CRITICAL JUNCTURES IN THE GROWTH OF UNIVERSITY HIGH-TECH SPIN-OUT COMPANIES

This paper presents an empirical investigation into the development of university spinout companies. Specifically, we focus on the issue of how these ventures develop over time. Employing a case-based research method we investigated how nine different spinout companies developed over their history. We use the capabilities framework in order to analyze the case-data. Our research indicates that each of the ventures can be considered to move through a number of distinct phases of their development. Furthermore, we found that each of the ventures came up against generic problems whilst attempting to move from one phase to another. We term the problem of moving between the different phases as "critical junctures", as ventures cannot develop into the next stage without overcoming each of the junctures. We identify four different critical junctures that spinout companies need to overcome if they are to succeed. Finally, we propose that unless the entrepreneur or the entrepreneurial team possesses the necessary entrepreneurial capabilities to overcome these critical junctures, the venture will stagnate, and eventually fail. Critical Junctures in the Growth in University High-Tech Spinout Companies

[1]  Mike Wright,et al.  Technology Transfer and Universities' Spin-Out Strategies , 2003 .

[2]  B. McKelvey.  Organizations: A Quantum View.Danny Miller , Peter H. Friesen , 1986 .

[3]  A. Mccarthy,et al.  Fresh starts: Arnold Cooper on entrepreneurship and wealth creation , 2001 .

[4]  Roger Hudson,et al.  Designing New Business Startups: Entrepreneurial, Organizational, and Ecological Considerations , 1984 .

[5]  Lowell W. Busenitz,et al.  Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making , 1997 .

[6]  S. Venkataraman,et al.  The distinctive domain of entrepreneurship research: An editor''s perspective , 1997 .

[7]  Scott Shane,et al.  Executive Forum: University technology transfer to entrepreneurial companies , 2002 .

[8]  Mark P. Rice,et al.  Opportunity Recognition and Breakthrough Innovation in Large Established Firms , 2001 .

[9]  K. Eisenhardt,et al.  The Art of Continuous Change : Linking Complexity Theory and Time-Paced Evolution in Relentlessly Shifting Organizations , 1997 .

[10]  J. Barney,et al.  The resource-based view of the firm: Ten years after 1991 , 2001 .

[11]  Per Davidsson,et al.  Where do they come from? Prevalence and characteristics of nascent entrepreneurs , 2000 .

[12]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[13]  Richard R. Nelson,et al.  Observations on the Post-Bayh-Dole Rise of Patenting at American Universities , 2001 .

[14]  D. Slevin,et al.  A Conceptual Model of Entrepreneurship as Firm Behavior , 1991 .

[15]  S. Venkataraman,et al.  Hostile Environmental Jolts, Transaction Set and New Business Development , 1998 .

[16]  S. Faraj,et al.  Entrepreneurial Resources, Organizational Choices, and Competitive Outcomes , 1998 .

[17]  D. Slevin,et al.  Strategic management of small firms in hostile and benign environments , 1989 .

[18]  Robert K. Kazanjian.  Relation of Dominant Problems to Stages of Growth in Technology-Based New Ventures , 1988 .

[19]  Jitendra V. Singh,et al.  Organizational Legitimacy and the Liability of Newness , 1986 .

[20]  S. Shane.  Prior Knowledge and the Discovery of Entrepreneurial Opportunities , 2000 .

[21]  Benyamin Lichtenstein,et al.  How Do “Resource Bundles” Develop and Change in New Ventures? A Dynamic Model and Longitudinal Exploration , 2001 .

[22]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[23]  M. Bray,et al.  University revenues from technology transfer: Licensing fees vs. equity positions , 2000 .

[24]  Barbara J. Bird.  The Operation of Intentions in Time: The Emergence of the New Venture , 1992 .

[25]  Mike Wright,et al.  Academic and Surrogate Entrepreneurs in University Spin-out Companies , 2001 .

[26]  Truls Erikson,et al.  Entrepreneurial capital: the emerging venture's most important asset and competitive advantage , 2002 .

[27]  A. V. D. Ven,et al.  Suggestions for studying strategy process: A research note , 1992 .

[28]  J. R. Moore,et al.  The theory of the growth of the firm twenty-five years after , 1960 .

[29]  P N O'Farrell,et al.  Alternative Theories of Small-Firm Growth: A Critical Review , 1988 .

[30]  M. M. Hart,et al.  From initial idea to unique advantage: the entrepreneurial challenge of constructing a resource base , 2001, IEEE Engineering Management Review.

[31]  Manju Puri,et al.  Venture Capital and the Professionalization of Start-Up Firms: Empirical Evidence , 2000 .

[32]  Steve Thompson,et al.  The resource-based view and economics , 2001 .

[33]  Mike Wright,et al.  Do UK venture capitalists still have a bias against investment in new technology firms , 2002 .

[34]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[35]  Kathleen M. Eisenhardt,et al.  Architectural Innovation and Modular Corporate Forms , 2001 .

[36]  B. Caplan.  The Austrian Search for Realistic Foundations , 1999 .

[37]  R. Deshpandé,et al.  “Paradigms Lost”: On Theory and Method in Research in Marketing , 1983 .

[38]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[39]  Terence R. Mitchell,et al.  Top Level Management Priorities in Different Stages of the Organizational Life Cycle , 1985 .