Linear and non-linear patterns of internationalisation and funding in academic spin-offs

ABSTRACT

Academic spin-offs (ASOs) are typically technologically driven, and their expansion into foreign markets has become a priority for the generation of revenue, thereby recuperating the initial R&D and patent costs over a shorter time frame. However, the literature of how these firms internationalise and what sources they can rely on to obtain the financial resources remains very limited. Two main objectives are proposed in this paper: first, the analysis of whether those relationships that ASOs maintain with various agents to provide financial resources for internationalisation differ between ASOs that have internationalised and those that have not; and second, the study into whether those ASOs that internationalise by following different internationalisation patterns present differences in their agents that provide them with financial resources. From a sample of 173 Spanish ASOs, results of cluster analysis and post-hoc tests indicate that internationalised ASOs rely on financial agents different to those of domestic ASOs. We firstly conclude, that the most representative internationalisation pattern in ASOs is Born Global (BG), through the True Born Global (TBG) and Sporadic Born Global (SBG) sub-patterns. Second, the internationalisation patterns are supported by different financial agents, although governmental institutions and Venture Capital (VC) firms constitute the most relevant agents.

KEYWORDS:

• Academic spin-offs
• internationalisation
• Uppsala
• Born Global
• non-linear
• funding

1. Introduction

The literature on academic entrepreneurship (AE) has recently addressed the phenomenon of the internationalisation of academic spin-offs (ASOs) (Bialek-Jaworska and Gabryelczyk 2016; Bjørnåli and Aspelund 2012; Civera, Meoli, and Vismara 2019; Pettersen and Tobiassen 2012; Teixeira and Coimbra 2014). This literature has shown that, since the products and services commercialised by ASOs are based on knowledge developed in universities with high levels of innovation, ASOs tend to experience early and rapid internationalisation (Andersson and Berggren 2016; Bolzani et al. 2017; Styles and Genua 2008). Several authors categorise ASOs as Born Globals (BGs) that start their international activities from their early stages of development (Franco-Leal, Soetanto, and Camelo-Ordaz 2016; Hannibal, Evers, and Servais 2016). ASOs typically possess advanced technologies that are attractive to global niche markets and are therefore natural BG candidates (Kiederich and Kraus 2009). Despite these arguments, however, very little empirical research is focused on the study of the internationalisation patterns of these firms (Bialek-Jaworska and Gabryelczyk 2016; Bolzani et al. 2017), and there are no studies that analyse whether ASOs present internationalisation patterns identified in the international entrepreneurship (IE) literature.

On the other hand, access to the financial resources necessary for the internationalisation of these companies constitutes one of the critical factors for the success of this growth strategy. ASOs that internationalise need more funding, since operating in foreign markets is a more uncertain, risky, and costly process than operating in domestic markets (Bjørnåli and Aspelund 2012; Jones, Kwansa, and Li 2020). Researchers have been aware of the difficulties faced by ASOs in attaining funding and accessing the agents that provide this resource. Thus, the analysis of the sources of funding that ASOs can access has therefore been their subject of study. This research has started from the premise of the problems and barriers that hinder the funding of ASOs due to the academic origins of their founders and the nature of the research they commercialise (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015; Vohora, Wright, and Lockett 2004). Most of this research has analysed how ASOs obtain funding at different stages of their development (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015; Franco-Leal et al. 2020; Huynh 2016; Lindstrom and Olofsson 2001). However, prior literature has failed to address this issue in the field of internationalisation of ASOs (Bock, Huber, and Jarchow 2018; Hossinger, Chen, and Werner 2020; Huynh 2016; Ortín-Ángel and Vendrell-Herrero 2010; Rodríguez-Gulías et al. 2018; Soetanto and Van Geenhuizen 2015). The agents that finance the various internationalisation patterns chosen by these firms are even less known.

From these arguments, we propose two research questions. First, are there differences in financing between internationalised and domestic ASOs? Second, what internationalisation patterns from the IE literature do ASOs follow, and which financial agents are most relevant within each internationalisation pattern?

From these research questions, we derive the two main goals of this paper. First, the analysis of whether the relationships that ASOs maintain with different agents providing financial resources for internationalisation are different between ASOs that have internationalised and those that have not. Second, the study into whether ASOs that internationalise following different internationalisation patterns present differences in the agents that provide them with financial resources.

This research is relevant for two reasons. Firstly, it deals with the financing of the ASOs, which face significant difficulties in raising financial resources due to their academic origins. These difficulties are especially prominent when ASOs enter into foreign markets, since internationalisation requires a greater funding. Secondly, analysing the internationalisation of ASOs is necessary, since these firms have inherent characteristics that differ from those of other firms (Rasmussen and Wright 2015) and may provoke that ASOs carry out a distinctive process of internationalisation. However, neither their internationalisation patterns nor the most relevant funding sources for each pattern have been widely addressed by prior literature.

The paper makes significant contributions for both the literature on AE and that on IE. A first contribution involves the identification of the most representative ASOs’ internationalisation patterns, which has been hardly addressed by prior literature. To this respect, our findings enable a connection to be established between the literature on AE and that on IE, since they confirm the assumptions on the relevance of BG patterns for ASOs, highlighting the necessity of examining the different sub-patterns of BG described in the IE literature (True Born Global -TBG- and Sporadic Born Global -SBG-). Second, contrary to prior research, which has focused on the agents who provide financial resources for ASOs involved in different stages of evolution, our study specifically examines who are the most relevant financial agents for each internalisation pattern. Therefore, this constitutes a relevant contribution for both the literature on AE and that on IE since the link between the different profiles of financial agents and the internationalisation patterns followed by ASOs provides a framework for further research into the funding of internationalised ASOs.

2. Internationalisation of ASOs

Research has recurrently pointed out that ASOs are examples of firms that internationalise early and rapidly (Andersson and Berggren 2016; Bolzani et al. 2017; Styles and Genua 2008). In fact, several authors categorise ASOs as BGs that start their international activities from their early stages of development (Franco-Leal, Soetanto, and Camelo-Ordaz 2016; Hannibal, Evers, and Servais 2016). The arguments put forward in the literature are based on the fact that these companies are characterised by the commercialisation of their knowledge developed in universities with high levels of innovation. ASOs typically possess advanced technologies that are attractive in global niche markets and are therefore natural BG candidates (Kiederich and Kraus 2009). However, these arguments have been insufficiently empirically tested.

Within the AE literature, two lines of research have addressed the internationalisation of ASOs. The first is interested in analysing the antecedents or factors that drive the internationalisation of these companies. Along this line, research focuses on analysing the effect of individual-level factors, such as: team composition (Bjørnåli and Aspelund 2012; Franco-Leal, Soetanto, and Camelo-Ordaz 2016); the international experience and capabilities of the founders (Fernández-Alles et al. 2022; Mikhailova and Olsen 2016); entrepreneurial team diversity (Bialek-Jaworska and Gabryelczyk 2016; Teixeira and Coimbra 2014); and business and managerial capabilities (Oxtorp 2014; Styles and Genua 2008). Other research analyses organisational or business-level factors such as: strategic orientation (Andersson and Berggren 2016; Teixeira and Coimbra 2014); R&D intensity (Teixeira and Coimbra 2014); firm age (Suzuki and Okamuro 2015; Teixeira and Coimbra 2014); size, location, and past performance (Teixeira and Coimbra 2014); and industrial and university networks (Mikhailova and Olsen 2016; Pettersen and Tobiassen 2012; Styles and Genua 2008). Finally, there is research that focuses on contextual factors, such as: home university characteristics (Cattaneo, Meoli, and Vismara 2015; Civera, Meoli, and Vismara 2019; Suzuki and Okamuro 2015); and governmental support (Suzuki and Okamuro 2015).

A second line, which is still in its infancy, is interested in analysing the modes of internationalisation of ASOs. On the one hand, we distinguish the research of Andersson and Berggren (2016) and Bolzani et al. (2017). The first aims to analyse whether there are differences in the internationalisation pattern of different types of ASOs: academic and student ASOs. These authors found that they responded to different patterns: BGs vs. Born Locals. The second paper analyses the characteristics of internationalised Italian ASOs and their internationalisation patterns, considering entry mode, speed of internationalisation, and geographical coverage. On the other hand, and regarding the business model, Bialek-Jaworska and Gabryelczyk (2016) analyse the business model components and related attributes of biotech spin-off activity that holds the key to implementing the internationalisation strategy. Except for Bolzani et al. (2017), these investigations have been developed through case studies. The conclusion is that the internationalisation patterns in ASOs remain unknown because the literature has explicitly and implicitly stated that these companies follow a model of rapid internationalisation. However, this fact has not always been contrasted and has been insufficiently analysed. From this limited prior research on the internationalisation patterns of ASOs, it is not easy to draw generalised conclusions regarding the potential internationalisation patterns of ASOs, since most previous studies have primarily focused on the time criterion and have omitted the study of the various dimensions that define the patterns of internationalisation within the IE literature.

