The Journal of Technology Transfer

, Volume 35, Issue 6, pp 567–584 | Cite as

Agency and similarity effects and the VC’s attitude towards academic spin-out investing

  • Mirjam Knockaert
  • Mike Wright
  • Bart Clarysse
  • Andy Lockett


Our research seeks to develop understanding of the factors explaining venture capital investment managers’ attitudes towards investment in the unique context of academic spin-outs. We provide a novel integration of both VC fund characteristics and investment managers’ human capital characteristics with a unique hand-collected dataset of 68 early stage VC investment managers in Europe. Attitudes toward academic spin-out investing are positively affected by the presence of public sector capital and by investment managers who are more intensively involved with the entrepreneur. Specific human capital in investment managers who had worked in an academic environment is more likely associated with investment in academic spin-outs. In terms of general human capital, financial experience is positively related while entrepreneurial experience is negatively associated with investment attitude towards academic spin-outs. There may be a need to facilitate the attraction of people from industry and investment banking into public VC funds in particular.


Venture capital Academic spin-out Human capital Agency theory 

JEL Classification

G24 L26 


  1. Amit, R., Brander, J., & Zott, C. (1998). Why do venture capital firms exist? Theory and Canadian evidence. Journal of Business Venturing, 13, 441–466.CrossRefGoogle Scholar
  2. Anderson, N., & Shackleton, V. (1990). Decision making in the graduate selection interview: A field study. Journal of Occupational Psychology, 67, 63–77.Google Scholar
  3. Bagozzi, R., & Warshaw, P. (1992). An examination of the etiology of the attitude-behavior relation for goal-directed behaviors. Multivariate Behavioral Research, 27(4), 601–634.CrossRefGoogle Scholar
  4. Becker, G. (1975). Human capital. Chicago: Chicago University Press.Google Scholar
  5. Bergemann, D., & Hege, U. (1998). Venture capital financing, moral hazard, and learning. Journal of Banking & Finance, 22, 703–735.CrossRefGoogle Scholar
  6. Berger, A. N., & Udell, G. F. (1998). The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle. Journal of Banking & Finance, 22, 613–673.CrossRefGoogle Scholar
  7. Blau, P. M. (1964). Exchange and power in social life. New York: Wiley.Google Scholar
  8. Bottazzi, L., Da Rin, M., & Hellmann, T. (2008). Who are the active investors? Evidence from venture capital. Journal of Financial Economics, 89, 488–512.CrossRefGoogle Scholar
  9. Byrne D. (1971). The attraction paradigm. New York.Google Scholar
  10. Christensen, C. (2003). The innovator’s solution: Creating and sustaining successful growth. Boston: Harvard Business School Press.Google Scholar
  11. Clarysse, B., Knockaert, M., & Lockett, A. (2007a). Outside board members in high tech start-ups. Small Business Economics, 29(3), 243–259.CrossRefGoogle Scholar
  12. Clarysse, B., Wright, M., Lockett, A., Mustar, P., & Knockaert, M. (2007b). Academic spin-offs, formal technology transfer and capital raising. Industrial and Corporate Change, 16(4), 609–640.CrossRefGoogle Scholar
  13. Colombo, M., & Grilli, L. (2005). Founders’ human capital and the growth of new technology-based firms: A competence-based view. Research Policy, 34, 795–816.CrossRefGoogle Scholar
  14. Conover W. J. (1980). Practical nonparametric statistics. Wiley.Google Scholar
  15. Cumming D. (2006). Adverse selection and capital structure: Evidence from venture capital. Entrepreneurship Theory and Practice, 30(2), 155–183.CrossRefGoogle Scholar
  16. Danneels, E. (2004). Disruptive technology reconsidered: A critique and research agenda. Journal of Product Innovation Management, 21(4), 246–258.CrossRefGoogle Scholar
  17. De Bettignies, J.-E., & Brander, J. (2007). Financing entrepreneurship: Bank finance versus venture capital. Journal of Business Venturing, 22, 808–832.CrossRefGoogle Scholar
  18. Di Giacomo M. (2004). Public support to entrepreneurial firms: An assessment of the role of venture capital in the European experience. The Journal of Private Equity, 8(1), 22–38.CrossRefGoogle Scholar
  19. Dimov, P. D., & Shepherd, D. A. (2005). Human capital theory and venture capital firms: Exploring “home runs” and “strike outs”. Journal of Business Venturing, 20, 1–22.CrossRefGoogle Scholar
