Liquidity events and VC-backed academic spin-offs: The role of search alliances

Abstract

Despite the emergent importance of liquidity events (IPOs and trade sales) as performance indicators for VCbacked academic spin-offs, empirical research on the drivers of liquidity events relating to such spin-offs has been limited. In adopting a search perspective, we analyze how different alliance types impact on VC-backed academic spin-offs' chances of realizing a liquidity event. We find that market search alliances increase a spinoff's likelihood of a liquidity event, whereas technology search alliances reduce this likelihood. However, the latter effect is mitigated when the spin-off has a founding team with prior market experience. We explore the implications for practice and policy of the development and success of VC-backed academic spin-offs.

Entrepreneurial exit by acquisition: the impact of heterogeneity in products and technology portfolio and marketing capabilities

“…The central focus of these studies is on which venture target characteristics increase acquisition probability. The following variables have been identified as potential drivers of acquisition probability: the size of the firm’s R&D activity and technical quality (Heeley et al , 2006; Ransbotham and Mitra, 2010), university affiliation (Bonardo et al , 2011; Cattaneo et al , 2015; Meoli et al , 2013), the amount and nature of financial resources (Andersson and Xiao, 2016; Cumming et al , 2019; Ragozzino and Blevins, 2016; Ransbotham and Mitra, 2010), the experience of investors (Clarysse et al , 2013), whether the firm is a public or private target (Shen and Reuer, 2005) and inter-organizational relationships (Bruneel et al , 2020; Bruyaka and Durand, 2012; Hoehn-Weiss and Karim, 2014; Reuer et al , 2012). Even more recently, the role of marketing behaviors in explaining acquisition probability has gained momentum (Bruneel et al , 2020; Cuypers et al , 2017; Renko et al , 2020).…”

“…Adding to the literature on technology acquisitions and the literature on categorization as well as entrepreneurial marketing, our contribution is threefold. First this paper adds to a recent but growing stream of research that investigates antecedents of acquisition success (Bruneel et al , 2020; Cotei and Farhat, 2018; Heeley et al , 2006; Ragozzino and Blevins, 2016; Ransbotham and Mitra, 2010; Renko et al , 2020; Shen and Reuer, 2005) by considering target-level antecedents of acquisition price, controlling for acquisition likelihood. We contribute to this stream of research in two important ways.…”

A recipe for USO success? Unravelling the micro-foundations of dynamic capability building to overcome critical junctures

“…The role of USOs in driving innovation, productivity and employment continues to attract increasing attention from academics and policy-makers alike (Huynh et al, 2017;Bruneel et al 2020). USOs face a heightened level of risk and uncertainty, resulting in few USOs developing into commercially successful businesses compared to other types of new ventures (Soetanto and van Geenhuizen, 2019;Mathisen and Rasmussen, 2019;Wright et al, 2007).…”

“…However, it also emerged within some cases the academic founders were unable or unwilling to reframe their scientific mindset and, consequently, these USOs struggled to develop market absorptive capability. This resulted in issues of bounded rationality (Bruneel et al, 2020), which limited founders' ability to sense and seize viable entrepreneurial opportunities and hindered their ability to overcome critical junctures.…”

Resource configurations among digital academic spin-offs: finding the technology-market fit

“…Strategic partnerships may be particularly important to ASOs which often lack market knowledge related to for example value propositions, target customers and distribution channels (Bruneel et al , 2020). There often exists a gap between science and markets in commercializing scientific knowledge.…”