Growing fast or slow?

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Amsterdam University of Applied Sciences

Growing fast or slow?

understanding the variety of paths and the speed of early growth of entrepreneurial

science-based firms

Miozzo, Marcela; DiVito, Lori

DOI

10.1016/j.respol.2016.01.011

Publication date

2016

Document Version

Final published version

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Citation for published version (APA):

Miozzo, M., & DiVito, L. (2016). Growing fast or slow? understanding the variety of paths and

the speed of early growth of entrepreneurial science-based firms. Research policy, 45(5),

964-986. https://doi.org/10.1016/j.respol.2016.01.011

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ContentslistsavailableatScienceDirect

Research

Policy

j ou rn a l h om epa g e :w w w . e l s e v i e r . c o m / l o c a t e / r e s p o l

Growing

fast

or

slow?:

Understanding

the

variety

of

paths

and

the

speed

of

early

growth

of

entrepreneurial

science-based

ﬁrms

Marcela

Miozzo

a,∗

_,

_Lori

_DiVito

b,c

a_Manchester_Institute_of_Innovation_Research,_Manchester_Business_School,_The_University_of_Manchester,_Booth_Street_West,_Manchester_M15_6PB,_UK b_Manchester_Business_School,_The_University_of_Manchester,_Booth_Street_West,_Manchester_M15_6PB,_UK

c_Amsterdam_School_of_{International}_Business,_Amsterdam_University_of_Applied_Sciences,_{Fraijlemaborg}_133,₁₁₀₂_CV_Amsterdam,_The_Netherlands

a

r

t

i

c

l

e

i

n

f

o

Articlehistory:

Received23May2014

Receivedinrevisedform14January2016 Accepted18January2016

Availableonline22February2016 Keywords: Growthoftheﬁrm Penrose Science-basedﬁrm Institutions Signal Biotechnology

a

b

s

t

r

a

c

t

Thepaperexplorestheprocessofearlygrowthofentrepreneurialscience-basedfirms.Drawingoncase studiesofBritishandDutchbiopharmaceuticalR&Dfirms,weconceptualizethespeedofearlygrowth ofscience-basedfirmsasthetimeittakesfortheassembly(orcombineddevelopment)ofthreetypes ofcriticalresources—afunctionally-diversemanagementteam,earlyfundraisinganddevelopmentof technology.Thedevelopmentoftheseresourcesisanunfoldingandinterrelatedprocess,thecausal directionofwhichishighlyambiguous.Weshowthevarietyofpathsusedbyscience-basedfirmsto accessanddevelopthesecriticalresources.Thepicturethatemergesisthatthevariouscombinationsof whatwecall“assisted”and“unassisted”pathscombinetoinfluencethespeedoffirmgrowth.Weshow howawiderangeofmanifestationsoftechnologydevelopmentactassignalingdevicestoattractfunding andmanagement,affectingthespeedoffirmdevelopment.Wealsoshowhowthevarietyofpathsand thespeedofdevelopmentareinfluencedbythenationalinstitutionalsetting.

1. Introduction

Thegrowthofscience-basedfirmsisakeyfactorindiscussions onhoweconomiescommercializeandbenefitfromtheeconomic impactofscienceandinnovation(Casper,2007)andonthe tech-nologytransferprocess(DiGregorioandShane,2003).Inparticular, thespeedofgrowthofsuchfirmsisimportantgiventheamount anddurationoffundingrequiredandthetechnological complex-ityanduncertaintyfacedbythesefirms.Moreover,thewindowof opportunityforsuchfirmstoexploitscientificandtechnological discoveriesisconstantlyshrinkingduetoknowledgespilloversto competitorsandcompetitionfromotherscientificdiscoveries.

Thispaperexploresthespeedofearlygrowthofentrepreneurial science-basedﬁrms.Recentstudieshaveinvestigatedhow high-techﬁrmsgrow,adoptingavarietyofperspectives.Forexample, studieshaveexploredthesequenceofarchetypesinventure evo-lution from an organizational theory perspective (Ambos and Birkinshaw,2010), the links between thecompetitive environ-mentandresourcemanagementindifferentmodesofgrowthfrom a resource-basedview (Clarysse et al., 2011), and the simulta-neousexperimentationand varietyin businessmodelsfroman

∗ Correspondingauthor.Tel.:+441613063423.

E-mailaddresses:marcela.miozzo@mbs.ac.uk(M.Miozzo), lori.divito@mbs.ac.uk(L.DiVito).

organizationallearning perspective(Andriesetal.,2013).While thesecontributions have provided important insightsinto how theseﬁrmsgrow,whydifferentgrowthpatternsexist,the impor-tanceofresourceconﬁgurations,andtheeffectofthe(competitive) environmentongrowth,theydonotaddressdirectlythespeedof growth.

Thespeedofgrowthofnewscience-basedfirmsisan interest-ingempiricalphenomenoninitsownright,butparticularlybecause establishedtheoriesofinnovationmanagementofferlimited guid-ance.Thus,itsstudyoffersanopportunityfortheorydevelopment. Botheconomicsandmanagementofinnovationliteratureshave examinedspeedinconnectiontoinnovation.Economicsof inno-vationscholarshave exploredeconomic growthasa processof transformationdrivenbyinnovation,focusingoninnovation pat-terns, technological spillovers and divergence across firms and countries(NelsonandWinter,1982;Dosietal.,1988).Theconcern withspeed in this literatureregards therateat which innova-tionisdiffused throughoutfirms,sectors,regionsand countries (Mansfield,1961;Perez,1983;vonTunzelmann,1995).

For themanagement of innovationliterature,instead, speed referstotherateat which discoveriesareconverted into rent-producingassets,asrapidexploitationofsuchopportunitiescan give rise to ﬁrst-mover advantages or other temporary rents. Contributionsexploretheimportanceofdecision-making speed (Eisenhardt, 1989; Forbes,2005);the time period betweenthe founder’sleavingofacademiaandtheestablishmentofhis/herﬁrm

http://dx.doi.org/10.1016/j.respol.2016.01.011

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(Muller,2010);thetimingofstart-upactivitiesfordifferenttypesof founders(AlsosandKolvereid,1998);thecommercializationtime ofpatent-protectedtechnologiesbyuniversitytechnologytransfer ofﬁces(Markmanetal.,2005);andthetime-to-marketof innova-tiveproductsbyﬁrmsofdifferentcharacteristics,especiallythose withventurecapital(HellmanandPuri,2000;Sternitzke,2010).

Whilethesestrands areusefulin shapingourwork,we still knowrelativelylittleabouttwoquestions:Howdoesfastgrowth ofscience-basedfirmsoccur?Howisspeedofearlygrowthshaped bytheinstitutionalsetting?Addressingthesequestionscallsfor fine-grained insights into the process of development of new science-basedfirms,throughacomparativemultiple-casestudy. Weconducted60interviewswithfoundersandexecutive man-agers in18 Britishand 17 Dutchbiopharmaceutical R&Dfirms. Thesefirms provideeitherR&D-intensive services,forinstance, platformtechnologiessuchas geneticsequencing,or they con-ductR&Dwiththegoalofdevelopingfutureproductssuchasnew therapeuticdrugsordiagnostickits.Wealsodrawoninterviews with14supportingorganizations,press releasesand articlesin tradejournals.Fromthisrichdataemergedanunderstandingof thenatureofthepathsandspeedofearlygrowthofscience-based firms.

Wederivefourkeyfindings.First,weconceptualizethespeed of earlygrowth ofscience-based firms asthe time it takes for theassembly (orcombineddevelopment) of thethree typesof criticalresources—afunctionally-diversemanagementteam,early fundraisinganddevelopmentoftechnology.Thedevelopmentof managerialcompetence,earlyfinanceandtechnologyisan unfol-dingandinterrelatedprocess,thecausaldirectionofwhichishighly ambiguous.Forsomefirms,havingaccesstomanagerial compe-tencefacilitatesexternal fundraising,and, in contrast,forother firms,raisingexternalfinancingfacilitatestherecruitmentof man-agerialcompetence.Second,weshowthevarietyofpathsusedby science-basedfirmstoaccessanddevelopcriticalresources.The picturethatemergesisthatthevariouscombinationsofwhatwe call“assisted”and“unassisted”pathsleadtodifferentspeedsof development.Third,weshowthatthevarietyofpaths(andspeed) ofearlygrowthofscience-basedfirmsisinfluencedbythenational institutionalsetting. Wefinda markeddifferencein therole of intermediaries,especiallythesupportofventurecapitaland tech-nologytransferofficesin enablingthesepaths.Inenvironments wheretheseareavailableandstrong,theperiodoftimeittakesfor founderstodevelopafunctionally-diversemanagementteamand raisefundsisshorter.Fourth,weshowtheimportanceofawide rangeofmanifestationsoftechnologicaldevelopmentthatactas signalingdevicesandinterveneintheearlyfirmgrowthprocess, havingbothpositiveand/ornegativemediatingeffectsinattracting bothfundingandmanagement.

We provide next the theoretical framework. After that we describetheresearchdesignanddataanalysis.Wethenpresent theﬁndings.Adiscussionandconclusionfollow.

2. Theoreticalframework:Approachestoexploringthe earlygrowthofscience-basedﬁrms

First,weexplorethepeculiaritiesofscience-basedﬁrms,which make itnecessary tosinglethem outfor a studyof theirearly growth. Second, we drawon the work of Penrose (1959) and resource-basedperspective topositionourapproach. Third,we explorehowthe(national)institutionalsettingaffectstheaccess anddevelopmentofﬁrmresources.

