Over the past three decades, universities in industrialized countries have become increasingly active as venture capital financiers. Here, we analyze if investments in university-affiliated portfolio companies, in the form of an institutional-personal relation between the university and the founders, are a commercially successful investment proposition. We use a hand-collected data set of 706 university portfolio companies in the United States and the United Kingdom to extend previous case-based evidence that investments in faculty- and student-led start-ups are an elusive promise that rarely pays off commercially. Furthermore, we provide evidence that geographic proximity to a top venture capital ecosystem is a highly performance-relevant characteristic for university investors.
Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies (CEFS)
Technische Universität München - Center for Entrepreneurial and Financial Studies
Technische Universität München (TUM) - TUM School of Management; Center for Entrepreneurial and Financial Studies