In the IE literature, research has frequently focused on the analysis of two linear modes of internationalisation: Uppsala and BGs (Jones and Coviello 2005; Vissak and Francioni 2013). Linear, step-by-step, or gradual models of international growth view internationalisation as an incremental process. According to the Uppsala model, firms gradually grow to expand into international markets when they have acquired the necessary resources for internationalisation in their home markets. In contrast, BGs are early adopters of internationalisation, that is, organisations from or near their founding date seek superior international business performance and sell their outputs in multiple countries (Kuivalainen et al. 2012). Moreover, the IE literature has shown that, in addition to these two modes of internationalisation, firms can follow non-linear internationalisation processes (Vissak and Francioni 2013). Serial non-linear internationalisers have an internationalisation that is not a linear, incremental, or unidirectional path. Thus, for a variety of reasons, including difficulties in accessing financial resources and lack of international experience, incursions into foreign markets are followed by total or partial exits from international markets (de-internationalisation) and, therefore, a fluctuation in their international commitments (Aguzzoli et al. 2021). Subsequently, and after a period of international pause and activity in domestic markets, these firms may re-internationalise through what is known as re-entry or re-internationalisation (Ali 2021). Non-linear patterns are widespread. Thus, Ali (2021) notes that a quarter of international firms withdraw from foreign markets, resulting in de-internationalisation.

In this paper, due to the lack of empirical research, it cannot be assumed that most ASOs could follow a BG pattern of internationalisation. As suggested by previous studies within the IE literature (Crick 2009; Kuivalainen et al. 2012) and on AE research (Andersson and Berggren 2016; Bolzani et al. 2017; Teixeira and Coimbra 2014), we start from the general hypothesis that different international patterns may exist among ASOs, and therefore their strategy for acquiring relevant financial resources may also differ.

3. Financing of ASOs

Due to their high-tech nature, ASOs are often capital-intensive and require large amounts of funding before entering the market and generating revenues (Bock, Huber, and Jarchow 2018). Specifically, financial resources in seed capital are essential to secure funding for initial development (Fini et al. 2011; Harrison and Leitch 2010), while second-round funding finances later stages of growth (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015; Vohora, Wright, and Lockett 2004). Raising financial resources is a controversial issue for ASOs due to their academic origins. The lack of management training and experience of academic entrepreneurs makes it difficult for them to design attractive business plans for investors (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015; Munari and Toschi 2011; Wright et al. 2006). Furthermore, there are difficulties for investors attempting to evaluate the commercial potential of that incipient technology (Lockett, Murray, and Wright 2002). On the other hand, other authors have also pointed out obstacles to financing in terms of the risks inherent to the new technologies that ASOs develop, the limited presence of market relationships, and the lack of tangible assets to use as additional collateral (Correa, Tapia, and De Aguilera 2002). Finally, ASOs tend to lack a track record in markets and credibility in the eyes of market agents (Fernández-Alles and Ramos Rodríguez 2021). Therefore, the financing of ASOs becomes a problem for their creation and growth and a matter of great interest (Martínez-Martínez et al. 2021). “Studying the financing activities of the university spin-offs therefore requires more attention from both research and policy-makers” (Huynh 2016, 345).

When ASOs also consider internationalisation, the financing needs are more significant, as the internationalisation process is risky, costly, and requires many resources (Bjørnåli and Aspelund 2012; Jones, Kwansa, and Li 2020). Such resources could be devoted, for example, to becoming familiar with new regulations, identifying target markets, adapting their products to local markets, and building sales networks (Sanyal, Akram, and Singh 2021). For this reason, if the networks and relationships that ASOs maintain with agents supplying financial resources are considered essential, they are even more so for internationalised ASOs. Nonetheless, the AE literature has mainly addressed the study of ASO financing, by taking into account the most relevant financial agents in the different stages of evolution, leaving aside wheter these firms are domestic or internationalised (Franco-Leal et al. 2020; Huynh 2016; Lindstrom and Olofsson 2001). For this reason, while there is a knowledge about the most relevant financial agents for each ASOs’ growth stage, it remains unknown which are the most relevant financial agents for ASOs’ internationalisation. Despite this lack of prior research, literature has noted that domestic and internationalised ASOs may be supported by different financial agents or networks. In this sense, Jones, Kwansa, and Li (2020) argue that as the firm internationalises, sources of finance become more complex, sophisticated, and diverse. In the same vein, Dams, Allende, and Murcia (2021) point out that international growth brings a higher range of funding sources (both local and international) and greater sophistication of financing techniques. On the other hand, it is reasonable that internationalisation leads to greater international experience, a more comprehensive network of relationships, and a higher reputation, and thus eases access to more specialised, skilled, and expert sources of finance.

Based on these arguments, we propose:

Hypothesis 1.

There are differences between the agents who finance internationalised ASOs and those who finance non-internationalised ASOs.

4. Financing and internationalisation patterns for ASOs

Within the IE literature, there is very little research on internationalisation and financing decisions (Jones, Kwansa, and Li 2020). In the context of ASOs, this research remains in its infancy, and it mainly focuses on the analysis of the relationships between forms of financing and different stages of evolution (Franco-Leal et al. 2020; Huynh 2016; Lindstrom and Olofsson 2001) and for different business models (Martínez-Martínez et al. 2021). However, the analysis of the different financial agents relevant to each of the internationalisation patterns of ASOs has yet to be addressed.

We therefore focus on the relationships between different patterns of internationalisation, linear and non-linear, and the financial agents that support them.

4.1. Financing of ASOs with BG patterns

Born Globals are companies that internationalise in a committed manner in the early stages of their development, and hence BGs obtaining financial resources in these stages becomes a crucial issue, not only for the technological development of their products but also to assume the high costs of international marketing (Laanti, Gabrielsson, and Gabrielsson 2007; Luostarinen and Gabrielsson 2004). The more aggressive the global expansion of BGs becomes, the more solid and structured are the sources of finance they need. In this respect, Gabrielsson, Sasi, and Darling (2004, 593) point out that “Born Globals need to respond very fast to opportunities in the global marketplace. Rapid globalisation is expected to put extremely high pressure on organising financial resources for a faster, deeper, and more expansive global commitment”.

In this research, we consider that ASOs mainly turn to two sources of funding for early internationalisation: Governmental institutions and Venture Capital (VC) firms. This is mainly because founders’ informal financial resources are often insufficient to cover the costs for international developments. Moreover, debt financing is not an option in the seed and early stages of ASOs since they lack assets that may serve as collateral (Bock, Huber, and Jarchow 2018; Grilli and Murtinu 2015; Knockaert, Spithoven, and Clarysse 2010).

On the one hand, given that ASOs have difficulty accessing private financing in their creation stage, they usually try to obtain part of their seed capital through governmental institutions that provide financial resources at reduced cost in conditions of uncertainty (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015; Rodeiro-Pazos, Fernández-López, and Rodríguez-Sandías 2010; Vohora, Wright, and Lockett 2004). In this respect, Suzuki and Okamuro (2017) point out that, for the internationalisation of ASOs, it is essential to receive public support from national or international governments. In particular, during the initial stages after the establishment of an ASO, in which private sector firms are hesitant to invest, ASOs significantly benefit from public support. “Receiving public support is a vote of confidence for a start-up’s financial stability. With this endorsement, the venture has the stability and strength necessary to handle the technological and market risk that comes with expanding its business” (Suzuki and Okamuro 2017, 4). Governmental funding can provide two advantages for the early internationalisation of ASOs. First, it acts as bridge financing to overcome the financial gap in the early stages of development, thereby stimulating early growth in foreign markets. Second, it can serve as a quality signal to external investors, such as VC firms (Bock, Huber, and Jarchow 2018; Gubitta, Tognazzo, and Destro 2016).

Research has contrasted the relevance of governmental institutions for the financing of the early international growth of ASOs. Wright et al. (2006) identify several European countries that have developed governmental initiatives to finance high-technology ASOs at their initial stages of evolution. Rasmussen (2008) finds that several Canadian programs have been set up to provide grants and seed funding in the early development stage of ASOs. Thus, national and international governmental funding sources become highly relevant for the early internationalisation of these companies.

Regarding private funding sources, BGs mainly seek funding from international and domestic VC investors (Park and LiPuma 2020; Woo 2019). Following Woo (2019), our research maintains that ASOs accessing VC firms have a higher propensity to become BGs. In other words, VC firms becomes the most relevant source of funding for these firms to internationalise early and to attain high sales volume in global markets.

On the one hand, although VC firms are not always interested in investing in ASOs in their early stages of development, this may be mitigated by the level of the technological capacity of the ASOs or by the technological potential of the knowledge they intend to commercialise in the markets, thereby leading VC firms to provide funding to ASOs with these characteristics (Andersson and Berggren 2016; Bolzani et al. 2017). Rather than environmental uncertainty, the decision of VC firms to invest internationally is driven by the availability of innovative investment opportunities derived from the knowledge held by these firms (Guler and Guillen 2004).

