Journal of Business Venturing Insights 19 (2023) e00395

Contents lists available at ScienceDirect

Journal of Business Venturing Insights

journal homepage: www.elsevier.com/locate/jbvi

Explaining the stage of product in pre-seed academic startup

ventures: An empirical analysis using monitoring data from a
German startup support program
Christoph E. Mueller
Startup, Transfer and Innovation Support (GTI), Project Management Jülich (PtJ), Forschungszentrum Jülich, Lützowstraße, 109, 10785, Berlin,
Germany

ARTICLE INFO ABSTRACT

Keywords: A central prerequisite for market entry and the subsequent economic performance of academic
New product development startup ventures is that the product on which the business model is based must be sufficiently
Product development stage well developed. The present research aims to provide answers in the quest to identify the ex-
R&D work planatory factors in the development stage of the product of academic spin-offs in the pre-seed
Startup
phase of their ventures. This is based on various factors that play a role in the innovation process
Pre-seed stage
and the development of new products – including characteristics of the project, characteristics of
EXIST program
the R&D work and business model development, previous freelance experience, networking, fi-
nancing, and technology field. The empirical analysis of data from academic startup ventures en-
rolled in a large German startup support program – using structural equation modeling – revealed
both direct and indirect statistically significant effects, showing that a large proportion of the se-
lected variables can be employed to explain the development stage of the product. The findings
indicate that the R&D work stage has a medium-sized effect, while business model development
stage, the degree of networking, project feasibility, and previous freelance experience connected
with the product all have small effects.

1. Introduction
It is widely believed that academic startups can positively affect a country's economy (e.g., Steenhuis and de Bruijn, 2010; Vincett,
2010; Guerrero et al., 2015). However, in most cases, this requires academic spin-off companies to be commercially successful and
competitive in the market. Several authors have already identified key success and inhibiting factors for academic startups – defined
as “new firms based on the transfer of core technology from an academic institution and whose founding members may (or may not)
include the academic inventor” (Nosella and Grimaldi, 2009, p. 681) – at micro-, meso- and macro-level (e.g., Hossinger et al., 2020;
Miranda et al., 2018). One central prerequisite for market entry and subsequent economic performance is that the product on which
the business model of an academic startup is based must be sufficiently well developed. The earlier the product is developed and a
minimum viable product is offered (e.g., Nguyen-Duc, 2020), the shorter the time to market (e.g., Heirman and Clarysse, 2007), and
the earlier startups can effectively commence commercial operation, which has been identified as a potential factor for predicting
their success or failure (e.g., Kalyanasundaram, 2018; Schoonhoven et al., 1990). From a strategic perspective on business models,
there have been calls for research to investigate the interplay between the various activities that underlie a business model and con-

E-mail address: chr.mueller@fz-juelich.de.

https://doi.org/10.1016/j.jbvi.2023.e00395
Received 20 December 2022; Received in revised form 11 April 2023; Accepted 14 April 2023
Available online 18 April 2023
2352-6734/© 2023 Elsevier Inc. All rights reserved.
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

tribute to its success (Lanzolla and Markides, 2021). It should therefore be of interest to know what factors influence the development
stage of innovative products in the pre-seed phase of academic startup ventures.
This study provides some answers in the quest to identify the explanatory factors in the development stage of academic startups'
innovative products (including goods and services) in the run-up to market entry. This is done by empirically testing a theoretically
developed model using data from the monitoring of the largest German startup support program, the ‘EXIST – Business Startup Grant’
(EGS).