2.1. Thephenomenon:Whyentrepreneurialscience-basedfirms? Entrepreneurialscience-basedfirmsingeneral(and biophar-maceutical R&Dfirmsin particular)havepeculiaritiesthatmay

setthemapartfrom(other)high-techfirmsintheirearlygrowth. First, entrepreneurial science-based firms typically emerge as researchspin-offsfromacademicdepartmentsorindustrialfirms (Mustar et al., 2006; Knockaert et al., 2011; Rasmussen et al., 2011),andtheytendtobelocatednearuniversities,withwhich they collaborate intensively. In the case of academic spin-offs, theacademic/scientificinventors(oftenthefounders)are essen-tial to the continuing success of the firm not only because of theirown scientific expertise but also because of access to their networks of academic scientists which facilitate flows of complextechnicalknowledge,enablingfirmstomeettheir tech-nological milestones (Kenney, 1986; Liebeskind et al., 1996; Murray, 2004; Owen-Smith and Powell, 1998; Zucker et al., 1998).

AsecondpeculiarityisthattheR&Dprocessinentrepreneurial science-based firms is different from that of (other) high-tech firms.While high-techfirmsusesciencetodevelop innovation, science-basedfirmsare engagedintheadvancementof science itself (Autio, 1997). Theynot onlyface market, but also scien-tific or technologicaluncertainty, astheir main assetsare R&D projectsinemergenttechnologies.Forscience-basedfirms,R&D is aboutsuccessively reducing uncertaintythrough the acquisi-tion ofinformation (selectingand screening), a highlyiterative and inductive process (Pisano, 2006).In (most) high-tech ven-tures,afterconception anddevelopment,thereisamovetothe commercializationstagewhere thefocusis onlearninghow to makeaproductworkwellandhowtoproduceitbeyondthefirst stage prototype(Kazanjian, 1988). Science-basedfirms, in con-trast,donottypicallydevelopaprototypeduringtheearlygrowth stage.

Third,science-basedﬁrmshaveveryhighcapitalrequirements for long term R&D. They often lack complementary capabili-ties in clinicaltesting, regulatoryprocesses, manufacturingand distributionor marketing. Theyneed toraise largeamounts of externalﬁnancefromprivateinvestors,institutionalinvestorsor publicofferingsofequityforproductsthattakemanyyears (typ-ically 10–15 years in the biopharmaceuticalindustry) to reach themarket (if at all) and in many cases cannot relyon a pro-gressive revenue stream.Theyoftenrely onventurecapital for fundraising.

Venturecapitalisnotonlyafundingsourcebutalsoa gover-nancestructure,whichinvolvesknowledgeableinvestorscapable ofprovidingcomplementaryassetstogeneratevalue.Venture cap-italhasimplicationsforcontrolandmayconstraintheactivities of science-basedfirms.It requires developed exitmarkets(and thereforeasuitableinstitutionalsetting).Venturecapitalisa gov-ernancearrangementdeveloped(andarguablymoresuitable)for otherhigh-techfirms,becauseithasarathershortexithorizon(3–5 years)comparedtothelongproductdevelopmenttimerequiredby science-basedfirms(Pisano,2006).Analternativetoventure cap-italfinancingfornewscience-basedfirmsistoenterintostrategic allianceswith,oracquisitionsby,establishedfirms.Thisalternative mayofferthefundingorcapabilitiesinclinicaltesting,regulatory processes,manufacturing,distributionormarketingthattheylack (Powelletal.,1996).Earlygrowthofscience-basedfirmsmay there-forebeinfluencedbytheextenttowhichtheyarepositionednot onlyinthe“marketforproducts”,butalsointhe“marketfor (tech-nology)assets”asaninputintothedevelopmentofproductsby other,morematurecorporations(andincludingasapossible tar-getforacquisitionbythese)(Colomboetal.,2010;Miozzoetal., 2016).

There is great diversity among science-based ﬁrms themselves. Nevertheless, the above suggests that science-based ﬁrms face particular organizational and technological challenges that merit an examination of their early growth.

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2.2. Penrosean-inspiredapproachtowardstheearlygrowthof science-basedﬁrms

Manystudiesofﬁrmgrowthadoptaresource-based perspec-tive,followingPenrose’s (1959)seminal contribution.We build onfouranalyticalinsightsfromPenrose’sworkandcontributions inspiredinherworkforouranalysisofgrowthofnew science-basedﬁrms.

Thefirstinsightisregardingtheorganizationallimitstofirm growth.InPenrose’swork,firmsconsistofhumanandnon-human resources, under administrative coordination and integration. Human,andespeciallymanagerial,resourcesarethemost impor-tant,butafirm’suniquenessderivesfromthedistinctionbetween itsresourcesandtheservicesthatthoseresourcescanprovide.Even thoughindividualsmayholdcriticalresources,thefirm’s organiza-tionalchoicesdeterminewhetherandhowindividualresourcesare translatedintoorganizationalcompetence,whicheventuallylead toafirm’ssuperioreconomicposition(BestandGarnsey,1999;Kor andMahoney,2004;Lockett,2005;NelsonandWinter,1982).

In this framework, differentservicesare required for differ-entactivitiesorstagesoffirmgrowth.Forexample,thetype of entrepreneurial/managerialservicesneededtoraisefundsare dif-ferentfromthetypeofservicesneededtorunafirmefficiently. Theraisingofcapitaldependsontheentrepreneur’s(orfounding team’s)abilitytocreateconfidence,and, asfirmsgrow,there is moreemphasisonthe“administrativeintegration”ofthe produc-tiveresourcesunderthefirm’scontrol(Lazonick,2002).

Unusedproductiveservicesprovideexcesscapacity,and this excesscapacitycreatesaninternalmechanismforgrowthofthe firm,buttherearemanageriallimitstofirmexpansion(Penrose, 1959).Innewfirms,thefoundersarethemainprovidersof man-agerialservices,whichresideintheirtacitknowledgeandpersonal investmentinthefirm’songoingviability.Bringingoutside man-agers (other than venturecapital investors) tosupplement the originalentrepreneurialteammayconstituteadistractionifthey bringonlygeneralbusinessexpertiseandlackfirm-specifictacit knowledge(Krolletal.,2007).Existingmanagersmusttrainnew managers,thedevelopmentandintegrationofwhomrequirethe servicesofincumbentmanagers(Pettus,2001).Inotherwords, managerialresources withexperiencewithin thefirm are nec-essary for the efficient absorption of managers from outside. Nevertheless,becausethesmallnumberofincumbentmanagers haslimitedavailability,thereisaconstraintintheamountof expan-sionthatcanbeplannedandundertakeninanyperiodoftime.

Asecondinsightistheeffectofuncertaintyonthedevelopment ofthefirm’sresourcesforgrowth.Anumberofcontributionshave exploredtheresourcesrelevantforthegrowthofentrepreneurial high-tech firms—technological resources (specific products and processes) (Clarysse et al., 2011; Mustar et al., 2006), human resources (knowledge, skills and entrepreneurial experience of thefounder and/or foundingteam) (Mosakowski, 1998), social resources(industryandfinancialtiesandcontacts)(Khaire,2010) andfinancialresources(amountandtypeoffinance)(Leeetal., 2001).Inthecontextofscience-basedfirms,wherethereisstrong uncertainty,“observable”resourcescanactassignalsofqualityfor investors.Patents(grantedandapplied)andresearchalliancesare arguedtoattractmoreprominentventurecapitalfundsorinitial publicoffering(IPO)andhigherfunding(Audretschetal.,2012; Contietal.,2013;Haussleretal.,2014).This“signaling”effect how-evermaydiminishinsequentialroundsoffunding(Hoenenetal., 2014;HsuandZiedonis,2013).

Theuncertaintyconnectedtoscience-basedﬁrmsdoesnotonly arisefromthetechnology,butalsofromtheabilitiesofthe man-agementteam.Founders’experiencein foundingprior ventures andsocialnetworkalsoactassignals,increasingthelikelihoodof attractingventurecapital(Burtonetal.,2002;ClarysseandMoray,

2004;Hsu,2007).Functionally-diverseteamswithmanagement experienceanddiversepriorafﬁliationshavepositiveeffects on obtainingventurecapitalandgoingpublic(Beckmanetal.,2007; Certo,2003).

Athirdinsightisthatdifferentresourcessupportdifferent pro-ductionbases. Penrosean-inspired analysesarguethat although therecanbearangeofobjective“productiveopportunities”open totheﬁrm,theirrecognitionissubjective(DruilheandGarnsey, 2004)anddependsonaccesstospecialknowledge.Moreover,risk anduncertaintyplayaveryimportantrole,astheymakethe man-agerialtaskmoredifﬁcult,requiringmoreskillsoragreatervariety ofmanagerialservicesforexpansion(Penrose,1959).

Akey pointis thatasfirms grow,theyaccumulatedifferent resources,includingstaffandmaterialresources,andthatthe het-erogeneity of those resources meansthat theycan be used in differentways.Theseresourcescansupportdifferent“production bases”(eachtypeofproductiveactivitythatusesmachines, pro-cesses,skillsandrawmaterialsthatarecomplementaryandclosely related)(Penrose,1959,p.109),associatedwithdifferent techno-logicalcharacteristics.Amoveintoanewbaserequiresthefirm tobuildcompetencein a differentareaof technology(Penrose, 1959).Thetypeof“productive opportunities”choseninfluences theresourcerequirements,includingtheneedfor new partner-shipsorcollaborationstoenterintonewtechnologyfields(Druilhe andGarnsey,2004;GarnseyandLeong,2008).