  20. Dimov, D., Shepherd, D., & Sutcliffe, K. (2007). Requisite expertise, firm reputation, and status in venture capital investment allocation decisions. Journal of Business Venturing, 22(4), 481–502.CrossRefGoogle Scholar
  21. EC. (1994). European report on S&T indicators.Google Scholar
  22. Elango, B., Fried, V., Hisrich, R., & Poloncek, A. (1995). How venture capital firms differ. Journal of Business Venturing, 10(2), 157–179.CrossRefGoogle Scholar
  23. Ensley, M., & Hmieleski, K. (2005). A comparative study of new venture top management team composition, dynamics and performance between university-based and independent start-ups. Research Policy, 34, 1091–1105.CrossRefGoogle Scholar
  24. European Commission. (2003). Raising EU R&D intensity: Risk capital measures. Brussels and Luxembourg: European Commission.Google Scholar
  25. Franke, N., Gruber, M., Harhoff, D., & Henkel, J. (2006). What you are is what you like—similarity biases in venture capitalists’ evaluations of start-up teams. Journal of Business Venturing, 21(6), 802–826.CrossRefGoogle Scholar
  26. Franke N., Gruber M., Harhoff D., & Henkel J. (2008). Venture capitalists’ evaluations of start-up teams: Trade-offs, knock-out criteria, and the impact of VC experience. Entrepreneurship Theory and Practice, 32(2), 459–483.CrossRefGoogle Scholar
  27. Franklin, S., Wright, M., & Lockett, A. (2001). Academic and surrogate entrepreneurs in university spin-out companies. Journal of Technology Transfer, 26(1–2), 127–141.CrossRefGoogle Scholar
  28. Fried, V., & Hisrich, R. (1994). Toward a model of venture capital investment decision making. Financial Management, 23(3), 28–37.CrossRefGoogle Scholar
  29. Gill, D., Martin, C., Minshall, T., & Rigby, M. (2000). Funding technology: Lessons from America. London: Wardour Publications.Google Scholar
  30. Gimeno, J., Folta, T. B., Cooper, A. C., & Woo, C. Y. (1997). Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Administrative Science Quarterly, 42(4), 750–784.CrossRefGoogle Scholar
  31. Gist, M. E., & Mitchell, T. R. (1992). Self-efficacy: A theoretical analysis of its determinants and malleability. Academy of Management Review, 12(2), 183–211.CrossRefGoogle Scholar
  32. Gompers, P. (1995). Optimal investment, monitoring, and the staging of venture capital. Journal of Finance, 50(5), 1461–1489.CrossRefGoogle Scholar
  33. Gompers, P., & Lerner, J. (1999). The venture capital cycle. Cambridge: MIT Press.Google Scholar
  34. Gompers, P., & Lerner, J. (2001). The venture capital revolution. Journal of Economic Perspectives, 15(2), 145–168.CrossRefGoogle Scholar
  35. Greene W. (2003). Econometric analysis. Prentice Hall.Google Scholar
  36. Gupta, A., & Sapienza, H. (1992). Determinants of venture capital firms’ preference regarding the industry diversity and geographic scope of their investments. Journal of Business Venturing, 7(5), 347–362.CrossRefGoogle Scholar
  37. Hair, J. F., Anderson, R. E., Tathum, R. L., & Black, W. C. (1998). Multivariate data analysis with readings. New York: Macmillan.Google Scholar
  38. Hall, J., & Hofer, C. W. (1993). Venture capitalists’ decision criteria in new venture evaluation. Journal of Business Venturing, 8, 25–42.CrossRefGoogle Scholar
  39. Hannan, M., & Freeman, J. (1977). The population ecology of organizations. American Journal of Sociology, 82(5), 929–964.CrossRefGoogle Scholar
  40. Hellmann, T., & Puri, M. (2000). The interaction between product market and financing strategy: The role of venture capital. The Review of Financial Studies, 13(4), 959–984.CrossRefGoogle Scholar
  41. Hellmann, T., & Puri, M. (2002). Venture capital and the professionalization of start-up firms: Empirical evidence. The Journal of Finance, 57(1), 169–198.CrossRefGoogle Scholar
  42. Jackson, S. F., Brett, J. F., Sessa, V. I., Cooper, D. M., Julin, J. A., & Peyronnin, K. (1991). Some differences make a difference: Individual dissimilarity and group heterogeneity as correlates of recruitment, promotion and turnover. Journal of Applied Psychology, 76, 675–689.CrossRefGoogle Scholar
  43. Jensen, M., & Meckling, W. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economic, 3(4), 305–360.CrossRefGoogle Scholar
  44. Jovanovic B. & Szentes B. (2007). On the return to venture capital. NBER Working Paper Series, Working Paper 12874.Google Scholar