2. Theoretical model and research hypotheses

In order to explore the reasons why the product development stage varies between academic startups, several explanatory factors
were tested for correlations. All of the tested relationships are depicted in Fig. 1. Literature from the fields of new product develop-
ment (e.g., Marzi et al., 2021; Cooper, 2019; Ernst, 2002) and innovation process management (e.g., Dziallas and Blind, 2019; Kahn,
2018) was consulted for conceptual foundation since it discusses key factors that may play an important role in the development of in-
novations and new products.
One area concerns the attributes of the product itself. Developing a commercially viable product is a complex issue, and the com-
plexity of the innovation itself is a driving factor in achieving high product performance (e.g., Fleuren et al., 2014; Findik and Beyhan,
2015). Usually, high complexity in a new product is accompanied by a lower degree of project feasibility, since it requires more R&D
work and more effort for planning. Against this backdrop, it is assumed that a higher degree of feasibility is associated with a more ad-
vanced R&D work stage (e.g., Nagesh and Thomas, 2015), simply because less R&D work is required. In addition, project feasibility
directly influences the development stage of the product, as projects that are easier to implement allow for higher development speed.
It has also long been known that R&D itself is a driver of innovation (e.g., Dziallas and Blind, 2019) and thus also drives the devel-
opment (stage) of new products. This is especially true for academic startup ventures (e.g., Wang, 2014), which are at the core of
transforming scientific innovations into marketable technologies and services. It is therefore assumed that a more developed R&D
work stage is associated with a more developed stage of the product. The stage of R&D work on a product is in turn influenced by the
resources available for R&D activities. These include employees, technology, tangible assets (e.g., machinery, tools and materials),
available time, and financial investments (e.g., Dziallas and Blind, 2019). The present study examines to what extent the qualification
of employees, in terms of the scientific-technical abilities of the founders of academic startups, affects the stage of R&D work (e.g.,
Medase, 2020). It is assumed that more sophisticated abilities are associated with a higher quality and faster development of required
R&D work, and hence exert a positive influence on the R&D work stage of the innovation process in academic startups.
Another potentially important factor influencing the product development stage is the business model development stage. Accord-
ing to Teece (2010, p. 20), a business model reflects “management's hypothesis about what customers want, how they want it and
what they will pay, and how an enterprise can organize to best meet customer needs, and get paid well for doing so”. The alignment
and design of the business model therefore interrelates with the development of new products (e.g., Trimi and Berbegal-Mirabent,
2012), as the product must fit the business model (e.g., Zott and Amit, 2007). It is therefore assumed that a more developed business
model goes hand in hand with a more advanced product stage. As an important reason for this mechanism, Hechavarría et al. (2017,
p. 8) note that “specific goals, codified in formal business plans, will facilitate progress towards (…) creating a new firm, because spe-
cific goals help organize actions [including product development processes].”
The business model development stage itself can in turn be influenced by many factors, including entrepreneurial skills (e.g.,
Białek-Jaworska et al., 2016). It has been shown that entrepreneurial skills depend crucially on previous work experience (e.g.,
Stuetzer et al., 2013). In the present study, previous work experience is operationalized by founders’ former freelance activities with
reference to the current project.1 When founders have already carried out economic activities related to their startup project in the
past, for which they were paid without having formally started a business yet, it is assumed that performing these activities increases
work experience – and thus entrepreneurial skills. Hence, it is presumed that founders with previous freelance work have a more ad-
vanced business model development stage than founders without that experience. Previous freelance activity is further presumed to
have a direct positive effect on the product development stage of early-phase startup ventures, because the experience and skills
gained from such previous work play an important role in the innovation process (e.g., Dziallas and Blind, 2019; Bender et al., 2000).
Another predictor for successful innovation processes, which are considered as a prerequisite for an advanced product develop-
ment stage, is the degree of networking of startups (e.g., Dziallas and Blind, 2019; Nunes et al., 2019) with external actors such as re-
search institutions, other startups and companies, (pilot) customers or investors. In the Open Innovation literature, networks are seen
as instrumental in obtaining necessary resources such as knowledge and financing, and in facilitating the introduction of novel prod-
ucts into the market (e.g., Spender et al., 2017; Soetanto and van Geenhuizen, 2015; Lundberg, 2013; West and Gallagher, 2006).
Through networking, young startups can harness the experience of other players with regard to the expectations of future customers
and investors, and acquire specific relevant knowledge for product development. It is therefore postulated that a higher degree of net-
working is associated with a more advanced stage of product development. However, in order for networking activities to be success-
ful and support the new product development process, startups need the appropriate networking capabilities (e.g., Chang, 2003). It is
assumed that more highly developed networking capabilities increase the overall degree to which a startup is networked.
Finally, the model shown in Fig. 1 includes two control variables that could also predict the product development stage. One is the
funding uptake, as previous research has shown that the R&D budget plays an important role in innovation and new product develop-

1 An example of such freelance activity is when software developers who want to start a business based on their developments have already consulted clients on related

software matters for payment before starting their business.

