University Spinoffs and Wealth Creation
Chapter 12: The Performance of University Spinoffs
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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