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Understanding the role of venture capitalists in knowledge dissemination in high-technology agglomerations: a case study of the University of Southampton spin-off cluster

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  • Steven Pinch
  • Peter Sunley

Abstract

This project examines the role of venture capitalists (VCs) as disseminators of knowledge in the cluster of high-technology businesses that have spun off from research undertaken at the University of Southampton UK. The analysis was inspired by work of Zook on the Internet industry in the San Francisco Bay Area of the US. This research suggested that it was not just the amount of venture capital that was available in the region that led to its prominence but also the technical and commercial acumen on the part of the local VCs that gave their investees a key advantage in the Internet industry. In contrast, this study of Southampton spin-outs found no equivalent cluster-based infrastructure spreading technical knowledge. The knowledge spread by UK VCs tended to consist of business advice, the evaluation of commercial strategy and the recruitment and scrutiny of key company personnel. Despite many recent initiatives in the UK, many start-up firms reported a relative shortage of experienced early stage investors who were willing and able to act as ‘company builders’. The results suggest that while investors in the Southampton case provide valuable general business and commercial knowledge, there is little evidence that they supply specialist and tacit knowledge via strong relational partnerships. In the context of some of the difficulties and ambiguities pertaining to spin-out experiences with venture capital, the paper documents how a university has turned to an institutionalised partnership with an intellectual property commercialisation firm.

Suggested Citation

  • Steven Pinch & Peter Sunley, 2009. "Understanding the role of venture capitalists in knowledge dissemination in high-technology agglomerations: a case study of the University of Southampton spin-off cluster," Venture Capital, Taylor & Francis Journals, vol. 11(4), pages 311-333, March.
    • Handle: RePEc:taf:veecee:v:11:y:2009:i:4:p:311-333
    DOI: 10.1080/13691060902972885
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    Cited by:

    1. Becsky-Nagy, Patrícia, 2013. "Growth and venture capital investment potential for university spin-offs in Hungary," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 7(4-5), pages 1-8.
    2. Becsky Nagy Patricia, 2014. "Growth And Venture Capital Investment In Technology-Based Small Firms The Case Of Hungary," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 828-836, July.
    3. Del Sarto, Nicola & Cruz Cazares, Claudio & Di Minin, Alberto, 2022. "Startup accelerators as an open environment: The impact on startups’ innovative performance," Technovation, Elsevier, vol. 113(C).
    4. Tanweer, Syeda Zainab & Shah, Muhammad Saud & Nabi, Agha Ammad & Mukhi, Aftab Ali & Ahad, Muhammad, 2023. "Accelerating Growth: Unleashing the Power of Accelerator Programs as Strategic Investments for Startups in Pakistan," MPRA Paper 117474, University Library of Munich, Germany, revised 28 May 2023.
    5. Nicola Del Sarto & Giulio Ferrigno & Vinit Parida & Alberto Minin, 2023. "Do start-ups benefit from coworking spaces? An empirical analysis of accelerators’ programs," Review of Managerial Science, Springer, vol. 17(7), pages 2471-2502, October.
    6. Yannis Pierrakis & George Saridakis, 2019. "The role of venture capitalists in the regional innovation ecosystem: a comparison of networking patterns between private and publicly backed venture capital funds," The Journal of Technology Transfer, Springer, vol. 44(3), pages 850-873, June.
    7. Stefano Poponi & Alessio Maria Braccini & Alessandro Ruggieri, 2017. "Key Success Factors Positively Affecting Organizational Performance of Academic Spin-Offs," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 14(05), pages 1-18, October.
    8. Pierrakis, Yannis & Saridakis, George, 2017. "Do publicly backed venture capital investments promote innovation? Differences between privately and publicly backed funds in the UK venture capital market," Journal of Business Venturing Insights, Elsevier, vol. 7(C), pages 55-64.

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