The perceptions of the relationship with venture capitalists by managers of university spin-out firms in the Life Science industry in the UK and Germany

This study examines the relationship between managers of University Spin-Out firms (USOs) and Venture Capital investors (VCs) in the Life Science industries in Germany and the UK. Much extant research has focused upon the perceptions of VCs, rather than the ones of USOs and has largely ignored their perceptions on conflicts and VCs’ valueadding activities over time and in multi-party relationships. To address these gaps, this study collected data from in total 24 managers of USOs in the UK and Germany via semi-structured in-depth interviews. The data was analysed by the use of the Gioia method (Gioia, Corley and Hamilton, 2013), involving several stages of coding and iterations between stages. The study makes three main findings. First, it found that time has an impact on how positive the relationship with VCs is perceived by the participants, which changes with the national context. Second, it found that conflicts occur mostly in multi-party scenarios, within several dimensions and involve various resolution strategies. Third, it found three forms of value-adding activities to be particularly appreciated, which are strategic advice, financial support and the provision of networks for further fundraising. Another form of involvement by VCs, operational support, was perceived ambiguously. This thesis contributes to the field of VC research by developing a conceptual framework on USOs’ perceptions on VCs’ value-adding activities and conflicts with them for future studies, which incorporates the concept of multi-party conflicts and changing perceptions over time. The conceptual framework is built upon the findings of this study and previous works by several other authors in the field. Second, it introduces a new theory to the field of VC research, namely social dilemma theory, which is seen to hold the explanatory power for the phenomenon of cooperation as the dominant conflict resolution strategy in multi-party conflicts.