Based on the line of argument of Woo (2019) and Park and LiPuma (2020), there are three reasons why VC firms backing is relevant for BG patterns. We argue that if VC firms become investors in an ASO, then they will participate in their strategic decisions and hence show potential opportunities in international markets and bring their experience and knowledge regarding how to operate in those markets, thereby influencing the ASO’s decision to internationalise at an early stage (Fernhaber and McDougall-Covin 2009; Park and LiPuma 2020). Park and LiPuma (2020) point out that VC firms can provide the firms in which they have invested with foreign market knowledge that facilitates the internationalisation of portfolio companies. Such knowledge, offered by VC firms directly and as advice, can help young ventures internationalise, since market knowledge, knowledge of internationalisation processes, and of international operations are crucial prerequisites to market entry. In this respect, Woo (2019) considers that VC investors can help towards preventing major mistakes in internationalisation strategy and towards reducing the cost of early internationalisation through the knowledge they can bring from international markets, thereby leading the management of the companies in which they invest to internationalise early.

On the other hand, venture capitalists that invest in high-potential early-stage ASOs can create an international market network for the early internationalisation of these companies (Oviatt and McDougall 2005). A VC firm that has built social capital can help its portfolio company find a potential business partner that possesses complementary assets for it to invest in the venture (Woo 2019).

Finally, ASOs in their early stages of development lack the reputation and reliability needed to address international markets. In such an uncertain situation, VC firm funding helps certify the reliability of ASOs, and it can serve as a signal of venture quality by boosting the early internationalisation process of these firms (Park and LiPuma 2020; Stuart, Hoang, and Hybels 1999; Woo 2019).

In short, the decision of VC firms to invest in ASOs in their early development stages is driven by the availability of innovative investment opportunities that emerge from the high potential of the knowledge held by ASOs. VC firms can provide these firms with funding and specific resources, such as international knowledge, networks, and reputation, that could help expand and develop the ASO internationally in a prompt and committed manner.

Hypothesis 2.

ASOs following the BG internationalisation patterns are mainly financed by governmental institutions and VC firms.

Financing of ASOs with Uppsala patterns

The Uppsala pattern of internationalisation involves a gradual process in which entry into international markets, usually geographically and psychologically close, is preceded by successful activity in a domestic market (Moen, Sørheim, and Erikson 2008). Gabrielsson, Sasi, and Darling (2004, 593) point out that “firms entering foreign markets step-by-step can adjust their resources and capabilities gradually”.

From a theoretical point of view, both the resource-based view (RBV) and agency theory explain the leap to international markets and the access to a wide variety of agents to finance the internationalisation strategy. On the one hand, according to RBV, firms that internationalise with this pattern would have numerous resources, in terms of experience and credibility, as well as a set of relationships built up in the previous stages of growth in domestic markets, making it easier for them to access the expert, skilled, and professional sources of finance needed for internationalisation (Zucchella and Ramusino 2008). In this sense, it is expected that diverse financial agents, both from the public and private spheres and the national and international context, will provide financial resources to internationalise those ASOs that are growing according to the Uppsala pattern. On the other hand, according to agency theory, the ASOs (main) would have long accumulated experience and a track record in domestic markets, thereby presenting fewer information asymmetries with market financial agents (agents) (Manolova, Manev, and Gyoshev 2014). Therefore, it would be easier to receive funding from different agents.

On the other hand, since the Uppsala pattern of internationalisation occurs in consolidation stages, it is expected that ASOs following this pattern will access the financial resources available at this stage. In the consolidation stage, ASOs have progressively distanced themselves from the academic environment to expand and develop and immerse themselves in an essentially commercial and highly competitive environment (Gübeli and Doloreux 2005; Vohora, Wright, and Lockett 2004). It, therefore, seems logical that it is not the academic agents but the financial market agents who provide financial resources in this pattern of internationalisation (Franco-Leal et al. 2020; Vohora, Wright, and Lockett 2004). Specifically, private investors play a crucial role in the development and growth of ASOs (Rodríguez-Gulías et al. 2018).

Among the different agents providing financial resources for this pattern, our proposal includes several of those identified in the previous literature: specifically, equity investors (VC firms and other investors) and governmental institutions (Franco-Leal et al. 2020; Zucchella and Ramusino 2008). Previous research has already pointed out the financing of equity investors to high-growth-potential companies (Zucchella and Ramusino 2008). Thus, Park and LiPuma (2020) consider it the norm for funding from VC firms to lead to funding from other financial agents, such as angels, incubators, crowdfunding, and government bodies. Receiving funding from equity investors implies that these agents have positively evaluated the company for its track record in the domestic market, specifically for its vision, business model, resources, and competencies (Zucchella and Ramusino 2008). The financing of each of the proposed agents is analysed below.

First, the literature has widely noted VC investors as critical agents for the growth of ASOs (Franco-Leal et al. 2020; Ortín-Ángel and Vendrell-Herrero 2010; Rodríguez-Gulías et al. 2018) and for their internationalisation (Fernhaber and McDougall-Covin 2009). Venture capitalists are investors who want to protect their investment and are prepared to do whatever it takes to ensure a high return (Fernhaber and McDougall-Covin 2009), and hence they tend to financially back business projects that have a high potential for future growth. They assess such growth potential based on the experience and success of the company and its management team in domestic markets and the credibility of the companies. Moreover, VC firms that positively value ASOs for being established in domestic markets not only provide financial resources for internationalisation but also knowledge, market experience, and reputation that could also lead to access to other resources needed for internationalisation (Fernhaber and McDougall-Covin 2009; Park and LiPuma 2020). The reasons that lead VC firms to financially support Uppsala ASOs differ from those underlying in the case of BG ASOs.

While BG ASOs are considered by VC firms as incipient business projects with high technological potential in international markets, Uppsala ASOs are mainly supported by their reputation and successful track records in national markets, since these constitute a sign of credibility and confidence for their international activities. This explains the willingness of VC firms to provide ASOs with the necessary resources (knowledge, networks, and reputation, among others) for their successful internationalisation.

Secondly, and concerning other investors, we highlight banks and crowdfunding. For banks, financing is expected from this type of agent since the reputation of companies already consolidated in the market is one of the elements most valued by banks for their financial backing (Sist 2014). The IE literature has highlighted the relevance of this agent (De Bonis, Ferri, and Rotondi 2015; Jones, Kwansa, and Li 2020; Sist 2014). Jones, Kwansa, and Li (2020) note that firms that increase their presence in international markets are expected to use debt financing. De Bonis, Ferri, and Rotondi (2015) argue that international firms could benefit from a strong relationship with their main bank, especially if it is also internationalised. Like VC firms, banks support internationalisation not only with resources, but also with the provision of non-lending services to firms, such as high-value consulting.

On the other hand, regarding other forms of financing such as crowdfunding, recent research shows that the entrepreneur’s social network influences the success of crowdfunding. Since ASOs following the Uppsala pattern already have a well-built domestic network of relationships, this would facilitate this form of financing. Crowdfunding has been noted in the literature as a new trend in equity financing for new ventures to help fund high-growth start-ups that are frequently found in the high-technology sector or to provide expansion capital to existing businesses (Bembom and Schwens 2018; Cumming and Johan 2017). This form of financing makes the firm internationally visible and greatly increases the number of potential investors (Bembom and Schwens 2018).

Finally, the entrepreneurial funding literature has pointed to governments as one of the financial sources most frequently used by ASOs in Spain (Beraza Garmendia and Rodríguez Castellanos 2011). Specifically, governmental funding tends to be expected to overcome those financing problems that ASOs usually face when deciding to internationalise (Angulo-Ruiz, Pergelova, and Wei 2018; Hossinger, Chen, and Werner 2020; Rasmussen and Sørheim 2012). According to Angulo-Ruiz, Pergelova, and Wei (2018), governmental funding provides access to new technologies, new markets, and raw materials that would facilitate their internationalisation strategy. “Government backing may provide resource slack, which further allows experimentation with new strategies and innovative projects and increases the willingness of firms to pursue new opportunities […] arguably in international markets” (Angulo-Ruiz, Pergelova, and Wei 2018, 190). While previous studies have pointed out the importance of this agent in financing early stages by providing seed capital (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015; Huynh 2016; Vohora, Wright, and Lockett 2004), this paper proposes that governments are also important agents in providing financial resources in consolidation stages. Academic spin-offs in a consolidation stage can receive governmental support, and specific programmes exist to support the international expansion of firms with a successful track record in the domestic market. Thus, while governmental support for BG ASOs is explained by the difficulty in finding private investors in the early stages of international growth, governments are interested in supporting Uppsala ASOs due to the notorious reputation of these firms in domestic markets.

These arguments lead to the following hypothesis:

Hypothesis 3.

