Unicorn Exits as a Trigger for the Development of Small Countries’ Startup Ecosystems

Abstract

The success of startups largely depends on the level of development of the startup ecosystem. Therefore, this article examines a previously unconsidered issue: what is the impact of large exits in countries with a small economy on the development of the startup ecosystem? To answer this question, we used the method of comparative analysis for a variety of static and dynamic indicators: the number of business angels, startups, investments in startups, large investment rounds, and exits in four relatively homogeneous countries.

In the study, we presented empirical evidence that the exit of founders and investors from unicorn startups is one of the main – and possibly the most important – external driver of the growth of qualitative and quantitative indicators of the startup ecosystem in countries with a small population and a small economy.

Keywords: Startups, Unicorn Exits, Startup Ecosystem

JEL Classification: L26, R11