Fourth, growth follows a non-linear, iterative process. The movementfromemergencetoearlygrowthischaracterizedby thedevelopmentofnewresourceconfigurations.Garnsey(1998) showsthattheearlygrowthphaseofnewfirmsisdominatedby searchactivities,theinitialproblemscenteringontheperception ofopportunitiesandresourcingprospects.Inthisphase,the rela-tionsbetweenfoundersandotherorganizations,suchasformer associatesandfunders,arekey.Accesstofinanceiscrucialatthis earlystage,andconvincingfundersoftheprospectsfortheir ven-tureiscriticaltoidentifyingopeningsbeyondtheentrepreneurs’ immediatemeans.Garnsey(1998)arguesthatsuccessindoingso reflectsinstitutionalarrangementsforinvestinginnewventures.

Similarly,HiteandHesterley(2001)explorethemovementof firms fromemergence toearly growthand argue that, as they transition,firmsfaceproblemsofresourceacquisition,including availability,accessibilityanduncertainty.Theydefineearlygrowth as“thepoint inthefirm lifecycleatwhich a firmmakesclear strategicdecisionstointentionallygrowbeyondmeresurvival, via-bility,orsufficiency”(p.277).Theyarguethat,inthetransitionto earlygrowth,firmsneedtoaccessanddevelopagreaterscopeof resources.Also,Sirmonetal.(2011)showthatresource orchestra-tiondiffersineachstageofthefirmlifecycle.Intheemergence stage, which is characterized by experimentation in accessing resources,managersmakeasubstantialcontributiontothe ven-ture.Inearlygrowth,overcomingearlydeficienciesbecomesthe mainconcern,requiringthedevelopmentofrelationstodistinctive stakeholderssuchasfinancerstofostergrowth.

Tosumup,a“Penrosean”-inspiredapproachtoexaminingthe earlygrowthprocessoffirmsconcludesthat:(1)thereare organi-zationallimitstofirmgrowth;(2)uncertaintyaffectsearlyfirm growth; (3) differenttypes of resources support different pro-ductionbases,associatedwithdifferenttechnologies;and(4)the transitionfromemergencetogrowthrequiresadifferent config-urationofresources.Nevertheless,theoreticalandempiricalwork onhowfastgrowthofscience-basedfirmsoccursisstilllacking. 2.3. Influenceoftheinstitutionalsetting

Mostofthecontributionsreviewedabovearebasedonan exam-inationofUSﬁrms,manyofwhicharelocatedinCalifornia’sSilicon Valley.Inthisregion,manageriallabor,andtheknowledgeintrinsic

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inthatlabor,ishighlymobile,contributingtoincreasedknowledge diffusion(Saxenian,1994;AlmeidaandKogut,1999).Venture cap-italisalsoparticularlyabundantcomparedtootherregions,having emergedoutoftheregion’sbaseofhigh-techenterprises.Venture capitalistsareunusuallyknowledgeable andinvolved withnew ventures,e.g.givingadviseonbusinessplans,findingco-investors, recruitingmanagersandservingonboardsofdirectors.The insti-tutionalsettingofthesestart-upsisuniqueandhighlyconducive totheemergenceandgrowthofscience-basedfirms.Weexpect thatotherinstitutionalsettingswillaffectdifferentlythestrategic choicesoffoundersintheearlygrowthofsuchfirms.

Literatureoncomparativecapitalisms(HallandSoskice,2001; HollingsworthandBoyer,1999;Whitley,1999)explorestheeffects oftheinstitutionalsettingontheproductionstrategiesoffirmsand thelikelihoodofsuccessindifferentproductmarkets(Casperand Whitley,2004;Soskice,1999).Thisliteraturefocusesontheeffect ofnationalinstitutions–theindustrialrelationssystem,the edu-cationandtrainingsystem,thefinancialsystem,andtherelations betweenorganizations–whichareviewedasmutually comple-mentary(Amable,2000;Crouchetal.,2005).Theseinstitutions, createdbythestateandsocialprocesses,shapethestrategicactions offirmsandthenationalproductandtechnologyspecializations. Thisapproachishoweveratriskofpresentinganoversimplified analysis.Inparticular,itdownplaysthepossiblevarietiesoffirms’ strategiesinthesameinstitutional setting(Allen,2006).Also,it doesnotexplainwhysomefirmsmaybeabletodrawon“functional equivalents”anduseinstitutionsinnewwaystodevelopdifferent capabilities,andthereforefollowdifferentpathsfromtypicalfirms inthecountry(Herrmann,2008;Lange,2009).Overall,thereisa needforamorefine-grainedanalysisatthefirmlevel.

Thereisindeedplentyofevidencethatagreaterrangeof strate-giesareopentofirms(andscience-basedfirmsinparticular)within differentcomparativecapitalismsthanpositedbyastrictreading ofthecomparativecapitalismsliterature.Studieson biopharma-ceuticalfirmsinFrance,FinlandandtheUK(Mangematinetal., 2003;Luukkonen,2005;Hopkinsetal.,2013)revealthewide spec-trumofstrategiesofbiopharmaceuticalfirmswithineachofthese countries.Moreover,Herrmann(2008)andLange(2009)showed thatGermanbiopharmaceuticalfirmsincreasinglyfollowradical innovation strategies by using “functionalequivalents” suchas openinternationallabormarketsoratypicalcontractsto compen-sateforthelackofincentivesgeneratedbynationalinstitutions offinanceandindustrialrelations.Itisneverthelessquestionable whetherthese“functional equivalents”canprovide a sufficient supplyofresourcesforthemajorityofGermanbiopharmaceutical firms(Casper,2009).

While the comparative capitalisms literature stresses the importanceoftheinstitutionalsettingonfirms’production strate-gies,itdoesnotexplorehowtheinstitutional settinginfluences thespeedofgrowthofearlyscience-basedfirmsorhowandwhy firmsfollowdifferentpaths.Ourstudyaddressesthisgapinthe literature.

3. Researchdesignanddataanalysis

Wedesignedanexploratorycomparativemultiple-casestudyof biopharmaceuticalR&DfirmsintheUKandtheNetherlands.The focusonthebiotechnologysegmentofthepharmaceuticalindustry isrepresentativeofentrepreneurialscience-basedfirmsbecause thesefirmsrequireextensivefinancialresourcesforanextended periodoftimetodevelopnewproductsinemergentscientificand technologicalareaswithhighlevelsofuncertainty.

As we aim to understand how the early growth of entrepreneurialscience-basedﬁrmsunfoldsandhowthe institu-tionalsettingaffectsearlygrowth,acasestudyisanappropriate

methodfor identifyingtheparticularmechanismsof earlyﬁrm growth and evolution, including expansions and interruptions in dynamic processes (van de Ven and Poole, 2005; Langley, 1999; Chileset al.,2007).A comparativecase study methodis appropriateforcapturingdatathatilluminatetheseprocessesin differentorganizationalandinstitutionalcontexts,whenmultiple levelsofanalysisareinvolvedandtheboundariesbetweenunitsof analysisareambiguous(Pettigrew,1992;Yin,1994).Weattempt tocapturethesequencesofeventsintime andcontext, paying attentiontotheirtemporalordering,interactionsandinstitutional environment(Langley,1999;Chilesetal.,2007).Thus,weaimto explorewhatTsoukasandChia(2002)call“organizational becom-ing”,thatis,toexploreorganizationasanoutcome,apatternthat isconstituted,shapedandemergingfromchange.

BiopharmaceuticalR&DfirmsintheUKandtheNetherlandsare exemplarycasesbecausethetwocountrieshavedifferent institu-tionalsettings,yetcomparableinvestmentandscientificoutputin lifesciences.IntheUK,thefinancialsystemisgenerally charac-terizedashavingahighlevelofstockmarketcapitalizationand thelabor systemashaving a low level of employment protec-tion.Incontrast,in theNetherlands,thelaborsystemgenerally hashigheremploymentprotection,withlonger-termcareer pat-terns,andthefinancialsystemhasrelativelylowerstockmarket capitalization (Gospel et al., 2014).Theoretically, in the British context we would expect biopharmaceuticalfirms tobe better able to access and mobilize risk capital to fund the firm and mobilehumanresourcestoformthemanagementteamthaninthe Netherlands.Bothcountriesshowarelativelyhightechnological advantage in biotechnologyas definedby theirpatent applica-tions.Also,HeimeriksandBoschma(2014)identifyWageningen intheNetherlandsandLondonintheUKasthesecondandthird mostimportantcitiesinbiotechnologyknowledgeproductionin termsoftotalnumberofpublicationsduringtheperiod1986-2008, respectively, after Cambridge, USA.This suggestsfirms in both countriesshouldbeabletodevelopthenecessarytechnological resources(OECD,2009)1_.

Wecollecteddataatvariouspointsintimebetween2006and 2014.Toselectfirms,weusedaminimumfirmageoftwoyearsand aminimumnumberoffiveemployees(atthetimeoffirst inter-viewsin2006).Thesecriteriawereusedinordertoensurethatthe newfirmshadachievedalevelofoperationsthatrequiredresource mobilization.Wealsoselectedfirmsaccordingtotheirlocation,so thatoneregiondidnotbecomeoverrepresentedinthestudy,and aimedforavarietyinorigin,businessmodelsandownership.To aidthecomparisonbetweenfirms,wesoughttobalancethesample usingthesamecriteriaintheUKandtheNetherlands.Unlikethe UK,mostDutchbiopharmaceuticalfirmsareprivately-ownedand, asaresult,threepublicDutchfirmswerepurposefullyincludedin thestudy,thesefirmsbeingolderandlargerthantheselectedUK firms.