ASOs following the Uppsala internationalisation patterns are mainly financed by VC firms, other investors, and governmental institutions

4.2. Financing of ASOs with a non-linear pattern

De-internationalisation, which implies the full or partial exit of a firm from the international market, is very common among small firms or firms in their early internationalisation stages (Ali 2021). This small size and early internationalisation characteristics are often present in ASOs, making them clear candidates for de-internationalisation.

The literature points out three elements as the principal causes of voluntary de-internationalisation of companies. First is the lack of resources, specifically the difficulties acquiring financial resources. Failure in international markets is often accompanied by financial losses, which makes these companies unattractive and lacking in credibility in the eyes of financial agents such as VC firms (Benito and Welch 1997). Second, the lack of international experience of the entrepreneurial team is often another reason for de-internationalisation (Reiljan 2004). This limitation can result in academic entrepreneurs unfamiliar with international venture capitalists or venture capitalists not valuing these companies positively due to the lack of credibility of their founding teams. Finally, academic entrepreneurs’ lack of training and of management experience could result in a deficient pre-investment analysis (Reiljan 2004). In these circumstances, entrepreneurs lack credibility (Van Geenhuizen and Soetanto 2009), and/or the ASO project is insufficiently attractive to access critical funders. As a result, the link of these companies with the private sector is relatively weak, causing them to have problems in accessing finance (Rodeiro-Pazos, Rodríguez-Gulías, and Fernández-López 2014). It can therefore be expected that de-internationalised companies have resorted to public research funds and not to equity financing. According to Martínez-Martínez et al. (2021, 398), “ASOs that do not use equity financing from external partners base their financial models on access to public research funds”. For these authors, this type of public funding from governments would position ASOs in the markets and generate confidence in clients, thereby providing, among other things, international security.

Moreover, de-internationalised firms have often undergone early internationalisation, and after this incursion, they withdraw from foreign markets for any of a number of internal and external reasons, financial support problems being one of the most relevant (Nummela, Saarenketo, and Loane 2016; Van Geenhuizen and Soetanto 2009; Vissak and Francioni 2013). After their international experience, they return to the domestic market. It is therefore logical to expect that, subsequent to their failed international incursion, the agents providing financial resources in this internationalisation pattern are close to the ASOs, and with whom the ASOs are familiar. Specifically, the withdrawal from foreign markets and the return to the domestic market usually leads ASOs to re-establish relationships with academic agents, from whom they can obtain financial resources at lower cost (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015).

Contrary to certain studies that suggest that other private investors are needed to provide financial and other resources and networks that the government could not otherwise provide (Dams, Allende, and Murcia 2021; Neubert 2016), we propose that it is only public funds from governmental and academic institutions that financially support ASOs in this pattern.

Based on these arguments, we propose:

Hypothesis 4.

ASOs following the non-linear internationalisation patterns are mainly financed by governmental institutions and academic agents

5. Methodology

5.1. Sample and data collection

The population of the study consisted of Spanish ASOs founded during the period 2003–2018. In order to obtain information on this population, the 70 Spanish TTOs were contacted via electronic mail and telephone. Specifically, they provided the primary data of ASOs (firm name, telephone number, e-mail, website, date of constitution, research group of origin, and founder’s information). From the information gathered, we created a database of 628 ASOs from 51 Spanish universities. A preliminary questionnaire was then designed from a detailed literature review, which was pre-tested through in-depth interviews with the academic founders and managers of three of the previously identified ASOs. Once their recommendations had been considered, we obtained the final version of the questionnaire, composed of 21 questions related to the internationalisation process of ASOs, their strategic orientation, the composition of the management teams, structure of the networks, performance, and human and psychological capital.

The final version of the questionnaire was then sent through the online platform SURVIO to the academic founders of the 628 ASOs that comprised the database. We finally received 173 valid responses, resulting in an effective response rate of 27.6%. In order to corroborate the absence of non-response bias, a Levene’s homogeneity of variance test was conducted. Specifically, the age of the responding ASOs was compared to those that failed to respond to the questionnaire. The value of the Levene statistic was 1.639 (p > 0.1), which shows that the responding firms did not differ significantly from non-respondents with respect to this variable, thereby indicating the non-existence of a non-response bias. Lastly, we also controlled for common method bias (CMB). Drawing on suggestions by Podsakoff (2003), we carried out both procedural and statistical methods to address the CMB issue. Concerning the procedural remedies, all the respondents were informed about the mechanisms that certified the anonymity of their responses. Moreover, all the questionnaires included an introductory paragraph, which explained the academic objective of the research, and a clear set of instructions to facilitate the completion of the survey. Regarding the statistical analysis, Harman’s single factor test was performed. Results of the unrotated factor solution showed that several factors were obtained and that the first extracted factor explained 32% of the overall variance, which indicated that CMB exerts no impact on our research.

5.2. Variables

5.2.1. Entry time

The prior literature has consistently noted the time lag from foundation to internationalisation as a valid measure for the identification of the internationalisation pattern followed by firms. Specifically, a time lag of three years is the most commonly used criterion for BG firms (Knight and Cavusgil 2004; Kuivalainen et al. 2012). In order to identify the international pattern of ASOs, we asked academic entrepreneurs for the number of months from foundation to the first sales of the ASO in foreign markets. A categorical variable was then created, which identified the ASOs that started the international activity after the first 36 months with the value “0”; with the value “1” for those ASOs that started the international activity within a maximum time lag of 36 months from the foundation; and with the value “2”, for non-international ASOs.

5.2.2. Scale

The scale of internationalisation defines the extent, degree, or level of a firm’s international operations (Baum, Schwens, and Kabst 2015; Taylor and Jack 2013). Following the prior literature, we measured the scale as the percentage of foreign sales to total sales. In order to analyse the evolution of the scale, it was measured in two different periods: during the first three years of ASO’s activity, and at the time when the questionnaire was completed (Głodowska, Maciejewski, and Wach 2019; Kim 2017; Taylor and Jack 2013). To this end, academic entrepreneurs were required to select one option from among the following intervals in each period: no international sales; less than 25% of total sales are international sales; 26%-35%; 36%-50%; 51%-75%; more than 75%. Following prior research, our focus was mainly on the 25% threshold since it has been commonly accepted as the critical value for the identification of the various international patterns (Knight and Cavusgil 2004; Kuivalainen et al. 2012; Taylor and Jack 2013). According to Kuivalainen et al. (2012), a percentage of foreign sales to total sales of 25% implies that a firm is taking its international operations seriously and that internationalisation is not sporadic. From this approach, we created a categorical variable, which identified all the possible evolutionary patterns of the scale of ASOs: 1 (non-international ASOs in both periods); 2 (ASOs with a scale of less than 25% in both periods); 3 (ASOs with a scale of more than 25% in both periods); 4 (ASOs that had no international activity during the first three years, but had a scale of less than 25% at the time when the questionnaire was completed); 5 (ASOs that had no international activity during the first three years, but had a scale of more than 25% at the time when the questionnaire was completed); 6 (ASOs that had a scale of less than 25% during the first three years, but had a scale of more than 25% at the time when the questionnaire was completed); 7 (ASOs that had increased the rate of foreign sales, exhibiting in both periods a scale of more than 25%); 8 (ASOs that had a scale of more than 25% during the first three years, but had no international activity at the time when the questionnaire was completed); 9 (ASOs that had a scale of less than 25% during the first three years, but had no international activity at the time when the questionnaire was completed); 10 (ASOs that had a scale of more than 25% during the first three years, but had a scale of less than 25% at the time when the questionnaire was completed); 11 (ASOs that had decreased the rate of foreign sales, exhibiting in both periods a scale of more than 25%).

5.2.3. Research group

In order to analyse the origin of ASOs and their potential effect on their international activities, academic entrepreneurs were asked about the research group from which the firm had emerged. A categorical variable was then created, which grouped all the responses into the following categories: 1 (technology); 2 (economic sciences, law, and humanities); 3 (biology and environment); 4 (physics, chemistry, and mathematics); 5 (health sciences).

5.2.4. Scope

The scope of internationalisation describes the concentration and diversification of the firm’s international activities (Głodowska, Maciejewski, and Wach 2019). To examine the degree of geographical proximity of the international markets of ASOs, academic entrepreneurs selected the geographical areas in which the ASO had operated during the first years from its foundation and the geographical areas in which ASO was operating at the time when the questionnaire was completed. To this end, the seven following options were offered: Europe, South America, North America, North Africa, Africa, Asia, and Oceania.

5.2.5. Global technological competence

Global technological competence refers to the firm’s technological capabilities relative to its direct competitors in its industry (Knight and Cavusgil 2004). In order to measure the global technological competence, and drawing on Knight and Cavusgil (2004), academic entrepreneurs were asked to indicate their degree of agreement with the following statements on a 5-point Likert scale (1 = strongly disagree; 5 = strongly agree): our firm is at the leading technological edge of our industry in this market; we invented a lot of the technological capabilities embedded in this product; compared with local competitors, we are often first to introduce product innovations or new operating approaches; we are internationally recognised for technologically superior products. The scale demonstrated an acceptable internal consistency (α = 0.775), higher than the 0.70 level recommended by Nunnally and Bernstein (1994). Furthermore, the sample adjustment can also be regarded as correct (KMO = 0.782), and the percentage of total variance explained is 57.98%.

