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 ( and the UCF Business Incubator ( -- are designed to help entrepreneurs deal with startup issues and avoid the problems that can lead to failure. And the recent new program, GrowFL ( is designed to help second-stage companies achieve their full potential.

Jim Pearson

FPC Executive Director


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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