What Can We Learn from Academic Spin-Off Failures? Insights from Five Case Studies

Today's academic literature on new technology-based firms is rather growth and success-oriented, despite the fact that many valuable lessons can be learned from failures. This study aims at contributing to our understanding of failure processes by documenting five case studies of spin-offs that originated from European universities. Within the framework of the resource-based view of the firm and social capital theory, the venture's resource base is used as a central element in explaining the failures through the presence or absence of certain resources or by inappropriate application. The analysis mainly illustrated the negative influence of the lack of a champion, poor market development, the absence of market(ing) experience in the venture team and an unbalanced shareholder structure. The relatively small financial base seems rarely to be the main issues in the failure process.