2
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

Fig. 1. Theoretical model and direct effects.

Note. n = 223. β = Standardized path coefficient. f2 = Effect size f-squared. Estimates from partial least squares algorithm. p-values determined by bootstrap resam-
pling (5000 replications). *** = p < .001, ** = p < .01, * = p < .05.

ment (e.g., Dziallas and Blind, 2019; De Fuentes et al., 2015). Secondly, the technology field of the startup is integrated in the model.
In this study, a distinction is made between IT and non-IT ventures, since a large proportion of the academic startups funded by the
EGS program – from which the data for the present study were acquired – are in the IT field.
Table 1 provides an overview of all direct effects hypotheses tested in this study.

3. Method
3.1. Setting and data collection
The data come from the baseline survey of program-accompanying monitoring of the EGS2 (Mueller, 2022). With 2824 startup
projects funded from 2007 to 2022, the EGS is the largest public funding program for prospective startups in Germany in terms of the
number of projects funded. So far, academic startups have been funded by the EGS to the tune of more than 304,000,000 €. The EGS
supports students, graduates and scientific staff for a duration of one year so that they can realize their startup idea and turn it into a
business plan. The startup projects supported are innovative technology-oriented or knowledge-based projects with significant inno-
vation potential and good economic prospects. The person-related grant finances living expenses of recipients up to 3000 € per person
per month (covered by a scholarship contract between grantees and their parent university) and provides a budget for material re-
sources (30,000 €) and coaching (5000 €) for the startup teams. The data were collected by the innovation agency ‘Project Manage-
ment Jülich’ (PtJ), which implements the program and its monitoring on behalf of the Federal Ministry for Economic Affairs and Cli-
mate Action (BMWK). Data were collected from December 2021 to February 2023 via an online survey. All startups whose project
started in this period were surveyed two weeks after the start of program funding. A total of 223 startup projects participated in the
survey, which corresponds to a response rate of 89%.

3.2. Measures and descriptive statistics

Various questionnaire items were used to measure the theoretical constructs described in the model, which were mostly answered
by the startup teams using rating scales. The wording of the individual items and the scales applied can be found in Appendix 1 in
Table A1.1, while descriptive statistics are presented in Table A1.2.

3.3. Data analysis

The data were analyzed using the partial least squares approach (PLS) to structural equation modeling (e.g., Hair et al., 2017) ap-
plying the software SmartPLS 4 (Ringle et al., 2022). Using PLS allows the relationships between the mainly non-directly observable
latent constructs and the questionnaire items used to operationalize those constructs (‘measurement models’) to be estimated, and the
strengths and significances of the relationships between the latent constructs (‘structural model’) to be verified simultaneously. Using
PLS thus permits the path model as a whole to be estimated, instead of several statistical models one at a time.

4. Results
Overall, an evaluation using accepted quality criteria showed that the model and its individual parts are of satisfactory quality (see
Appendix 2). Further, most of the hypothesized relationships show significant path coefficients, but the effect sizes – both in terms of
coefficients (β) and the effect size measure f-squared (f2) – vary in magnitude (Fig. 1). In the following, f2 is used for evaluating direct
effects based on the classification by Cohen (1988).

2 See for more information on the EGS: https://www.exist.de/EXIST/Navigation/EN/Start-upFunding/EXIST-Business-Start-up-Grant/exist-business-start-up-

grant.html (last visit, April 29, 2022).

3
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

Table 1
Overview of research hypotheses.

