The Impact of Academics in Start-Ups Emerging from Universities

The US has a long tradition of university research being spun out to form new high tech business. Many have grown to become leading firms not only within the US but internationally. In Europe there has been much less of a tradition of universities encouraging faculty to develop their research competency and outputs as new businesses. It is only in relatively recent times that attention has focused on this as a way of enhancing the position of the university, generating more income and prestige and enabling mutually beneficial partnerships with the corporate world. In addition, as global competition accelerates in more traditional industries, these knowledge-intensive businesses are seen by governments at all levels as offering the potential for competitive advantage to regions and countries and new high quality jobs. Driven by budgetary cuts from central governments, European universities have increasingly been forced to look for new sources of revenue. A focus on commercialisation has led to many new start-ups based on leading edge research and some examples of new enterprises achieving rapid growth. But many seem to fail either to find a sustainable market or, despite public funding being channelled into such firms, at the stages where venture capital is required. One long established success factor for starts ups is the network of the entrepreneur and how it is used. In this paper we present new thinking about the importance of the network of the entrepreneur as a support for growing such businesses. We examine the literature on social network theory and its application to entrepreneurship. We then present a model of the role of the social network. Following this we look at the particular circumstances of the university spin-out with particular reference to two key domains of leadership - technical leadership and commercial leadership. This enables us to examine university spin-outs to see how thy have structured themselves, the capabilities within the enterprise- - , the extent to which the entrepreneurial leadership is networked, the form of networks and their impact on the success or otherwise of the business. An exploratory study is presented in which the model is tested using the case method. Conclusions drawn will be of particular relevance to researchers seeking to undertake quantitative research in this field. They will also be of interest to practitioners setting up such businesses, particularly those coming from an academic background, the many venture capitalists seeking investment opportunities and consultants offering support to such ventures.