Venture capital financing of techno-entrepreneurial start-ups: Drivers and barriers for investments in research-based spin-offs in the Dutch medical life sciences industry

With their exploitation of knowledge, technology and research results, techno-entrepreneurial spin-offs play an important role in the knowledge economy (Clarysse and Moray, 2004; Scholten, 2006). Of special importance are the start-ups and spin-offs in the biotechnology industry (together with the pharmaceuticals and medical devices part of the medical life sciences industry), which ëis one of the most booming industries at the beginning of the twenty-first centuryí (Patzelt and Brenner, 2008, p. 1). However, spin-offs/small and medium-sized enterprises (SMEs) in the medical life sciences particularly face difficulties attracting venture capital or other types of funding (Hall and Hofer, 1993; Nlemvo et al., 2002; Clarysse et al., 2005, 2007; Lockett and Wright, 2005; Lockett et al., 2005; Wright et al., 2006; Meuleman and De Maeseneire, 2012). While attracting funding is already difficult for high-tech spin-offs in general, medical life sciences spin-offs face specific funding problems. According to Patzelt and Brenner (2008, p. 2) ëmany bioentrepreneurial firms fail before they bring any product to the marketí, as the medical life sciences industry is one of the riskiest and most money-consuming industries in the modern economy. This is due to the need for large amounts of funding, combined with other industry specific characteristics such as low fixed asset ratios, complex product development cycles and high technological, market and regulatory uncertainties (Whitehead, 2002; Baeyens et al., 2006; Patzelt and Brenner, 2008).