No. Hypothesis

H1 The higher the degree of project feasibility, the more advanced the R&D work stage.
H2 The higher the degree of project feasibility, the more advanced the product development stage.
H3 The more advanced the R&D work stage, the more advanced the product development stage.
H4 The more sophisticated the scientific-technical abilities of the founders, the more advanced the R&D work stage.
H5 The more advanced the business model development stage, the more advanced the product development stage.
H6 If founders have previous freelance work experience, the business model development stage is more advanced.
H7 If founders have previous freelance work experience, the product development stage is more advanced.
H8 The higher the degree of networking of startup teams, the more advanced the product development stage.
H9 The more developed the networking capabilities of the founders, the more advanced the degree of networking.
Note. No hypotheses are shown for funding uptake and being an IT startup, as these factors were only included in the model as control variables.

First of all, both scientific-technical and network abilities have medium effects on their respective dependent constructs. There-
fore, H4 and H9 are supported. The postulated effect of project feasibility on the R&D work stage (H1) is also supported, although this
effect is not even half as strong as the ones previously mentioned. When it comes to the effects on product development stage, several
significant effects of varying strength can be observed, all of which point in the expected direction. The strongest effect – mediocre in
terms of Cohen's (1988) classification – is exerted by the R&D work stage. The more advanced the R&D work, the more advanced the
product development stage (H3). A weak effect is exerted by the business model development stage. The more advanced the business
model development stage, the more advanced the product development stage becomes (H5). Moreover, there are three additional
weak effects. A higher degree of networking is associated with a more advanced stage of the product (H8), the product is more ad-
vanced if the project is considered easier to implement (H2), and startups with previous freelance activity in connection with the pro-
ject report products at a more advanced stage (H7).
Finally, H6 was not supported by the data at hand. Hence, whether a founding team has already had any freelance business rela-
tionships or not does not matter for the business model development stage. Moreover, the product development stage does not signifi-
cantly differ between IT and non-IT ventures or between ventures with and without funding.
Based on the model specification, some indirect (i.e. mediated) effects on the product development stage can also be estimated
(Table 2). First, there is the indirect effect of scientific-technical abilities on the product development stage, which is mediated by the
R&D work stage. This indirect effect is statistically significant but small. The indirect effects of networking capabilities (mediated by
the degree of networking) and project feasibility (mediated by the R&D work stage) are even smaller, but also significant. Finally, the
indirect effect of previous freelance activity does not have a significant indirect effect.

5. Discussion
Most of the hypotheses are supported by the analysis, meaning that statistically significant correlations were observed. However,
three effects were not of detectable size and they were not significant either. This may be due to the fact that these effects do not actu-
ally exist. Yet there is the possibility that such effects cannot be observed in the present study under the given conditions, but may be
observed in other studies. This also applies the other way around: effects that are significant in the present study do not necessarily
have to be so in future studies. In order to make more robust statements, findings need to be replicated. Bearing this in mind, it is im-
portant to discuss reasons that could explain the observed effect patterns.
On the basis of the effect size measure f2, the significant effects can be divided into two groups: one with factors that have moder-
ate effects, and another with constructs that have a small effect. The first group includes the R&D work stage, scientific-technical abil-
ities and network capabilities. The latter two do not directly affect the product development stage, but the R&D work stage and the
level of networking. Yet the relevance of these capabilities for the model is reflected in the significant indirect effects they exert on the
product development stage, which is consistent with literature suggesting that founders’ abilities are critical factors in product devel-
opment (e.g., Tripathi et al., 2019).
With regard to the moderate effect of the R&D work stage, the explanation of why this variable has the strongest effect on the
product development stage may be twofold. First, R&D is a central element in the literature on innovation process management and
new product development (e.g., Cooper, 2019; Dziallas and Blind, 2019; McGrath and Romeri, 1994), which may explain the impor-

Table 2
Indirect effects.

Path β Sig.

