Do graduated university incubator firms benefit from their relationship with university incubators?

Abstract

Business incubators have become a popular policy option and economic development intervention tool. However, recent research shows that incubated firms may not benefit significantly from their incubator relationships, and may even be more vulnerable to failure post departure (graduation) from an incubator. These findings suggest that the impact of business incubation on new venture viability may be contingent on the type of support offered by an incubator and attributes of business environments within which incubation services are provided. Incubation services that protect and isolate ventures from key resource dependencies may hinder venture development and increase subsequent vulnerability to environmental demands. Alternatively, incubation services that help ventures connect and align with key resource dependencies are likely to promote firm survival. We propose that incubators vary in the services and resources they offer, and that university incubators typically provide greater connectivity and legitimacy with respect to important contingencies associated with key industry and community stakeholders. This leads us to propose that university affiliation is an important contingency that affects the relationship between firms' participation in incubators and their subsequent performance. The purpose of this study is to evaluate this contingency by examining whether firms graduating from university incubators attain higher levels of post-incubation performance than firms participating in non-university affiliated incubators. We test this by evaluating the performance of a sample of graduated firms associated with the population of university-based incubators in the US contrasted against the performance of a matched cohort of non-incubated firms. The analysis uses an enhanced dataset that tracks the number of employees, sales, and the entry and graduation (departure) points of incubated firms from a university incubation program, so as to delineate the scope of influence of the incubator.& Vernet Lasrado

Business incubators and accelerators: a co-citation analysis-based, systematic literature review

“…They find support for their hypotheses that a university link reduces probability of new venture failure, but retards the firm's graduation from the incubator. Lasrado et al (2016) investigate whether firms graduating from university incubators attain higher levels of post-incubation performance than firms participating in non-university affiliated incubators do. Results show that university incubated firms do indeed benefit from their relationship with university incubators.…”

Have you been served? The impact of university entrepreneurial support on start-ups’ network formation

“…217). These resources matter, as Lasrado et al (2016) found university incubated firms outperformed a matched sample of non-university incubated firms in terms of employment and sales.…”

“…New firms with greater access to network capital are better able to innovate and acquire knowledge through securing resources that enable them to develop and succeed (Aldrich et al , 1987Hoang & Antoncic 2003;Huggins & Thompson 2015;Tello et al 2012). ESOs such as incubators foster this access as membership provides new ventures with connectivity to other firms (Lasrado et al 2016) and act as a "mechanism for embedding the company in (entrepreneurial) networks" (Bøllingtoft 2012, pp. 304).…”

“…Although there is an assumption that ESOs play an important role in supporting new ventures in building network ties (Lasrado et al 2016), our understanding of the mechanisms supporting tie formation among members of the same organization is scant. Despite this wealth of knowledge on incubators and business networks we find limited empirical work investigating the mechanisms that enable member entrepreneurs to establish and grow a network of business relationships within an incubator.…”

Pós-incubação de empresas de base tecnológica: um estudo de caso sobre o efeito da incubadora nos padrões de crescimento

“…Despite the key function of incubation being to assist future entrepreneurs in establishing their businesses, post-incubation success is not a given (Mas-Verdú et al, 2015). Recent research has suggested that incubated firms may not benefit considerably from their relationship with their incubators and may even become more vulnerable to failure after graduation (Lasrado et al, 2016).…”