Spinning off new ventures from research institutions outside high tech entrepreneurial areas

Thesis (Ph.D.)--Massachusetts Institute of Technology, Sloan School of Management, 2002.Includes bibliographical references (v. 2, leaves 405-415).In this thesis, I examine how spinning off new ventures from academic institutions works in an environment outside developed high tech clusters and how it affects models of ventures. I examine these questions by studying the case of Belgium. There seems to be two archetypes of spin-off processes depending on the academic institutions capabilities. The first, practiced by specialized research institutes, involves a proactive technology opportunity search phase and an extensive concept-testing phase before ventures are founded. It can be characterized as a high selectivity and high support policy. The second and most common type, practiced by universities, leaves the initiation of projects to individual researchers and provides limited support for concept testing before ventures are founded. Most concept testing needs to be conducted after founding. This type of spin-off process can be regarded as a low selectivity and low support policy. The few ventures, spun off by specialized research institutes could adopt a high-growth orientation right away, becoming "pure" venture capital-backed firms from the outset. Ventures spun off by universities at a very early stage could only adopt a basic business model of contract-based work, often technical consulting. About half of these ventures never intended to go beyond this business model and settled in a small business model of venture with no growth orientation. The founders of the other half tried to build a firm that was going to be more than a substitute for a job. For these founders, the initial, basic contract-based work represented a source of revenue, as well as their main source of knowledge building.(cont.) Indeed, given their lack of business experience, without incubation capabilities from their university or an entrepreneurial community to support them, these founders could not borrow much relevant business and entrepreneurial knowledge from their local environment. They had to learn basic business and management skills largely by experimenting. As a result, these ventures went through a transitory, or gestation period, before they could develop a viable business model with high potential and growth objectives. I label this model of venture "prospector." I argue that this may be the dominant type of growth-oriented venture emerging in environment outside advanced high tech clusters where the entrepreneurship infrastructure is not well developed.by Jean-Jacques Degroof.Ph.D