Indirect effects
Scientific-technical abilities→ Product development stage .16 ***
Networking capabilities → Product development stage .08 **
Freelance employment → Product development stage −.01 n.s.
Project feasibility → Product development stage .07 *
Note. n = 223. β = Standardized path coefficient. Estimates from partial least squares algorithm. Significance determined by bootstrap resampling (5000 replications).
*** = p < .001, ** = p < .01, * = p < .05.

4
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

tance of the R&D advancement for the product development stage. Second, the dominant role of the R&D work stage is probably also
due to the peculiarities of the EGS program, to which all of the startups surveyed were granted access. This program focusses particu-
larly on startups with innovative ideas and products (e.g., Mueller, 2022; Ayoub et al., 2017), so R&D work may play an outsized role
in the startups of the study sample.
When it comes to the small effects in terms of f2, the question arises as to why these effects are only small. With regard to the de-
gree of networking, it seems reasonable to assume that this is primarily due to the fact that the benefits resulting from increased net-
working tend to have an indirect rather than a direct impact on the product development stage. As previously outlined, through net-
working, startups can obtain various types of resources, both tangible and intangible (e.g., Wang and Schøtt, 2022; Spender et al.,
2017; Soetanto and van Geenhuizen, 2015; Lundberg, 2013). Undoubtedly, these resources are useful for advancing product develop-
ment. However, in contrast to other factors such as R&D work, which typically has a primary focus on the product being developed
(e.g., Cooper, 2019; McGrath and Romeri, 1994), the resources gained from networking mainly serve to enable and support the
founders during the product development process, rather than directly affecting it.
A different interpretation seems appropriate when considering the effect of the business model development stage. As previously
mentioned, the product and the business model are closely linked and must be compatible (e.g., Trimi and Berbegal-Mirabent, 2012;
Zott and Amit, 2007), which explains the observed influence of the business model development stage on the product development
stage. However, a business model encompasses more than just product-development-related aspects and includes other factors such
as costs, revenues, customers, resources and networks (e.g., Mullins and Komisar, 2013; Johnson, 2010; Osterwalder et al., 2005).
Therefore, it is not surprising that the effect of the business model development stage is somewhat weaker, since founders may have
rated the business model development stage as advanced based on criteria that were independent of product development.
Another factor with a small effect on the product development stage is the feasibility of the project. One possible explanation for
this only small impact is the presumed high agility of startup ventures (e.g., Ghezzi and Cavallo, 2020), which enables them to adapt
quickly to changing conditions. Thus, startups may be able to pivot their product development processes when faced with unexpected
complexities. Knowing about this could limit the effect of project feasibility, as assessed by founders, on the product development
stage.
In contrast to the mediocre effect suggested by the path coefficient, f2 only indicates a small effect of prior freelance experience on
the product development stage. A factor that may account for that effect in this study is the EGS program. Specifically, a large propor-
tion of the startups funded by the EGS do not operate in the IT sector, which may explain the small influence. One could argue that
prior freelance experience is more valuable to the development of IT products than it is to non-IT products, because IT products typi-
cally do not require much hardware. Indeed, if the model coefficient of previous freelance experience is estimated solely on the basis
of data from IT startups, it is considerably larger. Hence, if the EGS program only supported IT startups, a stronger effect of previous
freelance experience would be expected. Moreover, despite the fact that previous freelance activities can be considered as work expe-
rience which is relevant in new product development practices (e.g., Marion et al., 2012), previous freelance experience may not
translate to the product development stage of a startup due to differences in context and scope. For example, freelance work is typi-
cally done in a specific context, such as a particular client, industry or project. In contrast, developing a product for a startup requires
a broad understanding of the market, competition and user needs. Freelance work may also have focused on a particular aspect of a
product, such as development or design, rather than the entire development process. In contrast, product development for a startup
involves a wider range of activities, from ideation and prototyping to testing and launch.
While on the topic, it is interesting to consider why freelance experience affects product development but not the business model
development stage. One explanation is that freelance work typically focusses more on technical aspects. Additionally, previous free-
lance experience may not be a reliable indicator for measuring entrepreneurial skills, which could account for the findings that con-
tradict previous research suggesting the importance of such skills in business planning and model development (e.g., Białek-Jaworska
et al., 2016).
Finally, the results do not show any significant effects had by the two control variables. Yet with regard to the affiliation to the IT
sector, the results suggest that IT projects may tend to be less advanced with their product development at the start of EGS funding.
This could be due to the fact that the funding period in the EGS is more likely to be sufficient for IT projects than for other high-tech
projects, as the product can be developed more quickly. Furthermore, the mechanisms of the whole model could differ between IT
and non-IT startups, given the body of literature highlighting the particularities of IT startups as compared with other types of startup
(e.g., Melegati et al., 2019; Giardino et al., 2015). Indeed, a multi-group analysis showed significant coefficient differences between
IT and non-IT startups, particularly in terms of the influence of previous freelance activity (a stronger effect in the IT startup group)
and project feasibility (a weaker effect in the IT startup group). This suggests that the model's mechanisms differ between technology
fields. In contrast, another group comparison did not find any significant differences in coefficients between models with startups
with and without funding, or a detectable effect of funding in the model with startups with funding only. These results contradict pre-
vious findings from the literature (e.g., Dziallas and Blind, 2019; Hossinger et al., 2020). A likely explanation for this is that EGS-
funded startup ventures are usually not material-intensive and do not require a large budget to purchase equipment.
The study has also some limitations that need to be addressed. Firstly, the sample size of 223 startups surveyed is not exceptionally
large, which somewhat reduces its statistical power. Secondly, many of the measurements are based on self-assessments by the star-
tups, which may introduce errors such as recall bias (e.g., Hill and Betz, 2005) or social desirability (e.g., King and Bruner, 2000). In
particular, the self-assessments may have been over- or underrated due to a gratitude bias (Scheirer, 1978) resulting from the fact that
founders were surveyed by an agency from which they were receiving a start-up grant on behalf of the funding federal ministry. Un-
fortunately, because secondary data were used for this study, it is not possible to verify retrospectively whether such bias exists, let
alone quantify its extent. A reasonable approach to this would be to survey rejected startup projects and compare their assessments

