Spin-off Founders Research Articles

The Role of Academic Spin-Offs Facilitators in Navigation of the Early Growth Stage Critical Junctures

Academic spin-off facilitators support high-tech academic spin-offs and help them to navigate various barriers and critical junctures during their growth stages. In this article we draw on stage-gate models, the path-dependency, and resource based view to identify start-ups' resource needs as perceived by both facilitators and by entrepreneurs. Using qualitative data based on in-depth interviews with 18 academic spin-off facilitators and nine spin-off founders, from three technical universities in the Netherlands, we explore the critical junctures and key support activities. The results show that founders appreciate milestones and direct interface regarding business support, business plan development, and legal support during the early growth stages. In all stages, in particular during the later stages, founders appreciate different type of network support (e.g., start-up network and industry) and when facilitators act as intermediaries to guide them in the network. This helps spin-offs to gain credibility and reach out to the market. This article adds to current research on academic facilitators and in particular incubators by providing a more comprehensive explanation for the low usage of the incubator's resources. By matching key resources and support activities that can navigate particular critical junctures, we try to promote the successful transition from one stage to the other. Our findings offer significant implications, both theoretical and practical, for academic entrepreneurship literature.

Patenting or not? The dilemma of academic spin-off founders

Purpose The purpose of this paper is to analyze the impact of patenting on the performance of academic spin-off firms (ASOs) in the post-creation stage. Specifically, our study analyses how the combination of knowledge transfer mechanisms by ASOs and patents can foster ASOs’ early growth performance. Design/methodology/approach The authors explored the relations between patenting processes and spin-off performance through econometric methods applied to a broad sample of Italian ASOs. The research adopts a deductive approach, and the hypotheses are tested using panel data models by considering the sales growth rate as the dependent variable regressed over measures of patenting activity and quality and assuming that firm-specific unobservable drivers of growth are captured by random effects. Findings The empirical analysis shows that the incorporation of knowledge transferred by the parent university and academic founders through patents affects the performance of ASOs. Specifically, the authors find that the number of patents is a positive driver of ASOs’ performance, whilst patent age does not have a significant impact on growth. Moreover, spin-offs with a larger endowment of patents obtained before foundation, surprisingly, grow less on average. Practical implications The findings have implications for ASO founders by suggesting that patenting processes reap benefits. However, in the trade-off of external knowledge access vs internal knowledge protection, it may be better to begin patenting after the foundation of ASOs. Originality/value The authors enrich the on-going debate about the connections between knowledge transfer and organizational performance. This paper combines the concepts of patents and ASOs by providing evidence on the role of patenting processes as a transfer mechanism of explicit knowledge in ASOs. Furthermore, the authors contribute to the literature on costs and benefits of patents by hinting at unexpected findings.

Origins and Outcomes: The Roles of Spin-Off Founders and Intellectual Property in High-Technology Venture Outcomes

Spin-off firms originate from several sources including universities, existing firms, and government research centers. Thus far, work on spin-off activity has focused on factors that influence the ...

Exploring Entrepreneurial Activity at Cape Town and Stellenbosch Universities, South Africa

Entrepreneurial activity at universities, especially spin-off formation, has emerged as an important mechanism for accelerating the transfer of technology and knowledge to commercial markets. With some exceptions, such as China, studies on university entrepreneurship have tended to concentrate on the experiences of developed countries. Perhaps because of the lack of a comprehensive database of university spin-offs, studies on experience in South Africa have typically included spin-offs only as part of a broad examination of university–industry partnerships, technology transfer mechanisms or academic entrepreneurship. This study is based on a questionnaire and interview survey of spin-offs at Cape Town and Stellenbosch Universities. The results suggest that the most important reasons cited for spin-off formation are market opportunities and a desire for commercial exploitation of knowledge and experience. As with university spin-off founders elsewhere, funding is regarded as the most significant problem, followed by such factors as recruiting skilled people, lack of facilities, product marketing and time pressure. It is argued that this exploratory study provides lessons and insights that will inform similar, future research on a larger scale.

Human Capital of Spinoffs

This study examines how the human capital of spinoff founders and the performance of parent firms affect the success of spinoffs by using a matched employer-employee dataset of new ventures covering 7 SIC 1-digit sectors in the United States. Our data cover 29,100 spinoffs and 379,800 new ventures formed by lone entrepreneurs in 23 states between 1992 and 2005. We evaluate several components of human capital: outcomes of human capital investments vs. human capital investments, task-related human capital vs. non-task-related human capital, and individual human capital vs. group capital, and examine whether these types of human capital affect spinoff performance differently. We find that spinoff founder’s earnings (an outcome of human capital investment) and industry experience (task-related human capital) prior to spinoff formation have strong positive correlations with spinoff performance, as measured by size, wage and growth rate. We also find that group experience of spinoff founders prior to spinoff fo...

