Critical junctures in the development of university high-tech spinout companies

This paper investigates the development of university spinout companies (USOs). Employing a case-based research method, our study found that there are two important elements in their development. First, USOs go through a number of distinct phases of activity in their development. Each venture must pass through the previous phase in order to progress to the next one but each phase involves an iterative, non-linear process of development in which there may be a need to revisit some of the earlier decisions and activities. Second, at the interstices between the different phases of development we found that ventures face "critical junctures" in terms of the resources and capabilities they need to acquire to progress to the next phase. The different phases are critical as these ventures cannot develop into the next phase without overcoming each of the junctures. We identify four different critical junctures that spinout companies need to overcome if they are to succeed: opportunity recognition, entrepreneurial commitment, credibility and sustainability. (C) 2003 Elsevier B.V. All rights reserved.