What drives investors’ propensity to invest in university Spinoffs? An experiment on the role played by university ownership and reputation

The link that university spin-offs (USOs) have with their parent universities makes them unique in the eyes of external equity investors, but it is not clear in which circumstances USOs’ university ownership actually contributes to or hampers investors’ propensity to invest in USOs. To address this gap, we build on legitimacy and certification perspectives and hypothesise that university ownership, and particularly ownership from highly reputable institutions, functions as a certifying mechanism, enhancing investors’ propensity to invest. Our hypotheses are tested through a randomised within-subject experimental study recruiting investors on Prolific, and confirm the important role played by university ownership, particularly when the parent university has a high level of reputation.