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.