Academic Spin-Offs and Technology Transfer in Europe
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Academic Spin-Offs and Technology Transfer in Europe

Best Practices and Breakthrough Models

Edited by Sven H. De Cleyn and Gunter Festel

While the US has traditionally been successful in commercialising new technologies, Europe is confronted with an increasing dependency for fast developing technologies like biotechnology or ICT, despite having some of the best universities in the world. This book will explore the key attributes of commercialising academic knowledge, focusing on spin-offs. Bringing together the visions and best practices used by leading academics and professionals across Europe, the editors provide new and practical insights on the topic in an attempt to resolve the European paradox.
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Chapter 9: Founding angels as an emerging angel investment model to support early stage high-tech spin-offs

Gunter Festel


The technology transfer gap between academic research and the commercialization of scientific knowledge can be addressed by academic spin-offs that translate this knowledge into industrial applications (Grandi and Grimaldi, 2005). Spin-offs are usually more flexible and faster than established companies, given their lean structure and the absence of any prior track record (Lerner, 2005). However, there are not enough of these spin-offs in Europe, which hampers the effective and efficient commercialization of new scientific knowledge. At present, business angels (BAs) and venture capitalists (VCs) are unable to remedy this. Because BAs (and VCs) only invest in existing spin-offs, those founders who are unable to collect enough capital from ‘friends, family and fools’ to fund their first steps face a difficult situation. Instead of concentrating on developing their technology and finding customers, they are forced to focus tremendous efforts on raising funds. Founding angels (FAs) can help because they provide a mechanism to support founding teams both financially and operationally from pre-spin-off phase onwards. FAs are private individuals investing own money who contribute to the commercialization of technologies originating from universities, research organizations and corporations (Festel and De Cleyn, 2013a, 2013b). By entering the spin-off development trajectory early, they are able to complement the roles of other (later) investors like BAs or VCs, as shown in Figure 9.1 (Festel and Boutellier, 2008; Festel and Kratzer, 2012). As Figure 9.2 illustrates, their contribution to the investment space is differentiated by the time of investment (before vs. after foundation) and source of investment (own vs. foreign money).

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