Reveal or Conceal? Signaling Strategies for Building Legitimacy in Cleantech Firms

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The role of the top management team and board in academic spin-offs

This report addresses the under-studied area of the role of the top management team and board of directors in the development of academic spin-off companies originating from universities and public research institutes. The questions addressed are as follows: • What are the distinctive team and board characteristics associated with successful academic spin-offs and what we can learn from this? (Section 5). • How can public government programs that aim to stimulate academic spin-off formation be designed, in order to take into account the important aspects of human capital in these firms? (Section 6). The findings show that boards in successful academic spin-off firms add value by bringing in necessary resources that the management team lacks. Additions of outside directors to the board are associated with a positive firm development. Larger and more active networking boards facilitate the recruitment of new people to the top management team. The board chair’s personal networks are important when finding new potential board members. Effective teams have members with diverse functional experience and industrial backgrounds. This diversity is associated with the firm’s ability to recruit new members to the management team and attract venture capital financing. The probability of attracting venture capital financing is also higher when an academic spin-off has previously received seed and industry capital financing. We recommend that policy makers develop policies that support the needs of academic spinoff firms to find professional outside directors. We also recommend that seed funds could make more investments in academic spin-offs and that more industrial schemes could be designed to stimulate greater involvement of industrial actors in academic spin-offs

Board of Directors, Top Management Team and the Developmentof Academic Spin-Off Companies

This dissertation addresses the under-studied area of the role of the top management team (TMT) and board of directors in the development of academic spin-off companies (ASOs) originating from public research institutes. ASO research receives growing attention internationally following the rise in commercialization activities in the vast majority of universities. The studies identify the barriers to and facilitators of ASO formation and growth, which are related to faculty attributes and incentives, university technology transfer policies and practices, and the external environment. Few studies examine the founding team demonstrating that it evolves in to a TMT and board during legal incorporation and that the TMT heterogeneity has significant performance consequences. Even fewer studies investigate the board in ASOs. This is surprising since well-networked outside directors may contribute to ASO development by increasing a firm’s legitimacy and thus reducing liabilities of newness and providing access to critical external resources that young ASOs need to survive. In this dissertation I therefore contribute by addressing this research gap and I explore the board formation and changes in board composition and try to relate these changes to the development stages of an ASO. Given limited prior research on board dynamics I employ an inductive multiple case research design. I also examine the role of the board in accessing needed external managerial resources and how the board and TMT themselves can be valuable resources that help an ASO to achieve the important entrepreneurial milestone of acquiring venture capital. For these studies the data on 135 ASOs in Norway are collected and analyzed using logistic regression. I find that the dynamics of the development stages in an ASO is related to the dynamics of its board. In successful ASOs the board contribution is dynamic. The board chair’s social networks seem to be essential when attracting key members to the board of an ASO. Key board members bring in needed resources that the TMT lacks, ranging from finance and industry experience in earlier stages to executive and marketing/sales experience in later development stages. Thus, they help an ASO to prove a venture’s viability and approach a stage of sustainable returns. Board size and networking appear to be important when recruiting new TMT members with necessary competences who open for new growth opportunities. ASOs that have value adding boards and TMT members with diverse functional and industry backgrounds succeed in recruiting new team members and acquiring venture capital. The likelihood of attracting venture capital increases if ASOs have previously managed to receive seed capital and support from industrial partners

Exploring Board Formation and Evolution of Board Composition in Academic Spin-offs

An in-depth analysis of eleven cases is used to provide insight into the neglected area of the dynamics of boards in academic spin-offs. Drawing on stage-based, resource dependence and social network theories, we explore board formation and changes in board composition occurring in Norwegian and US spin-offs. We find that these theories are important complements to earlier research on boards in technology-based new ventures. The process of board formation is mainly driven by social networks of the founders. Although we find differences in the initial board compositions in Norwegian and US spin-offs, there is convergence over time in subsequent board changes, which are mainly driven by the social networks of the board chair. Additions of key board members are associated with the progress of a spin-off developing from one stage to another. Several avenues for future research and implications are discussed

Factors Affecting the Development of Clean-tech Start-Ups: A Literature Review

In this paper, we carry out a literature review of the studies investigating the factors that affect the performance and growth of clean technology start-up firms. The importance of clean-tech start-ups lies in their mission to protect the environment by facilitating the increased use of clean energy and environmentally friendly solutions. At the same time, the entrepreneurial nature of many of these firms enables introduction of radical innovations necessary for making breakthroughs in the industries of renewable energy and environmental technology that in turn are essential for the industry development. Given their significance, there are surprisingly few studies with the focus on the factors affecting the growth of clean-tech start-ups. Our search in leading management, entrepreneurship and energy journals has yielded a total of 13 articles, almost all of which focus on such external factors as policies. We argue that this gives us an incomplete picture of the factors enabling a clean-tech firm's development. As clean-tech firms are a subset of the population of new technology-based firms (NTBFs), we draw on the literature dealing with the factors that promote growth of NTBFs in order to build our framework for structuring the results. The analysis uncovers what future research areas can be pursued in order to gain a more balanced understanding of what enables the development of a clean-tech start-up. We suggest that in addition to the macro-studies of policies and regulations, future research needs to examine the individual and firm-specific factors, e.g. characteristics of the clean-tech entrepreneurs, teams, governance mechanisms and network structures. Furthermore, the existing focus on the environmental and innovative performance of clean-tech start-ups should be complemented by examining the alternative firm outcomes related to e.g. financial performance, social identity, alliance portfolio and internationalization

Reveal or Conceal? Signaling Strategies for Building Legitimacy in Cleantech Firms

New entrants in technology-intense industries are in a race to build legitimacy in order to compete with established players. Legitimacy has been identified as a driver of venture survival and growth; it helps mitigate third-party uncertainty and so facilitates access to resources, engagement with customers and other stakeholders. Nevertheless, we know little about how legitimacy is built and how new entrants build legitimacy in complex technology-intensive industries. In this research we explore how Norwegian cleantech firms use signaling and strategic actions to build legitimacy. We analyze five cases while investigating their actions in different phases of the venture’s evolution. The results suggest that, contrary to signaling theory expectations, young clean-tech firms do not always build legitimacy by conveying information on their strengths. Instead, we observe that they use signaling strategies to address the specific concerns of different stakeholders. This is very much contingent upon the evolutionary stage of the venture and the firm’s current weaknesses. View Full-Tex

A Subjectivist Approach to Team Entrepreneurship

Many scholars have pointed to Austrian subjectivism as an appropriate framework for understanding and studying entrepreneurship. Yet very few empirical studies in the field of entrepreneurship have applied a subjectivist lens. This research article responds to calls for more subjectivist entrepreneurship research by theoretically refining and empirically extending the subjectivist approach to team entrepreneurship. The findings presented in this study, which are based on data from 124 high-tech start-ups founded in Norway, suggest that positive internal and external team dynamics contribute to team effectiveness, as measured by the lead entrepreneur’s subjective assessment of his or her team. Implications for theory and practice are discussed

Kvinne og toppleder: Hvilke faktorer fremmer en lederkarriere?

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