Venture Capital ‘Exits’ Profile : An empirical study of venture capital backed exits in the Turkish entrepreneurial ecosystem

Abstract: The impact of venture capital (VC) funding for the entrepreneurial ecosystem and its value for economic development is proved by many studies and the industrial data; which is why it is important to have more insight in this area. Also considering the large risk & uncertainty involved in the VC business and its low success rates, it is particularly important to have insight into VC business performance. Briefly, VCs run a system that maximizes financial return to their investors by “exiting” the invested startups through different options of sale. Exits are considered crucial to a VC when evaluating startups. As for measuring VCs performance, data related to exits are considered as signals for VCs’ performance and can be used as a key element for successful follow-up investments. By using this correlation this thesis attempted to generate a profile of VC exits this by analyzing the Turkish VC exits in terms of their sector, fund type, exit stage, exit type, and exit duration; within a time interval of 10 years (2013-2022). A quantitative longitudinal study design was carried out by collecting secondary data on Turkish VC exits. The results enabled to reveal the most frequent profile of VC exits which hold following characteristics: Exits were mostly based on digital technologies belonging to E-commerce or Fintech sectors. Majority of the exits were realized after 2020 and within an exit duration of 3,5 years on average. They mostly exited from VCs or Micro VCs but Corporate Venture Capitals (CVC)are also becoming visible in the game. M&A type of exits were dominant compared to other types especially IPO was the least among them. Lastly, most of the exits were made at seed stage.Besides, a cross-correlation conducted between exit stages and fund type revealed that CVC exits were lower in late stages whereas highest in early stages. The revealed profile had interesting implications for the entrepreneurial ecosystem actors that could guide them in their future decisions, and also for researchers within this field that could provide a platform for their future studies.