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Taking Leaps of Faith: Evaluation Criteria and Resource Commitments for Early-stage Inventions

Author

Listed:
  • Kristof Coussement

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Sebastian Fourné
  • Phillip H Kim
  • Reddi Kotha

Abstract

Successfully developed academic inventions have the potential to spawn new technological domains, form the basis of thriving business ventures, and improve the well-being of society. However, evaluating whether an early-stage scientific invention truly has such potential is extremely difficult, and financially backing such inventions is highly risky. And yet, organizations and their evaluators still back some of these inventions with resources for further development. We investigate this puzzle to pinpoint how and why evaluators decide to offer resource commitments at early stages, despite the red flags raised using standard evaluation criteria. Many academic inventions need these initial resources to dispel concerns regarding their commercial feasibility, so evaluators need to take a leap of faith with their support to prematurely avoid eliminating high-potential opportunities. We tested our theory using text analysis on nearly 700 invention evaluation reports written by a university's technology transfer experts. Our results revealed that evaluators backed inventions based on their feasibility (overcoming doubt and assessing maturity) and desirability (background familiarity and scientific complexity). Using the context of the research laboratory, our study insights can be applied to many management situations in which early-stage opportunities are assessed for resource commitments under high uncertainty.

Suggested Citation

  • Kristof Coussement & Sebastian Fourné & Phillip H Kim & Reddi Kotha, 2019. "Taking Leaps of Faith: Evaluation Criteria and Resource Commitments for Early-stage Inventions," Post-Print hal-02114126, HAL.
    • Handle: RePEc:hal:journl:hal-02114126
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    Citations

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    Cited by:

    1. Kim, Young-Choon & Kotha, Reddi & Rhee, Mooweon, 2024. "Do firms with technological capabilities rush in? Evidence from the timing of licensing of Stanford inventions," Journal of Business Research, Elsevier, vol. 178(C).
    2. Matthews, Lane & Heyden, Mariano L.M. & Zhou, Dan, 2022. "Paradoxical transparency? Capital market responses to exploration and exploitation disclosure," Research Policy, Elsevier, vol. 51(1).
    3. Buffart, Mickaël & Croidieu, Grégoire & Kim, Phillip H. & Bowman, Ray, 2020. "Even winners need to learn: How government entrepreneurship programs can support innovative ventures," Research Policy, Elsevier, vol. 49(10).
    4. Fourné, Sebastian P.L. & Rosenbusch, Nina & Heyden, Mariano L.M. & Jansen, Justin J.P., 2019. "Structural and contextual approaches to ambidexterity: A meta-analysis of organizational and environmental contingencies," European Management Journal, Elsevier, vol. 37(5), pages 564-576.
    5. Natalya Vinokurova & Rahul Kapoor, 2020. "Converting inventions into innovations in large firms: How inventors at Xerox navigated the innovation process to commercialize their ideas," Strategic Management Journal, Wiley Blackwell, vol. 41(13), pages 2372-2399, December.
    6. Igors Skute, 2019. "Opening the black box of academic entrepreneurship: a bibliometric analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 120(1), pages 237-265, July.
    7. Wesley II, Curtis L. & Kong, Dejun Tony & Lubojacky, Connor J. & Kim Saxton, M. & Saxton, Todd, 2022. "Will the startup succeed in your eyes? Venture evaluation of resource providers during entrepreneurs' informational signaling," Journal of Business Venturing, Elsevier, vol. 37(5).

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