Theselectionprocessoffirmswasiterativeandnotrandom.As certainfirmswereaddedtotheselection,aneffortwasmadeto includeacomparablefirmfromtheothercountry.Thefinal selec-tionconsistedof18Britishand17 Dutchfirms(seeTable1for anoverviewoftheselectedcases).Theselectedfirmsareclearly notrepresentativeoftherespectivebiopharmaceuticalindustries forstatisticalgeneralization.Themethodofselectionisbasedon

1_The_UK_is_ranked_as_the_second_highest_country_developing_biotherapies_in

Europepermillionpopulation(afterSwitzerland)andtheNetherlandsisthefourth (afterAustria)(OECD,2009).TheUKhas4.23%andtheNetherlands0.94% respec-tivelyoftotalventurecapitalinvestmentsinthelifesciencesofOECDcountriesin 2007,with10.2%ofallnationalventurecapitalgoingtolifesciencesintheUKand 9.6%intheNetherlandsrespectively(OECD,2009).

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Table1 Overviewofcases. Code Origin ofﬁrm Date founded

Modelatfounding Summarydescriptionof

technology Publicorprivate ownership(in 2006-2007) Location Nr.ofemployees in2006–2007 Nr.ofemployeesor companystatusin 2014

UK-GGF UNIV 1996 Drugdevelopment Anti-fungaldrug

development

Private MAN 10–25 10–25

UK-KRA UNIV 1997 Drugdevelopment Growthfactortoprotect

heart,genetherapy

Public LON >100 Dissolvedin2013

UK-NEX IND 2002 Drugdevelopment Platformfordrug

interactioninionchannel

Private CAMB 10–25 50–75

UK-NGP IND 2001 Equipment Microarrayscreening

equipment

Private CAMB <10 Acquiredin2008

UK-OVE UNIV 1998 Drugdevelopment Drugdevelopmentin

inﬂammatoryand

immunediseases(tick technology)

Public OXF <10 Dissolvedin2008

UK-PNI UNIV 1998 Hybrid Screeningtechnology

anddatabasefor protein-baseddrug development

Private LON 25–50 Acquiredin2006

UK-RAS IND 2003 Hybrid Crystallographyand

structural-basedbiology platformforservicesand

drugdevelopment

Public CAMB 25–50 Acquiredin2008

UK-SAV UNIV 2003 Hybrid Zebraﬁshplatfromfor

toxicitytestinganddrug development

Public OXF 50–75 10–25

UK-SPE UNIV 2001 Hybrid Platform/assaysto

measurestemcells

Public MAN 10–25 50–75

UK-SXD IND 2000 Diagnostic Platformtodetermine

theeffectivenessof cancerdrugtherapies

Private MAN 10–25 >100

UK-TRG UNIV 1998 Drugdevelopment Drugdevelopmentfor

Alzheimers

Public LOND <10 <10

UK-XCI IND 1998 Drugdevelopment Skinandrepair

generation

Public MAN 75–100 Acquiredin2008

UK-XHP IND 2002 Services Services/methodsfor

drugdeliverytothebrain

Private LOND <10 10–25

UK-XOR UNIV 2004 Hybrid Drugdevelopmentand

testingservicesfor Parkinsons

Public LOND 10–25 Acquiredin2012

UK-XOX UNIV 1999 Drugdevelopment Platformfordeveloping

cancer,hepatisisBand HIVvaccines

Private OXF 10–25 Acquiredin2007

UK-XSS UNIV 2001 Drugdevelopment Drugdevelopmentand

testingservicesfro Alheizmers

Private MAN <10 Dissolvedin2014

UK-XTG UNIV 1997 Services Genotoxicityassaysto

detectpotential cancer-causing compounds

Private MAN >10 10–25

UK-YLP UNIV 2001 Services Platformtousepolymers

indevelopingnewdrug products

Private LOND <10 75–100

NL-AIK IND 1997 Hybrid Drugdevelopmentfor

cancer

Private GRON 10–25 10–25

NL-AREK IND 1990 Services Proprietarylabelling

systemforDNAprobes

Private AMS 25–50 10–25

NL-BRN UNIV 2003 Services Platformtechnologyon

drugdeliverytothebrain

Private LEID <10 10–25

NL-EPP UNIV 1999 Hybrid Servicesanddrug

developmentbasedon proteintechnology

Private LELY 10–25 25–50

NL-HTP IND 2001 Drugdevelopment Developmentofknown

moleculesfornew indications

Private UTR <10 <10

NL-KLA IND 2005 Drugdevelopment Drugdevelopmentfor

inﬂammatorydiseases

Private UTR <10 <10

NL-KYS IND 2004 Services Microarrayforgene

proﬁling

Private AMS <10 10–25

NL-LAG IND 1998 Hybrid Genomicsplatformfor

servicesanddrug development

Public LEID >100 >100

NL-MPA IND 2000 Services Microassayproductsand

services

Private EIND 25–50 25–50

NL-OIB IND 2003 Hybrid Servicesinbiology,

cellularbiologyand pre-clinic

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Table1(Continued)

Code Origin

ofﬁrm Date founded

Modelatfounding Summarydescriptionof

technology Publicorprivate ownership(in 2006-2007) Location Nr.ofemployees in2006–2007 Nr.ofemployeesor companystatusin 2014

NL-ORP IND 2002 Drugdevelopment Drugdevelopmentfor

Duchennemuscular

dystrophy

Private LEID <10 75–100

NL-PMA UNIV 2002 Drugdevelopment Drugdevelopmentfor

infectiousand inﬂammatorydiseases

Private UTR 25–50 10–25

NL-QIP UNIV 1999 Hybrid Diagnosticproductsand

drugdevelopmentusing monoclonalantibodies fortherapeuticpurposes

Private GRON 25–50 25–50

NL-RIV UNIV 2002 Drugdevelopment Outlicensingand

servicingdrug development (prevention,treatment anddiagnosis)foranew virus

Private ROTT <10 <10

NL-RUC UNIV 1992 Hybrid Platformtechnologyto

geneticallymodifythe bloodsystembyputting genesintohemopoetic stemcells

Public LEID >100 Acquiredin2011

NL-TOC UNIV 1995 Hybrid Contractresearch

organization;drug

developmenton

proprietarytechnology

Public LEID >100 >100

NL-VAA UNIV 2000 Services Technologythatprovides

parallelexperimentation atintermediateandhigh throughput

Private AMS 75–100 >100

IND=Industry; UNIV=University; MAN=Manchester; CAMB=Cambridge; LOND=London; OXF=Oxford; GRON=Groningen; AMS=Amsterdam; LEID=Leiden;

LELY=Lelystad;UTR=Utrecht;EIND=Eindhoven;ROTT=Rotterdam.

thestudy’stheoreticalframework and isdesigned toconducta comparativeanalysisofﬁrmswithinandacrossnationalsettings.

Dataontheselectedfirms werecollectedfromprimary and secondarysources.Priortotheinitialsemi-structuredinterviews, informationaboutthefirmspublishedinsecondarysources(e.g., websites, annual reports, press releases, and trade press) was gatheredandanalyzed.Thiswasusefulinestablishingtimelines, forinstanceonfinancing,oruncoveringmanagerialchangesand R&Dorproductdevelopmentsthatcouldbeverifiedandfurther explainedduringtheinitialinterview.Theinformationfromthe secondarydatawasenteredintoacasestudydatabaseandusedto triangulatetheinformationgatheredfrominterviews.

In2006and2007,weheldinitialsemi-structuredinterviews withfoundersand executivemanagerstounderstandthe early growthofthefirmsingreaterdepth.Interviewswereconducted inEnglish,atthefirms’premises,andtheaveragelengthof inter-viewswas90min.Togathersufficientdetailonthefoundingand financinghistory,anoriginalfounderwasinterviewed.Toreduce retrospectionbias,wealternatedbetweenopenandclosed ques-tions,verifyinganecdotalaccountswithquestionsthatfocusedon confirmingfactsandinformationgatheredfromsecondarysources. Inthefewcaseswhereitwasnotpossibletointerviewthefounder, weinterviewedthelongesttenuredemployeeorexternalparties, suchasaccountantsorinvestors,whowereinvolvedinthe found-ingandhad historicalknowledge.Throughtheseinterviewswe capturedthedetailsofearlyfirmformation,theeventsand deci-sionstakenbytheentrepreneursregardingearlyfundingandthe changes in management, finance and technology development. Fromthedatagathered,wedevelopedcasehistoriestounderstand theeventsanddecisionsthatfoundersmade.

Between 2008 and 2014, we collected additional data and followed theprogress of all ﬁrms.In 2011,we held additional interviewswiththeﬁrmsthathadreachedpivotalpointsintheir growth(e.g.mergerandacquisitionorliquidation)tounderstand

in moredepthhow changesunfolded aftera periodof growth. Theseinterviewswereheldwiththesameseniormanagers.When thesamemanagerswereunavailable,weposedthesame ques-tionsasked inthe firstwave to therespondentsin thesecond wavetocheckforconsistency.Duringthisperiod,wecontinued tocollectpressreleases,annualreportsand mediacoverageon fundraising,managementrecruitment,R&Dcollaborations, clini-caltrialprogress,mergersandacquisitions,andliquidations.We chronicledevents(e.g.fundraising rounds,IPOs,R&D collabora-tions,managerialrecruitment)andaugmentedthecasehistories. Overall,wecarriedoutmorethan60interviewswithfirm repre-sentatives,includingfoundersandvariousexecutivemanagers(e.g. CEOs,CSOs,businessdevelopmentdirectors,andfinancial direc-tors).

