Original Research - Special Collection: Creating value through entrepreneurial learning

The role of investors in developing academic spin offs: The biotech sector in South Africa

Øystein S. Høvig S. Høvig, Inger B. Pettersen, Adolph C. Neethling, Brandon Paschal, Randi E. Taxt
The Southern African Journal of Entrepreneurship and Small Business Management | Vol 15, No 1 | a738 | DOI: https://doi.org/10.4102/sajesbm.v15i1.738 | © 2023 Øystein S. Høvig, Inger B. Pettersen, Adolph C. Neethling, Brandon Paschal, Randi E. Taxt | This work is licensed under CC Attribution 4.0
Submitted: 31 March 2023 | Published: 28 November 2023

About the author(s)

Øystein S. Høvig S. Høvig, Mohn Centre for Innovation and Regional Development, Faculty of Engineering and Science, Western Norway University of Applied Sciences, Bergen, Norway
Inger B. Pettersen, Mohn Centre for Innovation and Regional Development, Faculty of Engineering, Western Norway University of Applied Sciences, Bergen, Norway
Adolph C. Neethling, Department of Business Management, Faculty of Economic and Management Sciences, Stellenbosch University, Stellenbosch, South Africa
Brandon Paschal, Cadence Lyfe Consulting, Stellenbosch, South Africa
Randi E. Taxt, Department of Geography, University of Bergen, Bergen; and, Vestlandets innovasjonsselskap AS, Bergen, Norway

Abstract

Background: While research on commercialisation of academic research suggests that close interaction among academic entrepreneurs, technology transfer officers and investors can aid developing academic spin-offs, we argue that the role of investors is underdeveloped in the literature.

Aim: This paper aims to build new theoretical and empirical knowledge about the investor’s role in developing academic spin-offs. Focus is put on the interaction and dynamic relationship between investors, academic entrepreneurs and technology transfer office executives in academic spin-off (ASO) development.

Setting: The research is empirical in nature and conducted in the entrepreneurial ecosystem surrounding universities in the Western Cape area in South Africa.

Methods: The research is qualitative with a focus on conducting research interviews with knowledgeable respondents. Fourteen semi-structured interviews were used to collect data from investors and other stakeholders in the entrepreneurial ecosystem in the Western Cape area in South Africa.

Results: Four themes were uncovered. The study demonstrates a challenge of commercialising research-based inventions; both the team and the entrepreneur play an important role in the commercialisation process; investors can play a role in educating and coaching academic entrepreneurs and play a brokering role in attracting venture capital (VC) funding.

Conclusion: The study concludes that the pre-investment behaviour of investors, in relationship with technology transfer offices (TTOs) and academic entrepreneurs, may help mitigate assumed information asymmetries and uncertainty in ASO development.

Contribution: The research contributes to the literature by showing how investors’ perception, pre-investment behaviour and vision shape the development of ASOs in a dynamic interaction with technology transfer executives and academic entrepreneurs.


Keywords

investors; university funds; technology transfer; entrepreneurial ecosystem; academic spin-off; commercialisation of research; biotech; South Africa

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