Towards the Third Generation University
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Towards the Third Generation University Managing the University in Transition

Managing the University in Transition

J. G. Wissema

Universities are undergoing massive change, evolving from science-based, government-funded institutions into ‘international know-how hubs’ dubbed third generation universities, or 3GUs. J.G. Wissema explores this dramatic change, tracing the historic development of universities, and exploring the technology-based enterprises, technostarters and financiers for start-ups and young enterprises that are the main partners of these 3GUs. He goes on to illustrate that universities play a new role as incubators of new science or technology based commercial activities and take an active role in the exploitation of the knowledge they create. The book concludes with suggestions regarding the way in which changes in the university’s mission should be reflected in subsequent organisational changes.
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Chapter 6: Financing Technostarters and Spinouts

J. G. Wissema

Extract

6. Financing technostarters and spinouts 6.1 FINANCING A START-UP Financiers of new ventures, the third category of partners of the third generation university, are perhaps the partners the least known to university staff and technostarters. Most technostarters start with thinking about the product they want to create and commercialise. This is what they are good at, and marketing is something they have to learn. We tell them that an aeroplane needs two wings to fly: technology and market. It then needs a pilot – the entrepreneur himself. But the plane will still be grounded unless there is fuel in the tank – finance. The financial world is quite remote from university life and many new enterprises fail to make it because they underestimate or do not understand the role of financiers. Financing in the early stages often has the form of equity participation. External financiers can help speed up the growth of the firm, by supplying extra capital and by bringing in experience. It is often better to participate in a rapidly growing enterprise than to muddle through on your own. The crunch is that financiers will often claim the right to change the management, thus being able to oust the founders from their management positions. This is very hard on the technopreneurs, but again the question is what do they want: a participation in a healthy enterprise or a nice way of passing the time? Many technostarters develop into good leaders for the more mature stages of the enterprise but there...

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