A real options-driven theory of business incubation

Sean M. Hackett, David M. Dilts

Research output: Contribution to journalArticle

101 Citations (Scopus)

Abstract

This article employs real options-theoretic reasoning to develop a theory of business incubation. This theory seeks to predict and explain how business incubators and the process of business incubation increase the likelihood that new ventures will survive the early stages of development. It conceptualizes the incubator as an entrepreneurial firm that sources and macro-manages the innovation process within emerging organizations, infusing these organizations with resources at various developmental stage-gates while containing the cost of their potential failure. The incubator is the unit of analysis while incubation outcomes-measured in terms of incubatee growth and financial performance at the time of incubator exit-provide indicators of success. Our model of the incubation process and specification of the range of possible incubation outcomes offer implications for managerial practice and policy-making vis-à-vis incubator management and good entrepreneurial failure.

Original languageEnglish
Pages (from-to)41-54
Number of pages14
JournalJournal of Technology Transfer
Volume29
Issue number1
DOIs
Publication statusPublished - 2004
Externally publishedYes

Fingerprint

Industry
Macros
Innovation
Specifications
Real options
Incubator
Business incubation
Costs
Incubation
New ventures
Financial performance
Stages of development
Policy making
Managerial practices
Innovation process
Business incubators
Entrepreneurial firms
Resources
Unit of analysis
Exit

ASJC Scopus subject areas

  • Business and International Management
  • Accounting
  • Engineering(all)

Cite this

A real options-driven theory of business incubation. / Hackett, Sean M.; Dilts, David M.

In: Journal of Technology Transfer, Vol. 29, No. 1, 2004, p. 41-54.

Research output: Contribution to journalArticle

Hackett, Sean M. ; Dilts, David M. / A real options-driven theory of business incubation. In: Journal of Technology Transfer. 2004 ; Vol. 29, No. 1. pp. 41-54.
@article{857ef6e6955f4eab98af8c4eadb5fb2c,
title = "A real options-driven theory of business incubation",
abstract = "This article employs real options-theoretic reasoning to develop a theory of business incubation. This theory seeks to predict and explain how business incubators and the process of business incubation increase the likelihood that new ventures will survive the early stages of development. It conceptualizes the incubator as an entrepreneurial firm that sources and macro-manages the innovation process within emerging organizations, infusing these organizations with resources at various developmental stage-gates while containing the cost of their potential failure. The incubator is the unit of analysis while incubation outcomes-measured in terms of incubatee growth and financial performance at the time of incubator exit-provide indicators of success. Our model of the incubation process and specification of the range of possible incubation outcomes offer implications for managerial practice and policy-making vis-{\`a}-vis incubator management and good entrepreneurial failure.",
author = "Hackett, {Sean M.} and Dilts, {David M.}",
year = "2004",
doi = "10.1023/B:JOTT.0000011180.19370.36",
language = "English",
volume = "29",
pages = "41--54",
journal = "Journal of Technology Transfer",
issn = "0892-9912",
publisher = "Kluwer Academic Publishers",
number = "1",

}

TY - JOUR

T1 - A real options-driven theory of business incubation

AU - Hackett, Sean M.

AU - Dilts, David M.

PY - 2004

Y1 - 2004

N2 - This article employs real options-theoretic reasoning to develop a theory of business incubation. This theory seeks to predict and explain how business incubators and the process of business incubation increase the likelihood that new ventures will survive the early stages of development. It conceptualizes the incubator as an entrepreneurial firm that sources and macro-manages the innovation process within emerging organizations, infusing these organizations with resources at various developmental stage-gates while containing the cost of their potential failure. The incubator is the unit of analysis while incubation outcomes-measured in terms of incubatee growth and financial performance at the time of incubator exit-provide indicators of success. Our model of the incubation process and specification of the range of possible incubation outcomes offer implications for managerial practice and policy-making vis-à-vis incubator management and good entrepreneurial failure.

AB - This article employs real options-theoretic reasoning to develop a theory of business incubation. This theory seeks to predict and explain how business incubators and the process of business incubation increase the likelihood that new ventures will survive the early stages of development. It conceptualizes the incubator as an entrepreneurial firm that sources and macro-manages the innovation process within emerging organizations, infusing these organizations with resources at various developmental stage-gates while containing the cost of their potential failure. The incubator is the unit of analysis while incubation outcomes-measured in terms of incubatee growth and financial performance at the time of incubator exit-provide indicators of success. Our model of the incubation process and specification of the range of possible incubation outcomes offer implications for managerial practice and policy-making vis-à-vis incubator management and good entrepreneurial failure.

UR - http://www.scopus.com/inward/record.url?scp=84882992362&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84882992362&partnerID=8YFLogxK

U2 - 10.1023/B:JOTT.0000011180.19370.36

DO - 10.1023/B:JOTT.0000011180.19370.36

M3 - Article

VL - 29

SP - 41

EP - 54

JO - Journal of Technology Transfer

JF - Journal of Technology Transfer

SN - 0892-9912

IS - 1

ER -