Composition of Founding Teams and Growth of Academic Spin-offs

Abstract

This paper investigates how the composition of the founding team at start-up affects the development of academic spin-offs. Using a human capital approach, the overall size of the founding team as well as the team's functional human capital in the technology, marketing, and technology management domain are linked to employment and sales growth of the new ventures. The relationships are analyzed with a sample of 48 academic spin-offs from universities or research institutions. Findings reveal that the founding team size has a negative effect on growth, while the number of team members with a technology management background positively influences firm development. Human capital in the marketing and financial management domain at start-up does not impact development of the firms.