This project examines the role of venture capitalists (VCs) as disseminators of knowledge in the cluster of high-technology businesses that have spun off from research undertaken at the University of Southampton UK. The analysis was inspired by work of Zook on the Internet industry in the San Francisco Bay area of the US. This research suggested that it was not just the amount of venture capital that was available in the region that led to its prominence but also the technical and commercial acumen on the part of the local VCs that gave their investees a key advantage in the Internet industry. In contrast, this study of Southampton spin-outs found no equivalent cluster-based infrastructure spreading technical knowledge. The knowledge spread by UK VCs tended to consist of business advice, the evaluation of commercial strategy and the recruitment and scrutiny of key company personnel. Despite many recent initiatives in the UK, many start-up firms reported a relative shortage of experienced early-stage investors who were willing and able to act as ‘company builders’. The results suggest that while investors in the Southampton case provide valuable general business and commercial knowledge, there is little evidence that they supply specialist and tacit knowledge via strong relational partnerships. In the context of some of the difficulties and ambiguities pertaining to spin-out experiences with venture capital, the paper documents how a University has turned to an institutionalised partnership with an intellectual property commercialisation fir
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