Exchange’s AIM market, the study examines whether founders steer their newly public firms towards mergers and acquisitions (M&A) or research and development (R&D).
The analysis shows clear patterns, i.e. that founders with ‘throughput’ functional backgrounds such as operations, finance or legal are significantly more likely to pursue M&A, especially when they also hold numerous external directorships, suggesting that broader networks facilitate acquisition-led growth.
In contrast, founders with higher levels of formal education, particularly those holding PhDs, tend to favour R&D investment. Age also plays a role, with older founders more inclined towards R&D, while higher founder share ownership appears to suppress R&D expenditure.
For ISBE members, this is important as the study offers valuable insights into how founder profiles shape strategic decision-making during critical organisational transitions.
Find out more: https://www.mdpi.com/2673-7116/3/3/29