Inadditiontothefirmsinterviewedfor thestudy,14 repre-sentativesofsupportinginstitutionswereinterviewed,including trade associations,scienceparks, universitytechnologytransfer offices,venturecapitalinvestorsand policymakers.These inter-views aidedintheanalysisof theinfluenceof theinstitutional settings.Interviewswithuniversitytechnologytransferofficesand venturecapitalinvestorsalsoservedtotriangulatethedata gath-eredfromfirms.

Toconceptualizetheprocessofearlygrowthoftheseﬁrms,we requiredmethodsformakingsenseofprocessdata.Weconsidered eventsandinteractionsin theirlocalcontextstodetect mecha-nismsleadingto(orpatternsof)changeovertime.Thisisincontrast topredictivevariancemethods(thatexploreassociations,orhow independentvariables leadto changesin dependentvariables), moreaptforsimplerphenomena(Chilesetal.,2007;Langley,1999). Ourapproachwaspartlydeductive,inspiredbytheory,andpartly inductive,inspiredby data.Thismixed approachallowedus to developcreativeinsightsfromthedata,withoutnecessarily reject-ingorreinventing previousconceptsor categories(Denisetal., 2001).Deductiveandinductiveapproacheswereusediteratively

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andinsightsfromonecasegeneratedconstructsthatservedasa basisforprobingtheprocessofchangeinothers(Eisenhardt,1989; Yin,1994).Inanalyzingthecollecteddata,weusednarrativeand visualmappingstrategies(Langley,1999)torepresenttheprocess datainasystematicway,asitallowsfortheidentiﬁcationofkey eventsandtheevolutionofparalleldimensions.

DrawingonPenrose(1959)andGarnsey(1998),whichpointto thesearchactivitiesinearlygrowth,inparticularregarding per-ceptionofopportunitiesandresourcingprospects,wedeveloped twoconstructs:fundraisingdevelopment(howfirmsareableto accessandmobilizetheamountandtype offinancialresources theyrequire) and managerial development (how firms build a functionally-diversemanagementteamandtheindustryand finan-cialcontactstheyare ableto leverage forthis). Aswe iterated betweendataandemerginglogic,wegraduallybuiltaclearer char-acterizationoftheprocessbywhichfirmsaccessedanddeveloped criticalresourcesintheearlystagesoffirmgrowth.Wedifferentiate betweenfirmemergence(astageofexperimentationinobtaining financeandtheinitialmanagementteam)andearlygrowth(astage involvingthestrategicdecisiontogrowbeyondsurvival,seeking toovercomeearlierdeficienciesthroughaccessinganddeveloping newresources)(HiteandHesterley,2001;Sirmonetal.,2011).

Fromanalyzing thefielddata, weidentified theinterrelated processesthatunfoldedduringtheearlygrowthofscience-based firms.Ourinductiveworkwenthand-in-handwithourdata cod-ing. However, in order to ground the ‘intellectualleap’ in the data,weconsideredinturnalternativeexplanationsfordifferences foundinearlygrowth(RerupandFeldman,2011).Thesealternative explanationsincludedthefirms’originfromindustryor univer-sity,theirparentaffiliation,ortheirnationalorigin.Weconstantly compareddataandanalysis,identifyingemergentconceptsand comparingthemwiththerelevantliterature(Suddaby,2006).We usedcross-casecomparativetabulardisplaystounscrambleour empiricalfindingsandtoclusterandprocessourdata(Milesand

Huberman,1994).Asweiteratedfurther,itbecameclearerthat resourcedevelopmentwasstronglyaffectedbythefounders’prior tiesand relationshipsintheemergencestage.Weanalyzed our datafurtherattheﬁrmleveltorevealtheimportanteffectofthe institutionalsettingonthis.

Anotherobservationemergingfromthedatadrewourattention inductively.Thiswastheimportanceofstrongandpersistent (sci-entific)uncertaintysurroundingR&D.Itwasatthispointthatwe startedlookingathowthisinfluencesfirmemergenceandearly growth.We then includeda focus on how firmsdevelop their “productionbases”(Penrose,1959),associatedwithdifferent tech-nologicalcharacteristicsintotheanalysis,andhow thisevolves andinteractswithfundraisingandmanagerialdevelopment.From thiswefoundthatawiderangeofmanifestationsoftechnological developmenthadasignalingeffectontheaccesstoand develop-mentoffundingandmanagement.

The narrative and visual mapping strategies allowed us to identify key events and to display simultaneous dimensions (fundraising, managerial and technological development) that revealed precedence, parallel processes, interactions and time duration(Langley,1999).Thevisualmapspresentevent chronolo-giesforeachfirm(thehorizontaltimescaleshowingtheorderand durationofevents)codedinseveralways(seeFigs.1–3for exam-ples).Thelocationoftheboxinoneofthethreehorizontalshaded bandsshowstheresourcedomainwithwhichtheeventis asso-ciated.Thearrowsleadingfromeachboxindicatetheinfluence that one eventor decision has onanother.The thickness indi-catestheimpactofthatinfluence,athinlinehavinglow-medium impact,andathicklinehavingmedium-highimpact.Theshapeof theboxesindicateswhethertheeventisadecision(rounded cor-ners),anactivity(squarecorners)oraneventinvolvingexternal actors(oval).Linkswiththequalitativedatabasearemaintained thoughshort descriptionsof each elementin itscorresponding box.

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Fig.2. VisualmapofNL-ORP.

Fig.3.VisualmapofNL-BRN.

4. Findings

Toconceptualizetheprocessofearlygrowthofscience-based firms, we focused on the interaction between the access and developmentoffundraising,managerialandtechnologyresources. Basedontheevidencefromthesampleof35 firms,we uncov-eredavarietyofpathsthatfounders(ortheentrepreneurialteam) followedtoaccessresourcesintheemergencephase.We distin-guishbetweenwhatwecall“assisted”and“unassisted”pathsin firmemergence,whichhaveanimportanteffectonearlygrowth. Assisted pathsrefer topathsin which foundersrelied ontheir ownoranintermediary’srelationstootherorganizationstoaccess andmobilizecriticalresources.Unassistedpathsrefertopathsin

whichfoundersdidnothavetheestablishedrelationstoaccess critical resources. Appendix Table A1 provides an overview of thecategorizationofthepathsfollowedintheemergencestage2_. AppendixTablesA2andA3providedatasupportingthe categoriza-tionofassistedandunassistedpathsforfundraisingandmanagerial

2_We_do_not_assume_that_the_ﬁrms_followed_only_one_path_to_access_resources._We

identifiedandcategorizedthedominantpaththatfirmsfollowedtoaccesscritical resources,asthedominantpathhasconsequencesthatimpactthefurthergrowth ofthefirm.Sinceweareinterestedinhowfirmsprogressfromemergencetoearly growth,weemphasizethatthecategorizationinAppendixTableA1representsthe pathsfollowedduringtheemergencephaseofthefirm.

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developmentandtheirassociatedsub-categories.Ourcasesalso showhowawiderangeofmanifestationsoftechnology develop-mentactassignalingdevicesfortheaccessanddevelopmentof fundraisingandmanagerialresourcesinearlygrowth.

4.1. Fundraisingdevelopment

Weidentifysixdistinctpathsofhowthefoundingteamaccessed earlystagefunding;fourofwhichareassistedandtwounassisted. Startingwiththeassistedpaths,thefirstisadirectly-assistedpath tofunding,bywhichthefoundingscientistswithpriormanagerial experienceinbiopharmaceuticalfirmsaccessedearlystagefunding throughtheirdirectrelationstoinvestors.Thesecondisa technol-ogytransferoffice(TTO)-assistedpath,inwhichfoundingscientists (fromuniversity)accessedearlystagefinancingthroughtheTTOs oftheiruniversityorpartnerinstitutions.Thispathcanbeseenin theUK.Thethirdisanindirectly-assistedpath,inwhichfounders lackeddirect access toventure capital investors or established TTOs.Instead,theyreliedontheirownpersonalorprofessional relationsto facilitateaccessto investors.The fourthis an early IPOpath,bywhichfoundingscientistsavoidedventurecapitaland raisedearlystagefinancingbygoingdirectlytoanIPOtomaintain control.ThispathcanbeseeninfourofourUKfirms,asthefounding teamshadtherequisitemanagerialcompetencetoestablish con-fidencefrominvestorsandraiseearlystagefundingsuccessfully fromthestockmarket(theAlternativeInvestmentMarket(AIM)). Wealsoidentifytwounassistedpathstoaccessearly fundrais-ing:arevenue-generationandagrant-generationpath.Inmorethan halfofourfirms(19firms),thefoundingscientistshadnoprior tiestoinvestorsandhadtodevoteconsiderabletimetothesearch forexternalfinancing,buildingtiestoaccessinvestors.Inorderto bridgetheperiodoftimebetweenfirmemergenceandtheeventual raisingoffunds,firmssurvivedbygeneratingrevenueand/orgrant funding.ThispathcanbeseeninmanyofourDutchfirms(eight DutchandfiveUKfirms).IntheDutchfirms,althoughfounders raisedsmallamountsofseedfunding,theydidnotraiseenough, andcontinuedtopursuearevenue-generationpathoffering ser-vicesalongsidemorecapital-intensivedrugdevelopmentresearch. ItcouldbearguedthattheseDutchfirmsdidnotraise external financingbecausetheydidnotneedit,astheyfollowedmodelsto generaterevenuequicklyafterfounding,eitherbysellingservices ordevelopinglow-riskproductswithshortdevelopmentperiods (suchasequipmentordevices).Nevertheless,weobservethatthese Dutchfirmscontinuedtosearchforexternalfinancefromventure capitalinvestorsastheysimultaneouslydevelopedproducts,with many(fiveoutofeightDutchfirms)raisingexternalfundingafter severalyearsoftechnologydevelopment.Incontrast,theUKfirms followingarevenuegenerationpathhadnoambitionstodevelop drugproducts.Theirtechnologyremainedatanearlystageand thereforecouldnotattractfundingforthedevelopmentofnew drugproducts; thesefirmsdiscontinuedthesearchfor external financing,yetcontinuedgeneratingrevenuebyofferingservices.