  45. Kale, S., & Arditi, D. (1998). Business failures: Liabilities of newness, adolescence and smallness. Journal of Construction Engineering & Management, 124(6), 458–465.CrossRefGoogle Scholar
  46. Kaplan, S. N., & Strömberg, P. (2001). Venture capitalists as principals: Contracting, screening and monitoring. American Economic Review Proceedings, 91(2), 426–431.CrossRefGoogle Scholar
  47. Keeley R. H., & Roure J. B. (1989). Determinants of new venture success before 1982 and after a preliminary look at two eras. Frontiers of Entrepreneurship Research, 274–287.Google Scholar
  48. Kim, M., & Hunter, J. (1993). ‘Attitude-behavior’ relations: A meta-analysis of attitudinal relevance and topic. Journal of Communication, 43(1), 101–142.CrossRefGoogle Scholar
  49. Kirzner, I. (1973). Competition and entrepreneurship. Chicago: University of Chicago Press.Google Scholar
  50. Knockaert, M., Lockett, A., Clarysse, B., & Wright, M. (2006). Do human capital and fund characteristics drive follow-up behaviour of early stage high tech VCs? International Journal of Technology Management, 34(1–2), 7–27.CrossRefGoogle Scholar
  51. Kortum, S., & Lerner, J. (2000). Assessing the contribution of venture capital to innovation. The Rand Journal of Economics, 31(4), 674–693.CrossRefGoogle Scholar
  52. Lam, S. (1991). Venture capital financing: A conceptual framework. Journal of Business Finance and Accounting, 18(2), 137–149.CrossRefGoogle Scholar
  53. Lefkowitz, J. (2000). The role of interpersonal affective regard in supervisory performance ratings: A literature review and proposed causal model. Journal of Occupational and Organizational Psychology, 73, 67–85.CrossRefGoogle Scholar
  54. Lerner, J. (1999). The government as venture capitalist: The long-run impact of the SBIR program. Journal of Business, 72(3), 285–318.CrossRefGoogle Scholar
  55. Lichtenthal, J. D., & Tellefsen, T. (2001). Toward a theory of business buyer–seller similarity. Journal of Personal Selling and Sales Management, 1, 1–14.Google Scholar
  56. Lockett, A., Murray, G., & Wright, M. (2002). Do UK venture capitalists still have a bias against investment in new technology firms. Research Policy, 31, 1009–1030.CrossRefGoogle Scholar
  57. Lockett, A., Siegel, D., Wright, M., & Ensley, M. (2005). The creation of spin-off firms at public research institutions: Managerial and policy implications. Research Policy, 34, 981–993.CrossRefGoogle Scholar
  58. MacMillan, I. C., Kulow, D. M., & Khoylian, R. (1989). Venture capitalists involvement in their investments: Extent and performance. Journal of Business Venturing, 4, 27–47.CrossRefGoogle Scholar
  59. MacMillan, I. C., Siegel, R., & Subbanarashima, P. N. (1985). Criteria used by venture capitalists to evaluate new venture proposals. Journal of Business Venturing, 1, 119–128.CrossRefGoogle Scholar
  60. MacMillan, I. C., Zemann, L., & Subbanarashima, P. N. (1987). Criteria distinguishing successful from unsuccessful ventures in the venture screening process. Journal of Business Venturing, 2, 123–137.CrossRefGoogle Scholar
  61. Manigart, S., Waele, K., Wright, M., Robbie, K., Desbrieres, P., Sapienza, H., et al. (2002). Determinants of required return in venture capital investments: A five-country study. Journal of Business Venturing, 17(4), 291–312.CrossRefGoogle Scholar
  62. Martin, R., Sunley, P., & Turner, D. (2002). Taking risks in regions: The geographical anatomy of Europe’s emerging venture capital market. Journal of Economic Geography, 2(2), 121–154.CrossRefGoogle Scholar
  63. Mason, C., & Harrison, R. (2004). Does investing in technology-based firms involve higher risk? An exploratory study of the performance of technology and non-technology investments by business angels. Venture Capital, 6(4), 313–332.CrossRefGoogle Scholar
  64. Moray, N., & Clarysse, B. (2005). Institutional change and resource endowments to science-based entrepreneurial firms. Research Policy, 34(7), 1010–1027.CrossRefGoogle Scholar
  65. Murray, G. (1999). Early-stage venture capital funds, scale economies and public support. Venture capital, 1(4), 351–384.CrossRefGoogle Scholar
  66. Murray, G., & Lott, J. (1995). Have venture capitalists a bias against investment in new technology firms? Research Policy, 24, 283–299.CrossRefGoogle Scholar
  67. Muzyka, D., Birley, S., & Leleux, B. (1996). Trade-offs in the investment decisions of European venture capitalists. Journal of Business Venturing, 11, 273–287.CrossRefGoogle Scholar
