Funding Sources and Exit Modes in Academic Entrepreneurship: A Role Conflict Perspective

We investigate how academic entrepreneurs who maintain their primary paid jobs at academic institutions while engaging in entrepreneurial activities differ from other entrepreneurs in choosing funding sources and exit modes. We suggest that academic entrepreneurs prefer to exit through acquisitions instead of initial public offerings to mitigate the role conflict arising from competing academic and industrial institutional logics. We also argue that ventures founded by academic entrepreneurs are more likely than other ventures to receive funding from corporate venture capital investors because such investment relationships can help them achieve their preferred exit mode of acquisition by effectively disclosing the value of their technological resources to potential acquirers. We test our arguments using a sample of U.S. medical device ventures.

JEL CLASSIFICATION: L26; M13; G24