Foundersalsoreliedonpeer-reviewedgrantsorgovernment fundingtobridgethegaptoraisingtheirfirstroundofexternal financing.BothDutchandBritishfirms(fourandtworespectively) thatreliedonthispathforfundraisinghadtechnologyinearlyand unprovenstages.Grantfundingfromgovernment,charitableand otherinstitutionsisnotsufficienttodevelopdrugproductsthrough clinicaltrialsandthefirmscontinuedtosearchforlargerroundsof finance.

4.2. Managerialdevelopment

Weidentifyfivedistinctpathsofhowfirmsaccessedmanagerial expertise,fourassistedandoneunassisted.Thefirstassistedpathis aninvestor-appointedpath,inwhichfirms,aftersecuringexternal

financing,wereabletotapintotheirinvestors’networkstoform afunctionally-diversemanagementteam.Theventurecapital(VC) investorsappointedmanagerialresourcesandeitherretainedor removedoneormoreofthefoundersfromthemanagementteam. Inthesecondassistedpath,afounder-appointedpath,thefounders usedtheirownnetworkorthirdparties(e.g.executivesearch,or headhunters)tosearchformanagerialresources.Foundersinboth theUKandDutchfirmsaccessedmanagerialcompetencefollowing thispath.Dutchfoundersreliedprimarilyonthirdpartiestorecruit management.Thethirdassistedpath,aparent-appointedpath, rep-resentsfirmsthataccessedmanagerialresourcesbyappointment fromtheiroriginatinginstitution. In mostcases,but not exclu-sively,thesefirmsoriginatedfromuniversityenvironmentsand theappointmentsweremadebeforeraisingexternalearlystage finance.Thefourth assistedpath isa founders-diversity path,in which founding teams had functionally-diverse skills fromthe outset.Founderswhohadpreviouslyworkedtogetherataprior employerweremorelikelytostartthefirmwithafoundingteam ofcomplementarymanagerialcompetence.Thisfounders-diversity pathwasevidentinthreeUKfirms.

Formanagerial development,thereis oneunassisted path,a founders-limitedpath.Inthispath,functionaldiversityinthe found-ingmanagementteamisconstrainedasmanagerialresourcesare notaccessedintheemergencephaseandfoundersreliedontheir own(limited)managerialcompetence.Foundersthusassumeall thevariousmanagerialrolesandresponsibilities(inthreeUKand sevenDutchﬁrms).

4.3. Technologydevelopment

Ourcasesshowhowa widerangeofmanifestationsof tech-nologydevelopment,includingbutnotlimitedtotheintermediate outputsofinventiveactivity(suchaspatents),announcementsof partnershipsoracquisitions,developmentofservices,orsuccess inclinicaltrials,actasimportantsignalingdevicestoattractearly stagefundraisingandmanagerialresourcesandadvancetheearly growthoftheﬁrm.Establishingproof-of-conceptforthe technol-ogyisakeyturningpointinaccessingbothfundingandmanagerial resources.

Thesesignalingdevicescanhavepositiveaswellasnegative effects and the use of these signaling devices is complex. For instance,firmscanusesignalsoftechnology“failure”,suchaspoor orinconclusiveresultsfromclinicaltrialsorthediscontinuation ofdrugprograms,asclearrepresentationsofstrategicchoicesand theycaninfluenceearlyfirm growthinpositive ways.Usingan examplefromoneof ourcases,UK-XCI,inanticipatinga forth-comingIPO,discontinuedadrugprogramthatusedcontroversial technologybasedonporcinexenografts.Inthisway,agreatdeal oftechnologicaluncertaintywasreducedbeforeitsIPO.Another example is UK-OVE. Having inconclusivephase IIa clinical trial results,ithadaverydifficulttimeraisingfollow-onfundingfrom itsventurecapitalinvestors.Instead,thefirmturnedtothepublic equitymarket,floatingonAIM,raisingenoughfundingtocontinue itsdrugdevelopmentprograms.Afewyearslater,itreportedagain poorresultsfromclinicaltrialsandfailedtoaccessfurtherfunding andwaseventuallyliquidated.

Inshort, thesesignalingdevicesof technologydevelopment, albeitpositiveornegative,interactwiththeassistedandunassisted paths of fundraising and managerial development. The strong uncertaintyoftechnologydevelopmentinherentinscience-based firmsmakes itdifficult tojudgewhetheronetype of pathwill bemorebeneficialthananother.Theresourcedevelopmentpaths availableto science-basedfirms affectthe subsequentstrategic choicesoftheirmanagersdifferentlyand, inturn,their produc-tionbases.Inthenextsection,weillustratewiththreecasesthe

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interactionofresourcedevelopmentandtheeffectsoftechnology developmentsignalsonearlygrowth.

4.4. Speedofearlygrowth

Thecombinationsofthedifferentpathsdescribedabove influ-encethespeed ofearlygrowth.We showbelowthatfirmscan develop in a rapid, gradual orarrested way, contingentonthe typeofaccessfirmshavetocriticalresources.Inthissection,we highlightandprovidenarrativesofthreeexemplarycasesoffirms developingatdifferentspeeds.

4.4.1. Rapiddevelopment

UK-XOR is an academic spin-off foundedby a professor to exploit commercially his academic department’s experimental modelsforParkinson’sdisease.Thedepartmentwasentirelyreliant ongrantfundingandtheprofessorwantedtosecureemployment forthescientistsinhisdepartment.Hehadtriedforseveralyears togethisuniversitytospinoutthedepartment.Oncethe univer-sityenteredapartnershipwithathirdpartytoexploituniversity technology3 _(more_generally),_his_academic_department_was tar-getedforspinningout:

I had a track record of working with the pharmaceutical industry...Ihaveanumberofexperimentalmodelsin Parkin-son’s, which I have been using for many, many years in conjunctionwithindustry._._._.Ihadbeenmakingnoisesagain abouttryingtodosomethinginamorecommercial environ-ment.

UK-XORwasestablishedin 2004and asmallamountof ini-tialseedfundingwassuppliedbytheparentorganizations(the universityandthirdparty).AninterimCEOwasappointedshortly afterfounding.Wecategorizedthisaccesstomanagerialresources asa parent-appointedpath.Thefirmfirstdevelopedits manage-rialresources,which hadasignificantimpactonitssubsequent accesstofundingresources.TheappointmentofaninterimCEO helpedUK-XORtoovercomebureaucratichurdlesandaidedinthe recruitmentofaCEOwithinthefirstyear.Thisaccesstomanagerial resources(boththeinterimandpermanentCEO)intheemergence stageallowedUK-XORtobypassventurecapitalinvestmentand raiseearlystagefundingfromanIPO.WecategorizedUK-XOR’s financial development as following an early stage IPO path. To accessthisfundingpath,UK-XORhaddevelopeda functionally-diversemanagement team within the firstyear of foundingto coordinateanIPOandprovideconfidencetoinvestorsinits techno-logicalandcommercialpotential.UK-XORlistedonAIMinMarch 2005.Followingthistypeofpathtoaccessfundraisingresources isunusual—notonlydoyoungfirmsneedtopossesstherequisite managerialcompetencebuttheyalsoneedtobeembeddedinan institutionalsettingthatfacilitatesearlystagelistingonasmall-cap stockexchange.Thefoundingscientistdescribedtheprocess:

Wewereoffveryquicklyindeedsingingoursongaroundthe citytotheinvestmentmanagers,andtomysurprise,sincewe haddonenothing,[excepthave]alotofideasandagoodteam, wedidverywell.Weoffered23milliononwhichwetook13.5 millionattheinitialplacement.Andgotourselveslisted. Accessingmanagerialandﬁnancialresourcesoccurredrapidly. Simultaneouslywiththedevelopmentofﬁnancialand manage-rialresources,UK-XORstartedanumberofresearchprogramsand recruitedanotherkeymemberofthemanagementteam,thehead

3_The_third_party_partner_is_a_UK_company_that_partners_with_{research-intensive}

universitiestocommercializeintellectualpropertyanddevelopnewtechnologies.

ofdrugdevelopment.TheuniversityfounderbecametheCSObut alsoretainedhisacademicposition.

UK-XOR’s technologydevelopmentis fundamentalto under-standinghowfundraisingandmanagerialresourceswereaccessed anddeveloped.Thetechnologyplatformhadstrongscientiﬁc rep-utationalbeneﬁts,astheacademic founderhad beenproviding servicestopharmaceuticalsformanyyears.Thisproductionbase gaveUK-XORtheopportunitytofollowahybridbusinessmodelof offeringservicesanddevelopingdrugproducts.Althoughboththe academicfounder/CSOandtheCEObelievedthattheimmediate revenuestreamwasadvantageousinpursuinganearlystageIPO, bothmanagersemphasizedthatofferingserviceswasnotwhere thevalueofthecompanyrested.

