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Signaling in academic ventures: the role of technology transfer offices and university funds

Author

Listed:
  • Paolo Gubitta

    (University of Padova)

  • Alessandra Tognazzo

    (University of Padova)

  • Federica Destro

    (University of Padova
    Fondazione Filarete per le Bioscienze e l’Innovazione)

Abstract

University spinoffs, an important subset of high-tech start-up companies, operate in a context characterized by marked information asymmetries that limit their chances of obtaining financing. Given the uncertainty and imperfect information that characterize these investment opportunities, signals about their potential value deserve further attention. We investigate the relationship between the main stakeholders involved in the process of creating a university spinoff—that is, the academic founders, the university technology-transfer office, and private investors—focusing on the role of public grants as effective signals that attract private venture capital (VC) funding. Using the database of all spinoff companies established to exploit inventions assigned to the University of Michigan from 1999 to 2010, we determine how the funds provided through the university technology-transfer office influence VC follow-on funding and consequent spinoff growth, controlling for the spinoff’s technology, the founders’ human capital, and the network’s resources. The empirical results support a signaling effect of the commercialization funds provided by the university and suggest an indirect impact on the growth of the spinoff’s sales through the mediating effect of VC financing.

Suggested Citation

  • Paolo Gubitta & Alessandra Tognazzo & Federica Destro, 2016. "Signaling in academic ventures: the role of technology transfer offices and university funds," The Journal of Technology Transfer, Springer, vol. 41(2), pages 368-393, April.
    • Handle: RePEc:kap:jtecht:v:41:y:2016:i:2:d:10.1007_s10961-015-9398-7
    DOI: 10.1007/s10961-015-9398-7
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    More about this item

    Keywords

    University spinoff financing; Venture capital; Technology-transfer office; Funding gap; Signaling theory;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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