When Do Employees Become Entrepreneurs?

Stanford GSB Research Paper No. 1770

Sauder School of Business Working Paper

61 Pages Posted: 11 Jun 2002

See all articles by Thomas F. Hellmann

Thomas F. Hellmann

University of Oxford - Said Business School; University of Oxford - Said Business School

Abstract

Many new firms are started by entrepreneurs who got the idea while working for their previous employer. Sometimes employers also agree to develop their employees' ideas internally. This paper develops a multi-task incentives model to analyze optimal corporate strategies towards employee innovations. The model explains when employees become entrepreneurs (sometimes even involuntarily); when they become intrapreneurs, managing internal ventures; when they become managers of a corporate spin-off; and when they are denied all of these options. Important determinants for these choices are the allocation of intellectual property rights, and the availability of outside resources, such as venture capital.

JEL Classification: M13, L2, O3, D23, G31

Suggested Citation

Hellmann, Thomas F., When Do Employees Become Entrepreneurs?. Stanford GSB Research Paper No. 1770; Sauder School of Business Working Paper. Available at SSRN: https://ssrn.com/abstract=315159 or http://dx.doi.org/10.2139/ssrn.315159

Thomas F. Hellmann (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

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