Science-Based Entrepreneurial Firms as Real Options: Assessing the Outcomes of the Norwegian Firm Population from 1995 to 2012

Process Approach to Academic Entrepreneurship: Evidence from the Globe, Forthcoming

21 Pages Posted: 12 Nov 2016

See all articles by Marius Tuft Mathisen

Marius Tuft Mathisen

Norwegian University of Science and Technology (NTNU)

Einar Rasmussen

Nord Universtiy

Date Written: November 7, 2016

Abstract

Science-based entrepreneurial firms (SBEFs) that are set up to commercialize knowledge created in universities and other public research institutions typically face long development paths. They develop new products and services associated with high levels of technological, market, and organizational uncertainties. Despite strong interest from policy makers and universities to promote the creation of SBEFs, there is little systematic evidence on the value creation patterns and potential impacts of these firms. By using a real options approach, this study provides a detailed assessment of the portfolio of all 471 SBEFs supported by technology transfer offices, incubators and science parks in Norway from 1995 to 2012. By following an entire portfolio of firms over an extensive period of time, we overcome some of the shortcomings of prior spin-off research. The findings reveal that 97 firms in the portfolio had reached what could be considered a successful outcome, 126 had failed, while the remaining 251 may still be considered as real options with an uncertain outcome. Acquisitions appear to be an important mode of successful outcomes for these ventures; an outcome currently underexplored in the literature. The chapter concludes with implications for policy makers seeking to maximize the value creation potential of spin-offs from academic institutions.

Keywords: Academic Entrepreneurship, Real Options, Firm Outcome, University Spin-Offs, University Spin-Outs, Firm Performance, Performance Distribution, Trade Sales, Technology Acquisitions, Commercialization, Technology Transfer, RBSO, SBEF, USO, ASO

JEL Classification: L26, L25, L24, L11

Suggested Citation

Mathisen, Marius Tuft and Rasmussen, Einar, Science-Based Entrepreneurial Firms as Real Options: Assessing the Outcomes of the Norwegian Firm Population from 1995 to 2012 (November 7, 2016). Process Approach to Academic Entrepreneurship: Evidence from the Globe, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2865897

Marius Tuft Mathisen (Contact Author)

Norwegian University of Science and Technology (NTNU) ( email )

Høgskoleringen
Trondheim NO-7491, 7491
Norway

Einar Rasmussen

Nord Universtiy ( email )

Post Office Box 1490
Bodø, Nordland 8049
Norway

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