University Spin-Off’s Seed Capital: An Empirical Study from Demand Perspectives

This study aims to enrich our knowledge of the influences of capabilities and social networks of entrepreneurial teams have on the engagement of external supporters in seed investments by exploring academic entrepreneurial teams. This paper explores capabilities and social networks of entrepreneurial teams in Spanish university spin-offs using quantitative data analysis. Basing upon resource-based view theory of Barney (1991) to study capabilities of the entrepreneurial teams, the research employ entrepreneurial technology, strategy, human capital, organizational viability, and commercial resources (Vohora et al., 2004). To study social networks of entrepreneurial teams, this study employs the conceptual model of Hoang and Antoncic (2003) to study the characteristics of social networks. The results from an examination of the sample of 181 Spanish university spin-offs demonstrate that by exploiting social networks an entrepreneurial team can shape its capabilities, which in turn improve its ability to access external seed investments. Thus, the paper has implications for universities in training and policy development to support spin-off’s activity, especially to build entrepreneurial teams with capabilities to pitch to the focused seed capital providers. This study addresses a fundamental question to contribute to the theory-based understanding of university spin-offs: What make financial supporters engage in seed investments?