The Signal to Stop: Exit, Termination, and the Art of Letting Go

Dean A. Shepherd () and Holger Patzelt ()
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Dean A. Shepherd: University of Notre Dame, Mendoza College of Business
Holger Patzelt: Technical University of Munich, School of Management

Chapter 10 in The Entrepreneurial Compass, 2026, pp 75-81 from Springer

Abstract: Abstract Strategic stopping is presented as an essential mechanism for bounding failure and redirecting resources toward fruitful opportunities. This chapter explores various exit modes, including harvest sales, liquidations, and stewardship transfers. A shock often triggers the decision to stop and is heavily influenced by the entrepreneur’s internal power structures (structural, ownership, expert, and prestige). A loss of power can lead to frustration and exit. The authors discuss the attentional filter, whereby experienced entrepreneurs are more ruthless in terminating projects that lack strategic fit. Psychological barriers like escalation of commitment, the sunk-cost effect, and the stigma of failure often delay termination, leading to “creeping death”—a slow, emotionally painful descent for project members. However, this delay can facilitate anticipatory grieving and learning. Finally, the chapter advocates for a disciplined postmortem learning cycle (searching, processing, coding, practicing) to turn failure into a vital source of new knowledge.

Keywords: Creeping Death; Escalation of Commitment; Exit Modes; Postmortem Learning; Power Structure; Stigma of Failure; Strategic Stopping (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-36429-6_10

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DOI: 10.1007/978-3-032-36429-6_10

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