Analysis of setups and investment processes within university affiliated venture capitals : A descriptive multi-case study

Sammanfattning: With the increasing importance of the third mission of universities, namely the commercialisation of science and research, universities have established various mechanisms such as technology transfer offices, business incubators and more. Since many investors tend not to invest in university spin-offs and start-ups due to the risk associated with their early stage, universities have established their own investment units, referred to as university-affiliated venture capital, to provide funding for university spin-offs and start-ups. As there is little academic research on the structure and functioning of these investment units, this paper contributes to this research by analysing the structure and investment process of university-affiliated venture capitals. For this purpose, 10 investment units in Denmark, Finland, the Netherlands, Norway, and Sweden were analysed. Among the key findings of this work is the recognition that UVCs essentially look for the abilities ofthe founders and the possibility of developing them into an effective team when selecting ventures. Inaddition, the financing instruments offered, and the ticket sizes of the investment units could be identified. While many UVCs use both equity investment and convertible loans, there is a slight bias towards convertible loans as the potential target companies are at such an early stage that valuations are very difficult to conduct and the UVCs have limited resources. Ticket sizes generally vary between 25,000 and 100,000 thousand euros.