Internal funding, debt and external equity: which of these effectively improve the growth of University Spin-Offs?

The paper aims to explore the impact of different financing sources on the growth of University Spin-Offs (USOs). It hypothesizes that both internal finance and debt finance have little to no positive effect on the growth of USOs. Whereas, equity finance is expected to have a stronger positive impact, especially in the form of Private Equity/Venture Capital. A panel sample of 621 Italian USOs was investigated over the 2004-2013 period. The results show a small positive impact from internal funding on USOs growth. Debt funding seems to have no impact, while external equity finance has a weak role, even when obtained from Venture Capital/Private Equity. The findings provide evidence that the USOs have financial constraints limiting their growth.