Theutilizationoftheirtechnologyforservicestopharmaceutical firms(includingregulatoryapproval)providedexternally-focused signalsofthequalityofitstechnologydevelopmentand internally-focused information processing benefits. The CSO and CEO expressed these benefits differently. The CSO emphasized the learningassociatedwiththebusinessmodel:“wehaveallthis intel-ligencethatiscominginthewholetime[and]wehaveaveryclose relationshipwithwhat[UK-XOR]doesandwhatIdowearingmy academichatandwhatbigpharmawantsfromasmallbiotech.”The CEOexpressedthisintermsofreducingtheuncertaintyinherent inscience-basedfirms’researchandproductdevelopment:

Developing[products]inParkinson’shassomeinteresting risk-rewardrelations.Therearemanypredictivemodelsthatexist forParkinson’swhichdon’texistforalmosteveryother indi-cation ...Thatis one of the[founding academic scientist’s] strengthsbecauseheissointertwinedintheindustry.Hehas beenrunningthosemodelsforthelast25yearsforbigpharma andtheyrunthosemodelsbecausetheyaresopredictive.It’s anFDAguideline,sowhatthatpresentedtomewasnothing thatmakesdrugdiscoveryanyeasier,itjustmakesitlessrisky toinvestmoreinaprogram.Ifitdoesn’tworkyoucutitand ifitdoeswork,youhavetheconﬁdencefromthesepredictive modelsthatyou’regoingintherightdirection.

Thevisualmap(Fig.1)showstheprogressiveandrapid technol-ogyandfundraisingdevelopmentthatensued.Asdiscussedabove, withintwoyearsoffounding,UK-XORhadafunctionally-diverse managementteamandlistedonAIM.Thereafter,UK-XORraised subsequentroundsoffundingthroughplacementsapproximately everytwoyearsasitmoveddrugprogramsthroughclinical tri-als,acquiredcompoundsfornewdrugprogramsandestablisheda USCooperativeResearchandDevelopmentAgreements(CRADAs) for drugdevelopmentwithpartners suchastheNational Insti-tutesofHealth(NIH),andpartnershipswithlargeSwedishandUS pharmaceuticalfirms.Asuccessionofsignalsfromitstechnology developmentfuelledfirmdevelopment,firstthroughoutlicensing itsfoundingtechnologywhichalsoprovidedmilestonepayments andinfluencedpositivelyUK-XOR’sabilitytoraisemoreexternal financingandthenthroughacquisitionoftechnologywhichfurther developeditstechnologyresourcesandfilledthefirm’spipeline, againinfluencingpositivelyoutlicensingandcollaboration agree-ments.Eightyearsafteritsfounding,UK-XORwasacquiredbyone ofitsoutlicensingpartners.

4.4.2. Gradualdevelopment

NL-ORPwasfoundedin2002byascientistwhohadprevious workexperienceinDutchandUSbiotechnologyﬁrms.Withtwo otherDutchbiotechentrepreneurs,NL-ORPbeganwithan“idea touseparticulartechnologyonnucleicacids,nucleotides...and startedthiswithalittlebitofmoney.”Intheemergencestage, NL-ORPaccessedﬁnancialresourcesthroughagrant-generationpath, drawingongrantsfromgovernmentschemestostimulatebiotech

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entrepreneurshipandlater ongrantsfrompatientorganizations forﬁveyears.

ThecoretechnologyofNL-ORPemergedfromthefounder’s con-victionthat“tosurvivewehadtodevelopatherapeuticproduct outofthetechnology”.Hefurtherexplainedthattheycameacross technologyfromanearbyuniversitythat“wasusingourtypeof moleculestodevelop atherapyfor Duchennedisease”.It wasa technologyfor geneexpression thatallowedforcorrectionof a mutation,a“molecularband-aid_._._.youcanmaskthemutation andthenyoucancorrectit”.Thattechnologybecamethecoreof NL-ORP’sproduction baseand “waspatentedtogetherwithour knowledgeofthecompoundstodothemaskingofthemutation”. Fromthatpoint,NL-ORPstartedtochangefroma“technologyto aproductdevelopmentmindset.Westartedslowlybutsurelyto developasaproductdevelopmentcompany...Thatchangedthe company.”

OnceNL-ORPhadidentiﬁedtheirtechnologyfocusand produc-tionbase,theyﬁledfor andreceivedorphan drugdevelopment status,whichactedasapositivesignaloftechnologydevelopment asnowtheycouldfasttracktheclinicaltrialsassociatedwithdrug developmentforDuchenne.Thisoccurredthreeyearsafter found-ing.TheorphanindicationalsoallowedNL-ORPtoaccessmore grant-generatedfundingfrompatientorganizations:

Wedidn’thaveabigpotofmoney...soIhadtogooutand getgrantmoneyandthenatacertainpointwehadsomegood resultsandIwasabletoattractsomesmallamounts[offunding] andthenIgotgrantsagain...andwebuiltonthat.Wewere abletoattractalotofgrantmoney.

Thefounderestimatedthatintheﬁrstﬁveyears,hereceiveda “totalof6[government]grantsandabout3to4grantsfrompatient organizations.Thatamountsto...betweensixorsevenmillion euros.”

AquestionthatarisesiswhythefounderofNL-ORPused grant-generationtoraisefundinginsteadofpursuingapathofventure capitalinvestment. Anexplanationis that NL-ORPhad still not establishedtechnologicalproof-of-concept and it wasnot until aftertheresultsofpre-clinicaltrialsthatventurecapitalwasraised. In2007,fiveyearsafteritsfounding,NL-ORPraisedD13.5million initsfirstroundoffinancingfromalocalventurecapitalfund.The founderexplainedthathetriedtofindVCinvestmentearlierand approachedbothlocalandinternationalinvestors:

AtfirstIdidcallupthelargeronesandtheysaid‘nice,butyou’re toosmall’.Ididn’tpursuethatanyfurtherbecausewhentwo ofthemalreadysaythatyou’retoosmall,that’sfine.Butnow [2007]itis alittlebitdifferentbecausewearein theclinic, wearealittlebitbigger,newtechnology,sothattheyfindus interesting...

Accessanddevelopmentofmanagerial resourcesprogressed graduallyaswell.Fromtheverystart,thefounderassembledan advisoryboardwithtwoexperiencedbiotechnologyscientistsand entrepreneurs.Thefounder referredtohowthelackoffunding influencedthedevelopmentofmanagerialresources:“Wedidn’t haveabigpotofmoneytobringinmanagement.”Coincidingwith theventurecapitalinvestmentin2007,thefoundersearchedfor andrecruitedstaffforkeyposts,includingscientificdirector,head ofclinicaldevelopment,headofresearch,financialdirector, busi-nessdevelopmentandregulatoryaffairs:

...becauseofmyexperience,knowingthatyouhavetoputup a qualitysystemtodothis beforeyoucanenterintohuman trials,theseguys...cameinwiththeirparticularexpertisein productdevelopment,wecouldcutalotofthetimeneeded forayoungcompanytosetitselfupasqualiﬁedtodoclinical trials.

Thus,managerialdevelopmentinNL-ORPoccurredprimarily throughafounder-appointedpath.Shortlyafterthesecondroundof venturecapitalﬁnancing,approximatelysevenyearsafterfounding in2009,thefounderCEOwasreplaced.

Withadvancesintechnologicaldevelopment(seeFig.2), man-agerial and fundraising resource development followed. There weresubsequentroundsoffinancing,alongwithoutlicensing rev-enue,milestonepaymentsandroyaltyfees.NL-ORPcontinuedto raisefundingthroughvariousEuropeangrantprogramsand char-ities or patient organizations.NL-ORP entered severaldifferent alliances,includingpartnershipswithuniversities(Dutchaswell asotherEuropeanandUSuniversities),hospitalsandlarge phar-maceuticalcompanies,todevelopitsdrugdevelopmentprograms. Itsuccessfullyprogresseditsdrugprogramsthroughseveralphases ofclinicaltrials.In2011,NL-ORPreceivedUSandJapanesepatents, strengtheningitstechnologyposition.In2012and2013,NL-ORP receivedfivedifferentawardsofrecognition(e.g.EmergingStar Award).In January2013,theUSFoodand DrugAdministration (FDA)awardedNL-ORPorphandrugstatusonitsentireportfolio ofDuchenneproducts.InJuly2013,elevenyearsafteritsfounding, NL-ORPlistedontheNASDAQstockexchange,issuing6.9million sharesandraising_D64million.InSeptember2013,NL-ORPand itslargepharmaceuticalpartnerannouncedthatoneofits flag-shipprogramsfailedtomeet PhaseIIIclinicaltrialendpoints, a signaloftechnologyfailure.Indeed,NL-ORP’sstockmarketvalue droppeddramatically,itssharepricelosingtwo-thirdsofitsvalue injustonedayinSeptember2013,withmorethan17millionshares traded.UpuntilMarch2014,NL-ORPmadevariousannouncements regardingthis program. Onesignificantsignal,in January2014, wastheannouncementthatitwouldregainthefullrightstothe programandterminateitscollaborationwiththelarge pharmaceu-ticalcompany.InMay2014,NL-ORPannouncedtheywouldpursue clinicaldevelopmentwithare-dosingplan,statingthat,“treating earlierinthediseaseandtreatingforalongerdurationconfersa treatmentbenefit”4_.