Getting Off to a Good Start: The Effects of Upper Echelon Affiliations on Underwriter Prestige

The initial public offering (IPO) is one of the most critical events in the lifetime of a young firm. Prior research has shown that firms tend to have successful IPOs if they go public with the endorsement of a prestigious lead underwriter. This paper examines the antecedents to receiving endorsement by a prestigious underwriter and links this to the experience base of a firm's upper echelon. We theorize that the amount and type of upper echelon experience serve as important symbols of a young firm's legitimacy to critical outsiders. We introduce a typology of upper echelon experience that distinguishes between upper echelon upstream, horizontal, and downstream employment-based affiliations and suggest that these different types of upper echelon affiliations allay different types of endorser concerns regarding firm legitimacy, affecting the endorsement process. Further, we theorize that the relationships between upper echelon experience and investment bank prestige will be moderated by technological uncertainty. We test our assertions on a comprehensive sample of public and private biotechnology firms that were founded between 1961 and 1994 and that went public between 1979 and 1996. Analyses of the five-year career histories of the over 3,200 executives and directors that make up the upper echelons of these firms show that firms with upper echelons with affiliations with prominent downstream organizations (i.e., pharmaceutical and/or healthcare companies) and with prominent horizontal organizations (i.e., biotechnology companies) are more likely to attract the endorsement of a prestigious investment bank. We also find that the greater the range of upper echelon affiliations across the categories of upstream, horizontal, and downstream affiliations, the more prestigious the firm's lead underwriter. We also find that these latter results are moderated by technological uncertainty. The present research has implications for the study of organizational legitimacy, interorganizational endorsements, and entrepreneurship.

How Do University Inventions Get Into Practice?

Jeannette Colyvas • Michael Crow • Annetine Gelijns • Roberto Mazzoleni Richard R. Nelson • Nathan Rosenberg • Bhaven N. Sampat Institute for International Studies, Stanford University, Stanford, California 94305 Office of the Executive Vice Provost, Columbia University, New York, New York 10027 INCHOIR, Columbia University, New York, New York 10027 Department of Economics and Geography, Hofstra University, Hempstead, New York 11594 School of International and Public Affairs, Columbia University, New York, New York 10027 Department of Economics, Stanford University, Stanford, California 94305 School of Public Policy, Georgia Institute of Technology, Atlanta, Georgia 30332 colyvas@leland.stanford.edu • mc71@columbia.edu • acp10@columbia.edu • ecorzm@mail1.hofstra.edu rrn2@columbia.edu • nate@leland.stanford.edu • bhaven.sampat@pubpolicy.gatech.edu

The commercialisation of national laboratory technology through the formation of ''spin-off'' firms: evidence from Lawrence Livermore National Laboratory

This paper examines the role of Lawrence Livermore National (LLNL), a major US Department of Energy nuclear weapons research facility, in spawning firms. We provide some of the most comprehensive estimates of the number of spin-off firms associated with LLNL and find that this research facility appears to be at least as important a source of spin-off firms as are three defence-oriented laboratories in New Mexico with a combined budget that is substantially larger than that of LLNL. Our survey of these LLNL firms suggests that fewer than one-quarter of them are directly engaged in the commercialisation of LLNL-developed technologies, a finding that is broadly consistent with the results of other studies. Finally, our interviews with spin-off founders suggest that management and other policy-related impediments to the formation of firms reduce the contribution of these firms to the commercialisation of LLNL-developed technologies.

The Alliances of Spin-Offs Versus Start-Ups: Social Ties in the Genesis of Post-Soviet Alliances

This paper links the alliance strategy of emergent firms to the structural relations in the network of new firm organizers. Data gathered in Russia from 1991 to 1993 on nine post-Soviet commodity exchange markets demonstrate how the difference in internal social structure between spin-off and startup exchanges shapes the strategy of their inter-firm networks and initial performance. The way in which managers come together structures their diversity and openness to the outside environment. In turn, the social structure internal to the firm affects the range and scope of their ties to other organizations. I show how the high range of overlap among the ties between spin-off founders has a more concentrated connection to the outside environment than the exchanges created by more loosely-linked startup founders. The relational costs of the more concentrated ties increases the cost of search, however, it lowers the cost of malfeasance. Thus, the model suggested proposes that the relative advantage of investing in relational capital is a double-edged sword which poses constraints along with its particular advantages. Finally, the model also brings to question the relative merits of concentrated alliances supposedly advantageous to new firms in particular by suggesting that conditions of transition and institutional instability may under-cut the relative advantage of familiarity and specialization found in Western settings.

Tests of Alternative Theories of Firm Growth

This study examines the relationships among firm growth, firm size, and firm age for a sample of manufacturing firms between 1976 and 1982. Firm growth is found to decrease with firm age and firm size. These findings are robust to alternative assumptions concerning the effects of sample censoring and the functional form of the growth relationship. The inverse growth-age relationship is consistent with a theory of firm learning proposed by Boyan Jovanovic while the inverse growth-size relationship is inconsistent with a number of theories that assume or imply Gibrat's law. Copyright 1987 by University of Chicago Press.

Spin-off companies from Chalmers University of Technology

A survey of companies which have been spun-off from Chalmers University of Technology, Göteborg, Sweden, has been made and compared to an inventory of patent activity at Chalmers. The results are compared to similar studies of spin-off companies in Boston and California. We find spin-off rates between those reported for California and those which can be calculated for MIT. The situation with regard to spin-off founders offers many similarities to the situation at MIT and Stanford. However, on the average the companies from Chalmers are smaller and newer.