Do venture capitalists have a bias against investment in academic spinoffs? Evidence from the micro and nanotechnology sector in the UK

We provide empirical evidence to resolve the dilemma about the existence of a VCs’ bias against investments in academic spin-offs. We also investigate the nature of university spin-offs to capture the heterogeneity at the base of differences in their ability to attract VC funding. Finally, we examine whether their valuation varies between private and public VC firms. Our results on a sample of 247 spin-offs in the micro and nanotechnology sector in the UK reject the presence of the bias, highlighting the importance of the IPRs and the university’s scientific prestige in the academic spin-off’s ability to access to VC financing. Also, different investing behaviours are pointed out among VCs, with a stronger attention given by private VCs to the benefits deriving from academic-industrial collaborations.