4.4.3. Arresteddevelopment

NL-BRNisanexampleofarresteddevelopment,asitwasable tosurvivebutexperiencedastagnantdevelopment,neitherraising earlyﬁnancialresourcesnorrecruitingafunctionally-diverse man-agementteam.Arresteddevelopmentcombinesunassistedpaths ofbothﬁnancialandmanagerialdevelopmentoveranextended periodoftime,dependingonuniversityresourcesorgrantfunding forlongperiodsoftime.

NL-BRNwasfoundedbyapost-docinterestedinexploitingthe researchhedidinhisPhD.Theuniversitywasintheprocessof out-licensingthetechnologydevelopedoverthecourseofhisdoctoral workandwasinvolvedintechnologytransfernegotiations.Atthis point,hebegandiscussingthepossibilityofstartingupabiotech ﬁrm,ultimatelyagreeingthatonepartofthetechnologywouldbe licensedandthathewouldstartacompanywiththeother.In2000, theuniversityhiredthefounderforsixmonthswhileheappliedfor andreceivedagovernmentgrantforstart-ups.Hefundedtheﬁrst threeyearsofNL-BRN’sdevelopmentusinggovernmentgrantsand relyingonuniversityresources,developingtheproductionbase—a platformtechnologyondrugdeliverytothebrainthatcouldbe

4_The_technology_development_trajectory_of_NL-ORP_can_be_contrasted_with_two

otherfirmsinoursample,UK-XCIandUK-OVE.Thesetwofirmsalsoreported nega-tiveclinictrialresultsandasaresultthesetwofirmshadgreatdifficultyinsecuring financialresourcessubsequenttothissignaloftechnologyfailure.Bothfirmswere alsolistedontheAIMstockexchangeandeventuallyliquatedtheirassetsbyeither filingforbankruptcyorsellingtheirtechnologicalassets.NL-ORPhaswithstoodthis negativetechnologysignalbecauseofthemanyotherpositivesignalsoverthelong durationoftime.Withsufficientfundsandanexperiencedandfunctionally-diverse managementteam,NL-ORPstillcontinueditstechnologydevelopment.

(13)

patentedanddevelopedcommercially.NL-BRNwaslegally estab-lishedthreeyearslaterin2003.

Thefounder wasaware that bytheend of thegrant period they“neededtohaveinvestors...sowevalidatedthe technol-ogyandgotatermsheetfromoneofthebiotechcompaniesthat theywerewillingtohaveanoptionagreementwiththe technol-ogythatweweredeveloping.”IttookNL-BRNeightyearsfromthe initialgrantfundingtoraiseafirstroundofventurecapital finan-cing(D4million)in2008.WecategorizedNL-BRNasfollowinga grant-generationpathtoaccessfinancialresources.

ThedevelopmentofmanagerialresourcesinNL-BRNwasalso limited.Grant fundingbegan beforetheﬁrmwaslegally estab-lished.Atthatpoint,onlythefoundingscientistandalabtechnician wereworkingondevelopingthetechnology.Thefounderreﬂected criticallyonthewayNL-BRNstarted:

Therewasnothingandwereallyneededthatgrantmoneytoget apatentoutofit.Therewasreallynothing.Normallyacompany would[start]atthephasewerewearenow...thatwouldbe morelogical.Thereisapatentandyouhavesomevalidation. Thatiswhereweareaboutnow[2007].But_._._.Iwantedtostart acompanywithoutanyIP.Ididitthehardway.Iwouldn’tdoit againinthisway.Toomanyrisks...

The founder had, at that emergence stage, sought external adviceandsupportduringnegotiationsfromaconsultantwhohad pharmaceuticalmanufacturingexperience.Thisdevelopedintoa closercollaboration,andtheconsultantbecame anequity part-nerwhenthefirmwaslegallyestablished.Thefounderalsohad an academic partner,a professor who was a scientific advisor. Asaresultofgeneratinggrantstosupporttechnology develop-ment,NL-BRNalsohadfourtechniciansworkingonthetechnology througha university arrangementand had a formal agreement that theknowledge would befor commercialuse. In its emer-gencestage,NL-BRNuseduniversityfacilities,payingbenchfees andcollaboratingcloselywithuniversityresearchers,describedby theintervieweeasa“continuousflowofknowledge”.

Inthisemergencestage,managerialresourcedevelopmentwas limited,consistingonlyofthefounding(equity)partnersand advi-soryboardmembers.Thefoundingpartnersdividedmanagerial responsibilitiesandrolesbetweenthetwoofthem,oneassuming scientiﬁcresponsibility,theothergeneraladministrationand busi-nessdevelopment.Recruitmentofkeymanagerialpositionstook placeonlyafterventurecapitalfundingwasraisedeightyearslater. Inparallel,thetechnologydevelopmentofNL-BRNalso expe-riencedslowprogress.Whentheystarted,theirambitionwasto bea“target-discoverycompany”.Thefounderexplainedhowthey settledontheirtechnology:

...wecouldn’tdomuchaboutthescientiﬁcplan[lookingfor targets]becausethatwaswhatwegotthe[grant]moneyfor andweneededtodothattogetintoanIPposition.Oneofthe targetswasluckilyveryclosetoapplicationandwecouldgeta goodpatentpositiononthat.Itwasbasedondrugdeliveryso ...wewerelookingfortherapeutictargetsbutthetargetwe foundwecouldjustusefordrugdelivery...[however]when [thetechnologywasdeveloped]enoughtogotoinvestorsthat marketwasverydriedup.

Leadinguptoitsﬁrstroundofventurecapitalin2008,NL-BRN lackedsignalsoftechnologydevelopment,whichseverelyimpeded thegrowthof NL-BRNand impactedits strategic choices.Even thoughNL-BRNhadpatentedtechnology,whichsendsapositive signal,itcouldnotgenerateinterestinthetechnologyopportunity, attractingneitherventurecapitalnorcollaborative partnerships withbiotechandpharmaceuticalcompaniesforalongtime.The founder realizedthatprogress wasslowbut acknowledgedthe learningprocess:“...thescienceismostlypaidbyresearchgrants.

Table2

Pathstofundraisingandmanagerialdevelopmentandspeedofearlygrowth.

Pathstomanagerialdevelopment

Assisted Unassisted Pathstofundraising development Assisted Rapid development Gradual development Unassisted Gradual development Arrested development

But_._._{. it}istooslow.Wehavelearnedalot_._._.nowweknowwhat todo”.

NL-BRN experienced a turning point in 2008. After raising itsfirstroundofventurecapital,it in-licensedtechnologyfrom a researchinstitute inTaiwan,negotiating exclusiveworldwide rightsofuse.WiththehelpoftheVCinvestor,thefirmrecruited a CEOin 2009whohad commercialandbusiness development experienceinalargeUSbiotechnologyfirm.Yet,evenwiththese positive signalsoftechnologyandmanagerialdevelopment,the developmentofadditionalfinancialresourcesprogressedslowly. IttookanotherthreeyearstoraiseanadditionalD7million.The recruitment of managerial resourcesalso progressed slowly. In 2014,NL-BRNrecruitedasenior-levelCFOfromoneofthelargest Dutchbiotechfirms.Althoughthe(local)financialandtrademedia reportonNL-BRN’s businessandtechnology, NL-BRNstill lacks technologysignalsthatencourageaspeedierfirmdevelopment.

5. Discussion

OurstudybuildsonandextendsthecontributionsofPenrose (1959)and Garnsey(1998)onﬁrm growth.Itshows thespeed of earlygrowth of science-basedﬁrms as thetime it takes for theassembly (orcombined development)of thethree typesof criticalresources—afunctionally-diversemanagementteam,early fundraisinganddevelopmentoftechnology.

Afirstissueraisedbyourfindingsisthatthedevelopmentof earlyfinance,managerialcompetenceandtechnologyisan unfol-dingandinterrelatedprocess,thecausaldirectionofwhichishighly ambiguous.Forsomefirms,havingaccesstomanagerial compe-tence facilitatesexternal fundraising, and,in contrast,for other firms,raisingexternalfinancingfacilitatestherecruitmentof man-agerialcompetence.Differentstudieshaveuseddifferentindicators (e.g., number of employees, funds invested, market capitaliza-tion)forexploringorganizationalgrowth.Ourprocessanalysishas enabledustotakewhatareusuallyviewedasoutcomesandto considerthemexplicitlyasinputs(managementteamasinputto funding,fundingasinputtodevelopingamanagementteam).For example,roundsoffundingcanberegardednotasameasureof per-formancebutasaninputthatcanpersuadeexperiencedmanagers tojointhefirm.

Weshowthevarietyofpathsusedbyscience-basedfirmsto accessand develop criticalresources.Thecombination of these pathsexplainshowfirmgrowthcanunfoldinarelative straight-forwardandrapidway,inamoregradualway(whendevelopment isinsmallstepsandrepresentsimpededaccesstoeitherfinance ormanagerialresources),orcanevenbearrested(whenfirmsare unabletodevelopafullfunctionally-diversemanagementteamand havelimitedaccesstoearlyfinance).Table2showsthepathsto fundraisingdevelopmentandmanagerialdevelopment.Thebasic picturethatemergesisthatthevariouscombinationsofassisted andunassistedpathsleadtodifferentspeedsofdevelopment.

Ourstudyalsocontributestotheliteratureoncomparative cap-italisms(HallandSoskice,2001;HollingsworthandBoyer,1999; Whitley,1999),byshowingthatthevarietyofpaths(andspeed) ofearlygrowthofscience-basedﬁrmsareclearlyinﬂuencedby