Academic Entrepreneurship

Academic Entrepreneurship

University Spinoffs and Wealth Creation

New Horizons in Entrepreneurship series

Scott Shane

In this unique and timely volume, Scott Shane systematically explains the formation of university spinoff companies and their role in the commercialization of university technology and wealth creation in the United States and elsewhere. The importance of university spinoff activity is discussed and the historical development of university spinoff ventures is traced over time.

Chapter 12: The Performance of University Spinoffs

Scott Shane

Subjects: business and management, entrepreneurship, management and universities, education, management and universities

Extract

For both the universities that spawn spinoff companies and the entrepreneurs that found them, the creation of high-performing companies is an important goal of the spinoff effort. In general, this effort is quite successful. As Chapter 2 explained, university spinoffs perform better than typical start-up companies. However, not all university spinoffs perform well. This chapter explores the factors that enhance the performance of university spinoff companies and differentiate more successful firms from less successful ones. The findings of this chapter are by no means comprehensive. The set of factors that influence the performance of new companies is broad, but has not been the subject of extensive research by scholars. This is due to the fact that relatively few data are available to test, on university spinoffs, the effects of those factors that prior research has shown to influence the performance of new companies in general. Therefore the ability to draw strong conclusions from scholarly investigation of the performance of university spinoffs is limited. Nevertheless, several important patterns emerge. The performance of university spinoffs is influenced by the human capital of the founders, the financial resources of the new ventures, the efforts of the founders of university spinoffs to overcome the technology push problem and develop products and services that meet customer needs, the nature of the spinoff’s technology and strategy, and the support provided by the universities that spawn the spinoffs. Each of these factors is discussed in a separate subsection of the chapter. I begin with human capital. THE...

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