  68. Nelson, R. (2001). Observations on the post Bayh-Dole rise in patenting at American universities. Journal of Technology Transfer, 26, 13–19.CrossRefGoogle Scholar
  69. Oakey, R. (1984). Finance and innovation in British small independent firms. International Journal of Management Science, 12, 113–124.Google Scholar
  70. OECD. (2002). Benchmarking industry science relations. Paris: OECD.Google Scholar
  71. Pavitt, K. (2000). Why European union funding of academic research should be increased: A radical proposal. Science and Public Policy, 27(6), 455–460.CrossRefGoogle Scholar
  72. Pfeffer, J., & Salancik, G. (1978). The external control of organizations: A resource dependence perspective. New York: Harper & Row.Google Scholar
  73. Sahlman, W. (1990). The structure and governance of venture-capital organizations. Journal of Financial Economics, 27(2), 473–521.CrossRefGoogle Scholar
  74. Schefczyk, M., & Gerpott, T. J. (2001). Management support for portfolio companies of venture capital firms: An empirical study of German venture capital investments. British Journal of Management, 12, 201–216.CrossRefGoogle Scholar
  75. Shane, S., & Stuart, T. (2002). Organizational endowments and the performance of University Start-ups. Management Science, 48(1), 154–161.CrossRefGoogle Scholar
  76. Shepherd, D., Zacharakis, A., & Baron, R. (2003). VCs’ decision processes. Evidence suggesting more experience may not always be better. Journal of Business Venturing, 18(3), 381–401.CrossRefGoogle Scholar
  77. Sweeting, R., & Wong, C. (1997). A UK hands-off venture capital firm and the handling of post-investment investor-investee relationships. Journal of Management Studies, 34(1), 125–152.CrossRefGoogle Scholar
  78. Tajfel H. (1982). Social identity and intergroup relations. New York.Google Scholar
  79. Tyebjee, T. T., & Bruno, A. V. (1984). A model of VC investment activity. Management Science, 30, 1051–1066.CrossRefGoogle Scholar
  80. Van de Velde, E., Clarysse, B., & Wright, M. (2008). Entrepreneurial origin, technology endowments and the growth of spin-off companies, Working Paper: Imperial College.Google Scholar
  81. Vanaelst, I., Clarysse, B., Wright, M., Lockett, A., Moray, N., & S’Jegers, R. (2006). Entrepreneurial team development in academic spinouts: An examination of heterogeneity. Entrepreneurship Theory and Practice, 30(2), 249–271.CrossRefGoogle Scholar
  82. Westhead, P., & Storey, D. (1995). Financial constraints on the growth of high technology small firms in the United Kingdom. Applied Financial Economics, 7, 197–201.CrossRefGoogle Scholar
  83. Wiklund J., Davidsson P., & Delmar F. (2003). What do they think and feel about growth? An expectancy-value approach to small business managers’ attitudes toward growth. Entrepreneurship Theory and Practice, 27(3), 247–270.CrossRefGoogle Scholar
  84. Wood, R., & Bandura, A. (1989). Social cognitive theory of organizational management. Academy of Management Review, 14(3), 361–384.CrossRefGoogle Scholar
  85. Wright, M., Clarysse, B., Lockett, A., & Knockaert, M. (2008). Mid-range universities’ linkages with industry: Knowledge types and the role of intermediaries. Research Policy, 37(8), 1205–1223.CrossRefGoogle Scholar
  86. Wright, M., Lockett, A., Clarysse, B., & Binks, M. (2006). University spin-out companies and venture capital. Research Policy, 35(4), 481–501.CrossRefGoogle Scholar
  87. Wright, M., & Robbie, K. (1998). Venture capital and private equity: A review and synthesis. Journal of Business Finance and Accounting, 25(5/6), 521–570.CrossRefGoogle Scholar
  88. Wright, M., Vohora, A., & Lockett, A. (2004). The formation of high tech university spinout companies: The role of joint ventures and venture capital investors. Journal of Technology Transfer, 29, 287–310.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  • Mirjam Knockaert
    • 1
    • 2
  • Mike Wright
    • 1
    • 3
  • Bart Clarysse
    • 1
    • 4
  • Andy Lockett
    • 5
  1. 1.University of GhentGhentBelgium
  2. 2.Centre for EntrepreneurshipUniversity of OsloBlindern, OsloNorway
  3. 3.Centre for Management Buy-out ResearchNottingham University Business SchoolNottinghamUK
  4. 4.Imperial College London Business SchoolLondonUK
  5. 5.University of Nottingham, Nottingham University Business SchoolNottinghamUK

Personalised recommendations