Saturday, July 17, 2010

10 reasons university start-ups fail

One of our FPC members, Bill Greener of BS&K, sent the item below to me. I found it interesting and thought you might also. The factors listed below could well apply to any startup, not just spinouts from universities. Two other FPC member organizations -- the UCF Venture Lab (http://www.venturelab.ucf.edu/) and the UCF Business Incubator (http://www.incubator.ucf.edu/) -- are designed to help entrepreneurs deal with startup issues and avoid the problems that can lead to failure. And the recent new program, GrowFL (http://www.growfl.com/) is designed to help second-stage companies achieve their full potential.

Jim Pearson

FPC Executive Director

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Writing on his blog, Beyond the First World, Terry Young, president emeritus of AUTM, describes the responses he received to a survey of 40 tech transfer professionals representing a cross section of the industry, including CEOs of tech transfer service companies, university TTO managers, start-up executives, researchers, and patent officials. Thirty-six individuals responded to Young’s single question, “What are the top three reasons for failure of university start-up companies?” Instead of using a survey form, participants were encouraged to respond with their own comments. “This ‘survey’ was not proposed or promoted as a scientific survey in any manner,” Young explains. “Rather, it was a free-form attempt to learn from experts their opinions regarding the reasons for the failure of university start-up companies.” Factors cited by respondents include:

1. Management failure (22 mentions).

2. Failure to raise sufficient capital (15 mentions).

3. Innovation does not meet a commercial need (12 mentions).

4. Geography (7 mentions).

5. Cultural factors (6 mentions).

6. Government laws, bureaucracy, and programs (6 mentions).

7. Infighting within the start-up team (6 mentions).

8. Problems with IP (6 mentions).

9. Poor business plan (5 mentions).

10. Unrealistic expectations (4 mentions).

For the full report, go to

Source: Beyond the First World

Posted July 14th, 2010 under Tech Transfer

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