spin-off formation across europe

-1 -© Prof. dr. Bart Clarysse

Spin-off formation across Europe

Prof. Dr. Bart Clarysse


Data sources available at the European Commission

• Under the form of studies– DG Enterprise (formerly DG XIII)

• EIMS 98/176 -- Corporate Venturing in Europe

• EIMS 98/177 -- Growth paths of NTBF’s

– DG III - Industry• IPTS -- Corporate spin-offs

– DG XII - Technology• SEISTI 99/*** -- study on the quantification of

spin-offs


• Under the form of data sources– CORDIS - AMPERE– Data on all participators in the FP’s– Problems

• definition of SME

• small part of the phenomenon


Definitional problems

• Institutional spin-offs– Research Organisations– International Organisations

• University based spin-offs

• Corporate spin-offs– MBO’s– Research Based spin-offs


Research based Spin-offs?

Initiative of researcher

Initiative ofentrepreneur

Student

Push spin-off Pull spin-off

A. C.

B.

Based on Surlemont et al. (1999)


Example on Belgian data

0

5

10

15

20

25

30

Number

KU

L

UL

G

RU

G

UC

L

VU

B

Imec

UL

B

LU

C

Nam

ur

VIB

Gem

blou

x

UA

University


Why data are biased?

• Universities use “spin-off” data as negotiation/promotion material

• Overlap between cited spin-offs (eg. IMEC-KUL in Belgium)

• Complexity of the phenomenon– Longitudinal variation– Confusion about the definition (see previous)


0

5

10

15

20

Number

University of Ghent

Total

Real spin offs

Spin-offs as promotional material


0

1

2

3

4

5

6

7

8

9

Year

Percentage

Moving average of spin-offsfounded per year

Spin-off generations in Europe


History of spin-offs

• First generation spin-offs (till the late eighties)

– most companies follow the traditional SME model– those that do not have a direct international link– entrepreneurs are “normally” international business

people– few of these companies (10-20%) are growth oriented– they have different organisational models

• biotech companies go into diagnostics, bulk chemicals, ...


• Second generation of spin-offs (late eighties-mid nineties)

– Legitimacy of VC backed firms as organisational form

– Publicly financed VC funds– Private/Public initiatives (electronic markets)– Science Parks– Incubator Centers– Creation of second generation start-ups– Not very much changes for the early years


• Third generation start-ups (mid-90s - now)

– various seed capital funds are formed• France, Belgium, the Netherlands, Germany

– universities become interested in the phenomenon

– paradox of money

– no real coaching


INSTITUTIONAL FACTORS

> 40 mio start capitalexperienced product managerprofessional interdisciplinary boardclear product market

5-15 mio start capitalFounder = managerNo clear product market

BIG

SMALL

Technical uncertainty prevails

Market uncertainty prevails

RESOURCE BASED THEORY

Consulting Focus

R&D Focus

Value Creation

Contract R&D

Learning driven

Sales driven

Become a big project

Become acquired

Become acquired

Become a big project

First to market

Market creation


Conclusions

• The role of seed capital/funds?

• The role of intermediaries revisited?

• Spin-offs as a sub-population among the high tech, potentially high growth companies

spin-off formation across europe

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