5.2.6. Target market

Drawing on Hennart (2014), academic entrepreneurs were required to respond to whether the target market of the ASOs was a market niche or a mass market. Responses were classified through a dichotomous variable (1: niche market; 2: mass market).

5.2.7. Financial resources

Drawing on the classification of agents by Fernández-Alles, Camelo-Ordaz, and Franco-Leal (2015) and Sousa-Ginel, Franco-Leal, and Camelo-Ordaz (2017), we asked academic entrepreneurs for the degree to which the following agents provide the financial resources necessary for ASO internationalisation: academic actors; governmental institutions; VC firms; and other investors (banks and crowdfunding). Specifically, a 5-point Likert scale was used (1: very low degree; 5; very high degree).

5.3. Analysis and results

In order to test our research hypotheses, a two-step statistical analysis was performed. First, a cluster analysis was carried out that included the entry time and scale of internationalisation as the relevant factors that determine the internationalisation pattern followed by each group of ASOs (Baum, Schwens, and Kabst 2015; Knight and Cavusgil 2004; Kuivalainen et al. 2012). This multivariate technique enables the existence of different groups of ASOs to be determined with the maximum homogeneity between the firms that compose each group and a high degree of differentiation between the different clusters (Everitt et al. 2011; Fernandez-Alles et al. 2019). Following the recommendations by Hair et al. (1998), our cluster variables (entry time and scale of internationalisation) were first transformed into standardised z-scores. A two-stage cluster analysis was then carried out, which combined hierarchical agglomerative clustering with k-means clustering (Bouckenooghe et al. 2005; Escamilla-Fajardo, Núñez-Pomar, and Calabuig 2021). Specifically, we made use of a hierarchical agglomerative clustering technique following the criterion of Ward’s minimum variance, since this procedure is especially recommended for small samples, which resulted in groups with minimum intra-group variance and a maximum homogeneity within the groups (Pérez-López 2009; Zinga, Matos Coelho, and Carvalho 2013). The cluster solution obtained from the hierarchical analysis was also employed to perform a non-hierarchical K-mean analysis using the means of the variables obtained from each cluster solution as initial centres.

In a second step, once the ASOs had been categorised into their different internationalisation patterns, a series of ANOVA analyses of variance and post-hoc tests (Games-Howell and Tukey) were performed in order to analyse the existence of significant differences between the groups of ASOs in terms of their access to the financial resources necessary for the international activity. Specifically, the Tukey test enables comparisons between each pair of clusters for the variables that comply with the assumption of the homogeneity of variances, whereas the Games-Howell test is recommended when the assumption of the homogeneity of variances does not hold (Hair et al. 2001; Pardo and Ruiz 2002; Simón-Moya, Revuelto-Taboada, and Fernández-Guerrero 2014).

The results of the hierarchical analysis revealed that, after analysing the increases in the agglomeration coefficient and the dendrogram, a solution was found between three and five clusters. Drawing on Hair et al. (1998), we tested the three-, four-, and five-cluster solutions with the application of non-hierarchical k-means analysis, by employing the initial centres of the hierarchical analysis. From the results of k-means analysis and the evaluation of the different groups under the foundations of the theory (Hair et al. 1998), the solution of five clusters was chosen. Table 1 shows the descriptive analysis of the five clusters obtained and the ANOVA analyses that confirm the statistically significant difference between the clusters (p < 0.001).

Table 1. ANOVA and descriptive analysis of clusters.

	Entry time			Scale
Cluster	Item	N	%	Item	N	%
Cluster 1 Non-international (n=78)	Non-international ASOs	78	100%	Without changes (non-international ASOs)	78	100%
Cluster 2 True Born Global (n=50)	Less than 36 months	50	100%	From less than 25% to more than 25%	34	68%
				Without changes (more than 25%)	16	32%
Cluster 3 Sporadic Born Global (n=27)	Less than 36 months	27	100%	Without changes (less than 25%)	27	100%
Cluster 4 Uppsala Model (n=12)	More than 36 months	12	100%	From non-international ASO to less than 25%	6	50%
				From non-international ASO to more than 25%	6	50%
Cluster 5 Non-linear Model (n=6)	Less than 36 months	6	100%	From more than 25% to less than 25%	3	50%
				From more than 25% to more than 25% (reduction)	1	16.7%
				From more than 25% to non-international ASO	1	16.7%
				From less than 25% to non-international ASO	1	16.7%
F	34.706			0.000***
p Value	150.245			0.000***

As Table 1 reflects, cluster 1 (n = 78) comprises the ASOs not involved in any internationalisation process. Cluster 2 (n = 50) and cluster 3 (n = 27) can be classified as “BG ASOs” since all the ASOs of both groups started their international activity within the first 36 months of their foundation. However, it is possible to note a relevant difference between both clusters: all the ASOs of cluster 2 obtained more than 25% of their sales from foreign markets within the first three years, maintaining or increasing such rate at the time of the survey, whereas the rate of foreign sales for ASOs belonging to cluster 3 was less than 25% within the first three years and has not changed in the years since. For this reason, cluster 2 should be classified as “TBG ASOs” and cluster 3 as “SBG ASOs”. Interestingly, this finding confirms the arguments of prior research regarding the predominant nature of international ASOs as BG firms since, in our sample, 81% of international ASOs are classified as BG ASOs. For their part, clusters 4 and 5 present scarce representativeness. On the one hand, the international pattern of ASOs of cluster 4 (n = 12) can be defined as “Uppsala”, since all of the firms belonging to cluster 4 started the international activity after the first 36 months, and exhibited different results in terms of foreign sales (50% had less than 25%, while the other 50% had more than 25%). Lastly, ASOs of cluster 5 (n = 6) follow a non-linear internationalisation pattern since, despite carrying out an early internationalisation process, the evolution of their foreign sales is decreasing. Additionally, the profiles of the groups are completed according to other variables of interest to our research. Thus, Table 2 describes the percentages and means of the clusters identified according to the type of variable included. Non-international ASOs (cluster 1) have emerged from diverse research groups (technology: 30.8%; biology and environment: 20.5%; economic sciences, law, and humanities: 17.9%; physics, chemistry, and mathematics: 15.4%; health sciences: 15.4%), and mainly operate in market niches (78.7%) and exhibit the lowest global technological competence (mean: 3.2). Those ASOs known as BGs (cluster 2) come primarily from technological groups (50%), operate primarily in niche markets located in Europe (90%), North America (56%), South America (56%), and Asia (52%), and have the highest global technological competence (mean: 4.1). The origin of SBG ASOs (cluster 3) is mainly from technological (44.4%) and environmental groups (25.9%), operate in both niche (55.6%) and dominant (44.4%) markets, are predominantly located in European markets (74.1%), and exhibit a lower global technological competence than BG ASOs (mean: 3.8). Uppsala ASOs (cluster 4) have a predominant technological origin (50%), mainly operate in dominant markets (66.7%), and their focus is on Europe (91.7%), South America (66.7%), and Asia (50%). Lastly, non-linear ASOs (cluster 5) have a heterogeneous origin (technology: 33.3%; biology and environment: 33.3%; economic sciences, law, and humanities: 16.7%; health sciences: 16.7%), operate entirely in niche markets mainly located in Europe (83.3%), and exhibit a reduced global technological competence (mean: 3.6).