5
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

Fig. 2. Implications for future research, academic startups, and program planners/funders.

with those which were granted funding. Thirdly, the generalizability of the results may be limited since only startups funded in a spe-
cific support program were surveyed. This circumstance could lead to problems with validity, for example because it cannot be ruled
out that the observed relationships between the constructs are rooted in the funding agency's decision logic and thus somewhat artifi-
cial in nature. Last but not least, the empirically estimated relationships between the theoretically specified constructs are of a corre-
lational nature that does not allow robust causal inference. Among other things, this is because it is not clear how many relevant fac-
tors were left out of the study. The factors that determine the performance of academic startups – including the development of their
products – are manifold (e.g., Hossinger et al., 2020) and were thus not all able to be the subject of empirical examination in a single
study.

6. Summary and conclusion

The present research aimed to explain the development stage of the product of academic spin-offs in the pre-seed phase of their
ventures based on various factors that play a role in the innovation process and the development of new products – including charac-
teristics of the project, characteristics of the R&D work and business model development, freelance experience, networking, financ-
ing, and technology field. The analysis of data from 223 academic startups in Germany using structural equation modeling revealed
numerous direct and also some indirect statistically significant effects. The model showed that the R&D work stage had by far the
strongest effects.
This research contributes to the relevant literature by empirically investigating an issue that has not been studied sufficiently be-
fore. By linking characteristics of startup projects and founding teams and the activities of founders to the development stage of star-
tups’ products, the study provides novel insights into the mechanisms that promote advanced product development at an early stage
of nascent startup ventures, which is assumed to be a relevant prerequisite for subsequent economic success. Therefore, it contributes
to the general understanding of the innovation and product development process in pre-seed stage startups.
Having said that, there are needs for future research that emerge from the present analysis. Moreover, the findings can also be
used to draw some implications for decision-makers and prospective startups themselves. Fig. 2 therefore concludes the article by
showing specific implications for researchers, (prospective) startups, and program planners and funders.

