When Stars Shine: the Effects of Faculty Founders on New Technology Ventures

Despite the increasing importance of faculty entrepreneurship to technology diffusion, wealth creation, and economic growth, we know little about the effects that academic faculty turned entrepreneurs have on the performance of new technology ventures. We argue faculty inventors select their most promising projects for commercialization. We further posit that star faculty founders have positive effects on new venture performance, above and beyond that of the average faculty founder. In addition, we develop two contingency hypotheses to unearth specific situations when ‘stars shine.’ We posit that star faculty founders are able to overcome geographic distance to venture capitalists as well as the disadvantages of not being affiliated with a top research university. We test our hypotheses on a broad sample of 238 universityrelated new technology ventures at 65 U.S. universities. Copyright © 2012 Strategic Management Society.