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Designing Contracts for University Spin-offs

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Author Info

  • Macho-Stadler Inés

    ()
    (AUTONOMOUS UNIVERSITY OF BARCELONA CATHOLIC UNIVERSITY OF LEUVEN)

  • Pérez-Castrillo David

    ()
    (AUTONOMOUS UNIVERSITY OF BARCELONA)

  • Veugelers Reinhilde

    ()
    (AUTONOMOUS UNIVERSITY OF BARCELONA CATHOLIC UNIVERSITY OF LEUVEN)

Abstract

We provide a theoretical model for designing academic spin-off contracts between the university Technology Transfer Office (TTO), the researcher and the venture capitalist. The optimal contract entails the allocation of founder shares to the researcher to secure her participation in the venture, and it may also require the researcher to be financially involved in the project to give her incentives to provide effort. We prove that, when this happens, there may be overinvestment in the spin-off. Finally, we show that when the TTO has more accurate information than the other two participants concerning the likelihood of success of the spin-off, the TTO will signal profitable projects by taking financial stakes. Hence, theTTO will end up owning both founder and financial shares in the venture.

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Bibliographic Info

Paper provided by Fundacion BBVA / BBVA Foundation in its series Working Papers with number 201071.

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Length: 50
Date of creation: Apr 2007
Date of revision:
Handle: RePEc:fbb:wpaper:201071

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Related research

Keywords: Spin-offs; design of contracts; innovation; universities.;

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Cited by:
  1. Macho-Stadler, Inés & Pérez-Castrillo, David, 2010. "Incentives in university technology transfers," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 362-367, July.
  2. David Grosse Kathoefer & Jens Leker, 2012. "Knowledge transfer in academia: an exploratory study on the Not-Invented-Here Syndrome," The Journal of Technology Transfer, Springer, vol. 37(5), pages 658-675, October.
  3. Färnstrand Damsgaard, Erika & Thursby, Marie, 2012. "University Entrepreneurship and Professor Privilege," Working Paper Series 909, Research Institute of Industrial Economics, revised 12 Apr 2012.
  4. Dechenaux, Emmanuel & Thursby, Jerry & Thursby, Marie, 2011. "Inventor moral hazard in university licensing: The role of contracts," Research Policy, Elsevier, vol. 40(1), pages 94-104, February.
  5. Banal-Estanol, A. & Macho-Stadler, I., 2008. "Commercial Incentives in Academia," Working Papers 08/13, Department of Economics, City University London.
  6. Козырев А.Н. & Неволин И. В., 2013. "Применение Алгоритма Решения Задачи Об Оптимальном Распределении Ресурсов К Проблеме Назначения Цены За Ис�," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 49(3), pages 57-68, июль.
  7. Joanna Poyago-Theotoky, 2009. "University-industry technology transfer options: licensing or research joint venture?," Economics Bulletin, AccessEcon, vol. 29(4), pages 2582-2591.

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