UNIVERSITY SPIN-OUT COMPANIES - TECHNOLOGY START-UPS FROM UNIVERSITY-OF-TEXAS-AT-AUSTIN

This study assesses the factors that enhance and inhibit the formation and development of spin-out companies from the university. It presents empirical data from 23 technology-based spin-out companies from the University of Texas at Austin. The data are based on a survey questionnaire that assessed a range of factors, including the role of the university in company formation and development, reasons for start-up and major difficulties facing spin-out companies. Spin-out companies are defined in two ways: (1) the founder was a faculty member, staff member, or student who left the university to start a company or who started the company while still affiliated with the university; and/or (2) a technology or technology-based idea developed within the university. The companies in the study represent a range of technologies and tend to be growth oriented. Results of the study show that the University of Texas at Austin has traditionally played an important, albeit passive role in the formation and development of spin-out companies. Pull factors, such as recognition of a market opportunity, drive to try something new and desire to put theory into practice, are more important than push factors, or various forms of frustration with the university environment, in influencing the start-up of spin-out companies. However, institutional and behavioral changes indicate that the university is beginning to take a more proactive role in spin-out company formation and development. Among a variety of organizations, the university is considered the most important organizational influence on the spin-out company. The university is particularly important as a source of personnel and ideas in both the formation and development of the spin-out company. The university also plays an important role as a source of consultants and research expertise as the company grows. Major difficulties facing the spin-out company, such as raising capital, managing growth and penetrating new markets, revolve around business rather than technological concerns. The paper concludes with a number of implications for university policy if the university decides to take more of a proactive role in encouraging and supporting spin-out companies. A variety of institutional mechanisms and increased access to university resources are predicted to directly contribute to the formation and development of spin-out companies. © 1990.