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Agency and similarity effects and the VC's attitude towards academic spin-out investing
Knockaert, Mirjam Clarysse, Bart Wright, Mike Lockett, Andy
Knockaert, Mirjam
Clarysse, Bart
Wright, Mike
Lockett, Andy
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Publication Type
Working paper
Editor
Supervisor
Publication Year
2008
Journal
Book
Publication Volume
Publication Issue
22
Publication Begin page
Publication End page
Publication NUmber of pages
29
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Abstract
In this paper, we study which VC firm and investment manager related factors drive the VC’s attitude towards academic spin-out investing by taking an agency and human capital perspective. In order to do so, we use a unique hand-collected dataset involving 68 investment managers working at early stage VCs in Europe who were interviewed and provided us with information on the fund characteristics and their human capital. First, the results show that academic spin-out investors work to a large extent at publicly funded VCs that often engage in a very hands-on type of post-investment behaviour. Second, the results show that human capital is associated with the willingness of the investment manager to invest in academic spin-outs. Investment managers that had worked in an academic environment and thus have similar human capital compared to the academic founders were more inclined to invest in academic spin-outs. Other specific human capital, such as technical education, and general human capital were not found to be associated with the investment manager’s interest in academic spin-out investing, except for the amount of entrepreneurial experience that negatively affected the attitude towards academic spin-outs.