From the lab to the stock market? The characteristics and impact of university-oriented seed funds in Europe

This work investigates the role of university and PRO-oriented seed funds (USFs)— VC funds with an explicit mission to make investments in academic spin-offs and support technology transfer—as instruments for addressing funding gaps and facilitating the commer- cialization of academic technologies. We first offer an overview of USFs in Europe, highlighting their heterogeneity and principal characteristics. Second, we exploit a unique data set of 1,497 start-ups (including 733 USF-backed start-ups and another 764 start-ups backed by other VC funds) to analyze how USF-backed companies perform in terms of exit rates, staging, and syndication levels when compared with non-USF-backed companies. Empirical evidence sug- gests that USF-backed companies perform better in staging and syndication but worse in exit rates. Moreover, our analyses show that, within the group of USF-backed companies, the ones that can attract more follow-on funding and investors are those financed by USFs that are internally managed by a universities/PROs and are linked to universities with high scientific rankings.