Table 2. Profile of clusters

	Research group			Target market			Geographical scope			Global technological competence
Cluster	Item	N	%	Item	N	%	Item	N	%
Cluster 1 Non-international (n=78)	Technology	24	30.8%	Niche	59	78.7%				3.2
	Biology and environment	16	20.5%	Mass market	16	21.3%
	Economic sciences, law, and humanities	14	17.9%
	Physical, chemical and mathematics	12	15.4%
	Health sciences	12	15.4%
Cluster 2 True Born Global (n=50)	Technology	25	50%	Niche	33	66%	Europe	45	90%	4.1
	Biology and environment	11	22%	Mass market	17	34%	North America	28	56%
	Physical, chemical and mathematics	7	14%				South America	28	56%
	Health sciences	5	10%				Asia	26	52%
	Economic sciences, law, and humanities	2	4%				Oceania	7	14%
							North Africa	6	12%
							Africa	5	10%
Cluster 3 Sporadic Born Global (n=27)	Technology	12	44.4%	Niche	15	55,6%	Europe	20	74,1%	3.8
	Biology and environment	7	25.9%	Mass market	12	44,4%	North America	10	37%
	Health sciences	4	14.8%				South America	8	29,6%
	Physical, chemical and mathematics	3	11.1%				Asia	8	29.6%
	Economic sciences, law, and humanities	1	3.7%				North Africa	3	11.1%
							Oceania	3	11.1%
Cluster 4 Uppsala Model (n=12)	Technology	6	50%	Niche	4	33,3%	Europe	11	91.7%	3.9
	Biology and environment	4	25.9%	Mass market	8	66,7%	South America	8	66.7%
	Physical, chemical and mathematics	2	16.7%				Asia	6	50%
							North America	4	33.3%
							Africa	3	25%
							Oceania	3	25%
							North Africa	1	8.3%
Cluster 5 Non-linear Model (n=6)	Technology	2	33.3%	Niche	6	100%	Europe	5	83.3%	3.6
	Biology and environment	2	33.3%				South America	2	33.3%
	Economic sciences, law, and humanities	1	16.7%				North America	1	16.7%
	Health sciences	1	16,7%				Asia	1	16.7%
							Oceania	1	16.7%

Once the ASOs of our sample were categorised into their various internationalisation patterns, a series of ANOVA analyses of variance and post-hoc tests were carried out to validate our research hypotheses. First, in order to analyse the existence of significant differences between the degree to which academic actors, governmental institutions, VC firms, and other investors provide financial resources to non-international and international ASOs (Hypothesis 1), we proceeded to group clusters 2, 3, 4, and 5 into a single group, which contained all the international ASOs, independently of the internationalisation pattern. An ANOVA analysis of variance was then carried out for two groups: non-international ASOs (cluster 1; n = 78) and international ASOs (clusters 2, 3, 4, and 5; n = 95). The results of the ANOVA analysis reveal the existence of significant differences in the degree to which governmental institutions (p < 0.001), VC firms (p < 0.001), and other investors (p < 0.05) provide non-international ASOs and international ASOs with financial resources (Table 3). Hypothesis 1 can therefore be confirmed. Specifically, the descriptive analysis offered in Table 4 shows that the financial support of governmental institutions (mean = 2.80), VC firms (mean = 2.55), and other investors (mean = 2.53) is more prevalent for international ASOs than for non-international ASOs.

Table 3. ANOVA analysis for non-international ASOs (cluster 1) and international ASOs (clusters 2, 3, 4, and 5).

Agent		Sum of squares	Df	Root mean square	F	Sig.
Academic actors	Inter-groups	2.741	1	2.741	2.073	0.152
	Intra-groups	216.880	164	1.322
	Total	219.620	165
Governmental institutions	Inter-groups	5.998	1	5.998	3.554	0.007**
	Intra-groups	276.773	164	1.688
	Total	282.771	165
VC firms	Inter-groups	0.489	1	0.489	0.277	0.002**
	Intra-groups	275.865	156	1.768
	Total	276.354	157
Other investors	Inter-groups	12.541	1	12.541	5.135	0.025*
	Intra-groups	378.529	155	2.442
	Total	391.070	156

*p <0.05 **; p < 0.001.

Table 4. Descriptive analysis for non-international ASOs (cluster 1) and international ASOs (clusters 2, 3, 4, and 5).

Agent	Cluster	N	Mean	sd	Lower limit for mean (95%)	Upper limit for mean (95%)	Min.	Max.
Academic actors	Non-international ASOs	74	1.93	1.296	1.63	2.23	1	5
	International ASOs	92	1.67	1.018	1.46	1.88	1	5
	Total	166	1.79	1.154	1.61	1.97	1	5
Governmental institutions	Non-international ASOs	73	2.22	1.294	1.92	2.52	1	5
	International ASOs	93	2.80	1.303	2.37	2.93	1	5
	Total	166	2.54	1.309	2.33	2.68	1	5
VC firms	Non-international ASOs	70	1.79	1.261	1.48	2.09	1	5
	International ASOs	88	2.55	1.382	1.60	2.19	1	5
	Total	158	2.21	1.327	1.94	2.39	1	5
Other investors	Non-international ASOs	68	2.06	1.535	1.69	2.43	1	5
	International ASOs	89	2.53	1.584	2.30	2.96	1	5
	Total	157	2.33	1.583	2.10	2.57	1	5

In order to test Hypotheses 2, 3, and 4, we first conducted an ANOVA analysis of variance of the degree to which academic actors, governmental institutions, VC firms, and other investors provide international ASOs (clusters 2, 3, 4, and 5) with financial resources. To this end, Table 5 reveals that the degree to which academic actors, VC firms, and other investors provide ASOs with financial resources differs significantly (p < 0.05) in terms of the internationalisation pattern followed by the ASOs, whereas the financial support of governmental institutions is equally relevant for the four clusters of international ASOs. As mentioned previously, the prevalence of governmental institutions for non-international is particularly high for non-international ASOs (Table 4; mean = 2.80), which allows us to infer that the four clusters of non-international ASOs rely strongly on the financial resources provided by this agent.

Table 5. ANOVA analysis for international ASOs (clusters 2, 3, 4, and 5).

Agent		Sum of squares	Df	Root mean square	F	Sig.
Academic actors	Inter-groups	6.791	3	2.264	2.278	0.045*
	Intra-groups	87.427	88	0.993
	Total	94.217	91
Governmental institutions	Inter-groups	7.870	3	2.263	1.573	0.201
	Intra-groups	148.410	89	1.668
	Total	156.280	92
VC firms	Inter-groups	11.916	3	3.972	2.164	0.038*
	Intra-groups	154.163	84	1.835
	Total	166.080	87
Other investors	Inter-groups	22.318	3	7.439	3.187	0.028*
	Intra-groups	198.446	85	2.335
	Total	220.764	88

*p < 0.05.

With the aim of analysing the nature of such differences, the Levene test and post-hoc tests were conducted. First, the Levene test was employed for the verification that the variables comply with the assumption of the homogeneity of variances. In this respect, the result of the Levene test reveals the presence of homogeneity of variances between clusters 2, 3, 4, and 5 when the financial support of other investors is examined (p > 0.1). In contrast, it is not possible to assume the homogeneity of variances in the analysis of academic actors (p < 0.05) and VC firms (p < 0.001). From these results, the Tukey post-hoc test was conducted for the analysis of differences between each pair of clusters for the variable that complies with the assumption of homogeneity of variance, that is, other investors (Table 6). For its part, the Games-Howell post-hoc test was conducted for the analysis of differences between each pair of groups for the variables that do not comply with such an assumption, that is, academic actors and VC firms (Tables 7 and 8). The results of Table 6 show that the degree to which ASOs belonging to cluster 3 (SBG ASOs) obtain financial resources from academic actors is significantly higher than the degree to which the TBG ASOs (p < 0.1), Uppsala ASOs (p < 0.05), and non-linear ASOs (p < 0.05) obtain such resources. Additionally, comparisons of the weights of academic actors in the founding of the ASOs belonging to the four clusters reveal a higher prominence of this founding source in SBG ASOs (mean = 2.08) with respect to the other groups. These differences are especially notorious in the case of non-linear ASOs (mean = 1.17), whereas TBG ASOs (mean = 1.59) and Uppsala ASOs (1.42) exhibit similar prominence. Regarding VC firms, Table 8 reveals that the degree to which they provide international ASOs with financial resources is significantly higher for true BG ASOs (cluster 2; p < 0.01), sporadic BG ASOs (cluster 3; p < 0.01), and Uppsala BG ASOs (cluster 4; p < 0.05) than for non-linear ASOs (cluster 5). This result is reinforced by the fact that there is no significant statistical difference between clusters 2, 3, and 4 (p > 0.1). Moreover, the analysis of the weights of the four clusters shows that VC funding is especially prominent for Uppsala ASOs (mean = 2.50), SBG ASOs (mean = 2.17), and TBG ASOs (mean = 1.70), whereas this type of funding is less present in non-linear ASOs (mean = 1.00). Lastly, Table 6 offers the results for the post-hoc analysis of the degree to which other investors provide international ASOs with financial resources. From the information contained in Table 6, it is possible to infer that this agent is especially relevant for Uppsala ASOs (cluster 4), since the degree to which ASOs of cluster 4 obtain financial resources from other investors is significantly higher than the degree to which true BG ASOs (cluster 2; p < 0.05), sporadic BG ASOs (cluster 3; p < 0.05), and non-linear ASOs (cluster 5; p < 0.001) attain such resources. This is reinforced by the absence of statistical differences between clusters 2, 3, and 5 (p > 0.1). Regarding the analysis of prevalence, the results highlight the notorious presence of other investors in Uppsala ASOs (mean = 3.83), a similar prevalence for TBG ASOs (mean = 2.48) and SBG ASOs (mean = 2.50), and a limited weight of this type of funding for non-linear ASOs (mean = 1.80).

Table 6. Post-hoc analysis. Academic actors.

