Financing of startups - investors’ requirement for exit strategy: A comparative study of Norway and the United States
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- Master Thesis 
“A company doesn’t sell itself though it is a success. A lot of work has to be put into the exit strategy” Rune Rinnan, Founder and Venture Capitalist, Televenture This thesis aims to gain an understanding of the conditions in Norway and the US regarding financing of startups and the importance of exit strategies. In addition, the thesis will study how culture within the business environments can affect both availability of startup funding and investors’ focus on exit strategy. The main focus is therefore to identify if investors in fact focus on exit and if there are differences between the two environments. Investors’ main goal is to achieve return on investment, and the return relies on successful exits. Therefore, one should expect every investor to focus on exit strategy. The research question is as following: Which requirements do investors have regarding exit strategies when investing in innovative startups, and are there any differences between investors’ requirements in the US and Norway? To gain insight in this subject we found it beneficial to construct a qualitative research. We conducted personal interviews with individuals who have established innovative startups and investors supporting startups financially as angel investors, seed investors and venture capitalists. In addition, we interviewed individuals who have expertise in this subject as they are operating as consultants for startups. The respondents’ different experiences were beneficial as it allowed for a nuanced analysis. The data was analyzed based on relevant theory from researchers within the academic fields that we found to be applicable. Writing this thesis and examining the research question has uncovered several interesting findings. Both Norwegian and American investors pay little attention planning for a specific exit strategy, especially in early stage when investing in a startup. However, in later stages the focus on exits increase for both entrepreneurs and investors, as the exit becomes more prominent. It is also evident that there are differences between the cultures in Norway and Silicon Valley which have implications on the market dynamics for financing of startups. There are clear differences in market size, investors’ competence and the use of standardized metrics, which seems to have a significant impact on entrepreneurial success.