Venture Capital–University Interface: Best Practices to Make Maximum Impact

Abstract:     
As hotbeds for techno­logical innovation, university research labs create groundbreaking innovations that have been at the heart of many successful entrepreneurial ventures. But powerful ideas do not neces­sarily beget successful companies; great ideas must be identified, acquired, and developed into successful businesses using a unique blend of skills. Venture capital funds exist in part to perform this valuable - and lucrative - role in the economy. But finding the next big idea is not as straightforward as discover­ing an inventor at a lab bench. A range of practical, personal, and legal hurdles must be cleared before an idea can begin to transform into a start-up company.

With these common hurdles in mind, we conducted ninety-four in-depth interviews with geographically and commercially diverse venture capitalists to better understand the relationship between the academic and venture capital communities: what motivates the various stakeholders, which are the most pressing problems facing university - venture relations, and what can be done to improve the process for everyone involved.

Although many factors play into start-up success, five main focus areas emerged for universities looking to improve the university-investor interface: under­standing investor motivations, supporting entrepreneurs, streamlining bureaucracy, improving access and visibility, and foster­ing a culture of innovation on campus.

Keywords: entrepreneurship, entrepreneur, universities, venture capital, investor, start-up, technology transfer, technology, commercialization, new venture, innovation, early stage, capital, business development, higher education, economic development, spin-offs, spinouts, financing, faculty, valley of death

JEL Classifications: G24, L14, L31, O31, O32, M13, D23, E22, I22, J23, J24,

Accepted Paper Series