Agent	Cluster	N	Mean	Post-hoc test (Games-Howell)
				Cluster comparison	Mean difference	Sig.
Academic actors	2	49	1.59	2 vs. 3	−0.488†	0.090
				2 vs. 4	0.175	0.834
				2 vs. 5	0.425	0.262
	3	25	2.08	3 vs. 2	0.488†	0.090
				3 vs. 4	0.663*	0.042
				3 vs. 5	0.913*	0.021
	4	12	1.42	4 vs. 2	−0.175	0.834 0.042 0.685
				4 vs. 3	−0.663*
				4 vs. 5	0.250
	5	6	1.17	5 vs. 2	−0.425	0.262 0.021 0.685
				5 vs. 3	−0.913*
				5 vs. 4	−0.250

† p < 0.1; * p < 0.05.

Table 7. Post-hoc analysis. VC firms.

Agent	Cluster	N	Mean	Post-hoc test (Games-Howell)
				Cluster comparison	Mean difference	Sig.
VC firms	2	47	1.70	2 vs. 3	−0.465	0.561
				2 vs. 4	−0.798	0.462
				2 vs. 5	0.702**	0.002
	3	24	2.17	3 vs. 2	0.465	0.561
				3 vs. 4	−0.333	0.940
				3 vs. 5	1.167**	0.004
	4	12	2.50	4 vs. 2	0.798	0.462
				4 vs. 3	0.333	0.940
				4 vs. 5	1.500*	0.049
	5	5	1.00	5 vs. 2	−0.702**	0.002
				5 vs. 3	−1.167**	0.004
				5 vs. 4	−1.500*	0.049

* p < 0.05; ** p < 0.01.

Table 8. Post-hoc analysis. Other investors.

Agent	Cluster	N	Mean	Post-hoc test (Tukey)
				Cluster comparison	Mean difference	Sig.
Other investors	2	48	2.48	2 vs. 3	−0.021	1.000
				2 vs. 4	−1.354*	0.036
				2 vs. 5	0.679	0.780
	3	24	2.50	3 vs. 2	0.021	1.000
				3 vs. 4	−1.333*	0.042
				3 vs. 5	0.700	0.788
	4	12	3.83	4 vs. 2	1.354*	0.036
				4 vs. 3	1.333*	0.042
				4 vs. 5	2.033***	0.000
	5	5	1.80	5 vs. 2	−0.679	0.780
				5 vs. 3	−0.700	0.788
				5 vs. 4	−2.033***	0.000

† p < 0.1; * p < 0.05; *** p < 0.0001.

In summary, from the analyses carried out, we can confirm Hypothesis 2, since BG ASOs are strongly financially supported by governmental institutions and VC firms. However, surprisingly, it is also found that sporadic BG ASOs rely significantly on the financial resources provided by academic actors. Furthermore, Hypothesis 3 is also supported, since we have demonstrated the superior relevance of the governmental institutions, the VC firms, and other investors as providers of financial resources for Uppsala ASOs. Lastly, Hypothesis 4 is partially supported, since it has been corroborated that non-linear ASOs obtain a high degree of financial resources of governmental institutions, although the relevance of the academic actors has not been demonstrated.

6. Discussion and conclusions

Our research has been conducted to respond to two strongly related research questions that have hardly been addressed in the literature. On the one hand, we ascertain whether internationalised and domestic ASOs resort to different financial agents, thus answering the question of which agents providing financial resources are relevant for the internationalisation of ASOs. On the other hand, patterns of internationalisation of these firms are explored and we analyse whether there are differences between the agents financing the different patterns.

Regarding the first research question, our results indicate that there are indeed differences concerning the agents funding international and domestic ASOs. Significant differences are manifested in three agents: Governmental Institutions, VC firms, and other financial investors. Thus, the results confirm that these are the most relevant agents for the internationalisation of ASOs.

On the one hand, since internationalisation requires significant funding, ASOs need the support of specialised financial agents at both national and international levels (Bjørnåli and Aspelund 2012; Dams, Allende, and Murcia 2021; Jones, Kwansa, and Li 2020). As Sanyal, Akram, and Singh (2021) point out, external equity mainly supports internationalisation. Our results align with this asseveration and confirm that professional, expert, and skilled funding agents, rather than agents from the academic context, provide financial resources to internationalised ASOs. This result was expected because these agents, in addition to the provision of financial resources, act as facilitators of internationalisation, create reputation and reliability in these companies, and transfer the critical information and experience to operate in international markets. Networks of relationships with professional, skilled, and experienced investors result in increased internationalisation due to facilitated access to financial capital, reduced transaction and information acquisition costs, and to information benefits such as knowledge of foreign market opportunities, advice, and experiential learning. Finding new sources of finance becomes more critical as firms grow.

In contrast, if the agents that finance domestic ASOs are analysed, we find that they receive support mainly from governments, academic agents and, to a lesser extent, from VC firms. Governmental institutions provide financial resources to ASOs that will operate in domestic or international markets, especially in their early stages (Rodeiro-Pazos, Rodríguez-Gulías, and Fernández-López 2014; Wright et al. 2006). However, the main difference lies in the support of domestic ASOs from the university context, where they find financial sources at a lower cost due to their proximity and familiarity. These financial resources can be direct or indirect: for example, they may provide access to technological resources that in some way finance the operations of the ASOs or reduce the need for external funding.

Regarding the second research question, we have found different patterns of internationalisation in the ASOs, and differences between the agents that finance them. The results show the existence of four patterns of internationalisation with different relevance. The first two patterns correspond to different typologies existing in the BG literature. Specifically, we refer to TBGs and SBGs. Kuivalainen, Sundqvist, and Servais (2007) state that there are differences not only between BG and traditional internationalisation patterns but even BGs themselves can include firms whose internationalisation strategies differ in terms of their “born-globalness” (degree of internationalisation and markets served). Kuivalainen, Sundqvist, and Servais (2007) distinguished between different typologies of BGs among which they consider: SBGs, which refers to those firms that internationalise early but operate only in a small number of countries and the share of turnover is less than the cut-off rate of 25%; and TBGs, which refers to those firms operating on a global scale, with many target countries, and with a high percentage of their turnover from abroad. In the analysis carried out, 50 ASOs out of the 95 that have internationalised (52.6%) can be categorised as TBGs, and 27 ASOs as SBGs (28.4%), and hence 81% of the internationalised ASOs are BGs of different typology, thereby confirming the arguments of the academic entrepreneurship literature on the BG nature of these companies. The third pattern of internationalisation corresponds to an Uppsala pattern, with the sample consisting of 12 ASOs, representing only 12.63% of the internationalised ASOs, and hence the representativeness of this pattern is low. Finally, the fourth pattern is also poorly represented (6.3%) and includes the non-linear patterns, in which ASOs have been identified that follow a total de-internationalisation, and those that have partially de-internationalised. The former includes ASOs that have grown in international markets and subsequently abandoned their international activity, thereby concentrating all their sales in domestic markets. The latter, partially de-internationalised ASOs, have reduced their international presence without completely abandoning these markets.

In our second research question, we also examined the agents that finance the different patterns of internationalisation followed by these firms. An overall assessment of the results indicates the relevance of two agents for most of the patterns: governmental institutions and VC firms. The results also show that agents from the university context and other private investors are only relevant in certain patterns, such as SBGs and Uppsala, respectively.

Regarding governmental institutions, the results indicate that they are a relevant financing agent for the four internationalisation patterns followed by ASOs, and not only for the early stage as stated in the previous literature (Fernández-Alles, Camelo-Ordaz, and Franco-Leal 2015; Huynh 2016; Wright et al. 2006). For BGs and other early internationalisation patterns, such as the non-linear patterns, governments constitute key public funding sources because they are early-stage internationalising firms (Rasmussen and Sørheim 2012). Reluctance to invest in the early internationalisation of ASOs from private financial sources can largely be explained by their high level of uncertainty. There is a gap between funding availability and the need for resources to develop research into commercial applications in international markets. The recognition of a financing gap has led governments worldwide to provide public financing to early-stage technology ventures (Wright et al. 2006). Hence, in this research, public funding appears as a highly relevant source of financing, not only for BGs but also for any other pattern of early internationalisation of ASOs. Supporting these results, Suzuki and Okamuro (2017), regarding the effects of public support, found the relevance of financial support in the orientation of academic start-ups towards globalising their businesses. It is worth noting that governmental support is present even when ASOs exit foreign markets, either partially or entirely, and no differences were found in funding within partially or fully de-internationalised ASOs.

On the other hand, governmental funding fulfils other essential functions to favour the internationalisation of any internationalisation pattern, albeit early, in the consolidation phase (Uppsala), or the exit phase (non-linear). Backing with public funds, financial aid, or subsidies provides credibility and confidence: these are essential elements for all companies that have decided to enter international markets (Angulo-Ruiz, Pergelova, and Wei 2018; Hossinger, Chen, and Werner 2020; Martínez-Martínez et al. 2021). According to Sanyal, Akram, and Singh (2021, 89), “government support sends a positive signal to private financiers, not only because of the better solvency position, but also because of the positive signal sent to banks”. Therefore, either because ASOs are established in domestic markets and enjoy a good reputation (Uppsala), or because they have early-stage private financing problems or strong growth potential (BGs), or because they have failed to internationalise (non-linear pattern), governmental support is always a good financing alternative.

Regarding VC firms, which form the second-most relevant agent for the internationalisation of ASOs, the results show their importance in financing both BG and the Uppsala patterns, although the aforementioned arguments lead us to conclude that the reasons behind the decision to finance both types of ASOs differ.

On the one hand, VC firms have experience screening the future growth potential of start-ups in order to choose the most promising investments (Bock, Huber, and Jarchow 2018). The TBG internationalisation sub-pattern integrates the group of ASOs with the most significant technological capability and the enough potential to commercialise their knowledge in a committed manner in international markets, both in terms of the percentage of sales they can achieve (scale) and the global nature of their activity (scope). Their characteristics, such as international knowledge, international networks, and reputation, make them candidates for funding and other resources from VC firms. Our results, however, also indicate that VC firms are relevant for SBGs. In the sample of both early internationalisation patterns, the technological capabilities of TBGs and SBGs are similar and high (4.07 out of 5 for TBGs and 3.84 for SBGs); however, the degree of internationalisation and the scope they develop do differ. This may indicate that VC firms only finance the internationalisation of the ASOs based on their technological capacity and potential and not on the degree of commitment to internationalisation of the BGs. The strategy of BGs regarding their greater or lesser commitment to international markets may depend on other factors such as the degree of novelty of the technology or the clients’ needs. In this regard, Bock, Huber, and Jarchow (2018, 1382) note that ASOs “may have the potential to develop ground-breaking innovations on the one hand, while facing the challenge of finding applications for their innovations on the other hand”, which may require different commercialisation strategies in the markets. Therefore, technological capacity and potential, which lead VC firms to finance the early internationalisation of ASOs, does not mark the most appropriate strategy to follow (committed vs. timid) to counter technological uncertainty in international markets. In research that supports these findings, Woo (2019) confirms the relevance of foreign and domestic VC firms in financing and supporting technology-intensive start-ups with other resources. Park and LiPuma (2020) found that VC firms are positively related to the international intensity of the new venture.

Regarding the role of VC firms within the Uppsala pattern, the results indicate that because VC firms seek returns on their investments, it is logical that they support ASOs with credibility and a past track record in the markets. The background of these firms in domestic markets provides a guarantee for their international expansion, which is also supported by the network of built-in resources and relationships of ASOs in domestic markets (Fernhaber and McDougall-Covin 2009). On the other hand, VC firms seem to play a major role for ASOs that internationalise in a step-by-step manner because they are agents that provide not only financial resources, but also management skills, network relationships, knowledge, and reputation (Sanyal, Akram, and Singh 2021).

Other private funding sources from other investors appear to be agents relevant for ASOs that have followed an Uppsala pattern, that is, those that internationalise with previous experience in domestic markets and with a vast network of relationships and resources (Zucchella and Ramusino 2008). This funding source has been highlighted in the literature for its positive impact on internationalisation, although it has not been linked to a particular pattern (De Bonis, Ferri, and Rotondi 2015; Jones, Kwansa, and Li 2020; Sist 2014).

Finally, contrary to expectations, we found evidence of the role of academic agents as providers of financial resources for SBGs, although the percentage of such firms supported by academic agents is minimal (12%). Moreover, these agents do not yet seem to provide financial resources to de-internationalised ASOs. Regarding SBGs, these unexpected results could explain why many of these ASOs have not developed further in their internationalisation strategy and consequently, they have not been able to become BGs. If BGs rely on academic agents and maintain this relationship for resources, then their early international growth will not receive the funding and other resources required for solid international expansion. These findings are in line with the study of Styles and Genua (2008), who found that international ASOs that relied on their academic networks did not achieve geographical expansion or a high level of sales in international markets, due to the limited resources they can receive from these people. Concerning the second result, we can conclude that, contrary to our starting arguments, once ASOs distance themselves from the academic context they originate from, they lose their link with academic agents. Given that academic agents hardly ever provide substantial funding for internationalisation, de-internationalised ASOs will focus on strengthening their networks and acquiring international training in order to be able to count on skilled financial agents, experts, and professionals to provide support in internationalisation in the future and to be able to reconsider re-entering foreign markets in the future.

From this research, we draw the following overall conclusions. First, internationalised ASOs rely on financial agents different to those of non-internationalised ASOs, namely market agents skilled and experienced in funding. Second, the main pattern of internationalisation followed by these firms is that of BGs, in the TBG typology, followed by SBG. Third, different financial agents can support the different internationalisation patterns, although governmental institutions and VC firms remain the most relevant agents.

The results of this research provide several theoretical and practical contributions. From a theoretical point of view, this research contributes to the AE and IE literature, thereby providing a connection hitherto unheeded in the literature. On the one hand, theories on the internationalisation of ASOs according to different patterns can now be developed from our findings, due to the lack of previous studies that analyse the internationalisation patterns of ASOs. From an empirical point of view, in addition to validating that the majority of internationalising ASOs follow BG patterns as reported in the literature (Andersson and Berggren 2016; Bolzani et al. 2017; Styles and Genua 2008), we have also identified two other internationalisation patterns (Uppsala and non-linear). Moreover, within BG and non-linear patterns, two sub-patterns have been found, namely TBGs and SBGs, within the former, and total and partial, within the latter. We have also been able to derive the sources of funding in each of the patterns of internationalisation in ASOs where the literature is currently non-existent. Furthermore, our results contribute to the network theory of internationalisation by identifying the most relevant financial agents in each of the internationalisation patterns chosen by ASOs. Finally, this research contributes to the entrepreneurial finance literature by shedding light on how various financial agents contribute to the way in which ASOs internationalise.

The implications of this research provide essential information for academic entrepreneurs and institutions seeking an understanding of how ASOs can overcome their inherent financial obstacles for the development of strategies of international growth. In this respect, one interesting implication is related to the role played by university institutions. Both the academic origins and idiosyncratic characteristics of ASOs may suggest that they should rely on this agent for starting and consolidating their international position. However, our results have revealed that the financial support provided by the academic environment is only slightly relevant for those ASOs that have not yet decidedly committed to internationalisation, that is, the SBG ASOs. In contrast, in the light of the results obtained, academic entrepreneurs should put aside the traditional mimetic isomorphism of ASOs (Ensley and Hmieleski 2005) and strive to build strong ties with these agents outside the academic environment. To this end, university institutions and academic entrepreneurs could carry out suitable actions. On the one hand, university institutions may be expected to develop specific programs, meetings, or activities devoted to promoting and strengthening the relationships between ASOs, external investors, and governmental institutions, and to report promptly on the funding opportunities provided by such external agents. On the other hand, academic entrepreneurs should increase their efforts to attract professionals from the non-academic environment and to build more professionalised management teams. This could constitute a crucial action since prior research has pointed out that VC firms and other investors often refuse to provide ASOs with financial resources due to their misgivings regarding the commitment and capabilities of academic entrepreneurs (Sørheim et al. 2011; Wright et al. 2006).

Several future lines of research could be identified from the limitations presented by this paper. First, the contingent effects of the institutional context have yet to be analysed. Consequently, future lines of research should consider the contexts in which ASOs have internationalised, which undoubtedly also condition the financial alternatives available. As Mittoo and Zhang (2008) argue, the effect of internationalisation on financing decisions of firms is dependent on the host country for subsidiary investments. Second, certain relevant financial agents have not been individually analysed. Specifically, further research may address the role of informal financial sources, such as BG investors, angels, and bootstrapping, which has been largely ignored in the literature. Third, the domestic or international nature of each financial agent identified as relevant in each of the internationalisation patterns has not been considered, which constitutes an opportunity for further analysis. Finally, limitations concerning the methodology are also noted. On the one hand, cluster analysis is by nature a descriptive analytical technique, and, therefore, our results should be considered exploratory rather than definitive. Drawing on the results obtained, future studies may try to develop research models that allow certain causal relationships to be established. Related to this, the use of longitudinal data in further studies may enable these relationships to be explored in depth and may be especially relevant for placing the focus on those ASOs that have followed non-linear patterns of internationalisation, in order to analyse the financing alternatives available when ASOs decide to return to international markets through re-entry or re-internationalisation strategies.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work has been co-financed by the 2020-2023 ERDF Operational Programme and by the Department of Economy, Knowledge, Business and University of the Regional Government of Andalusia. Project reference: FEDER-UCA18-107689 titled “Analysis of the influence of the Andalusian, Spanish and European entrepreneurial ecosystems on the internationalisation process of Andalusian academic spin-offs, and its impact on innovation results”.This work has been financed by the INDESS Research Institute for Sustainable Development of the University of Cadiz for its translation.