6
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

Credit author statement

Christoph E. Mueller: Conceptualization; Methodology; Validation; Formal analysis; Investigation; Data curation; Writing – orig-
inal draft; Writing – review & editing; Visualization; Project administration.

Funding
This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Declaration of competing interest

The authors declare the following financial interests/personal relationships which may be considered as potential competing in-
terests:Christoph E. Mueller reports a relationship with Project Management Jülich that includes: employment.

Acknowledgements
The research presented in this article is based on data collected by PtJ in its monitoring of the startup support program ‘EXIST –
Business Startup Grant’. This program is funded by the BMWK and co-funded by the European Social Fund (ESF). The author wishes
to thank the BMWK for authorizing the use of the data for publication. The author also thanks an anonymous reviewer and the editor
for their constructive and very helpful feedback. Finally, the author wishes to thank Iris Eckardt and Leonhard Gebhardt for valuable
comments on an earlier draft of the manuscript.

Appendix 1. Measures and descriptive statistics

To measure scientific-technical abilities, self-assessed skills in this area were used on the one hand, and the number of (former) sci-
entific staff members in the team on the other. The R&D work stage was operationalized with the current development status of R&D
and the perceived quality of R&D. Networking capabilities were measured by having the founders assess their specific networking
skills. The degree of networking was operationalized by the assessed intensity of networking with three groups of actors (see Table
A1.1). The remaining two latent constructs, business model development stage and product development stage, were similarly opera-
tionalized by self-assessments of the respective development stage and the respective quality. Finally, project feasibility was mea-
sured by one item only, namely the perceived feasibility of the project.
In addition to the latent – that is, not directly observable – constructs, three objective and directly observable variables were in-
cluded in the model. These are three dichotomous variables that can be described by means of yes/no expressions, namely freelance
activity with reference to the current project, categorization of the project in the IT sector, and the commencement of financing.
In order to prevent listwise case deletion and hence a reduction of statistical power, missing values were imputed by a procedure
known as ‘multiple imputation by chained equations’ (Royston, 2004) using the Stata module ice (Royston and White, 2007).3 Gener-
ally, the number of imputed values in the single items was very low (see Table A1.2).

Appendix 2. Model evaluation

In almost all cases, the conventionally accepted quality criteria for reflective measurement models are met (e.g., Hair et al., 2017;
Henseler et al., 2016), as can be seen in Table A1.2. Almost all indicators of multi-item constructs have factor loadings greater than
0.7. One indicator of the construct ‘degree of networking’, which is only slightly below this value, is an exception to this. Moreover,
the composite reliability exceeds the frequently cited threshold value of 0.7 in all possible cases and the average variance extracted
per construct is clearly above 50% in all cases. Taken together, convergent validity is therefore assumed. Finally, inspecting the het-
erotrait-monotrait ratio of correlations showed no indication of a violation of discriminant validity, and computing variance inflation
factors did not indicate any multicollinearity.
The overall model fit is acceptable with a standardized root mean square residual of 0.08. Above this, the endogenous constructs
in the model can mostly be explained to a fair extent. The variance explanation for ‘R&D work stage’ is 20%, for ‘degree of network-
ing’ 17%, and for ‘product development stage’ as much as 38%. Yet none of the variance in the answers given by those asked about
the construct ‘business model development stage’ can be explained by the sole specified predictor ‘freelance activity’.

Table A1.1
Wording and scale of items.

Construct/Item Wording Scale

Scientific-technical
abilities
Scientific-technical skills
Overall, how would you rate the following competencies/skills in your startup team? 1 (very low) to 7 (very high)
- > scientific-technical skills
(continued on next page)

3 Analyses were also replicated with a dataset where values were not imputed. The results did not differ – or differed only minimally – with regard to path coefficients.

7
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

Table A1.1 (continued)

Construct/Item Wording Scale

Wie bewerten Sie insgesamt die folgenden Kompetenzen/Fähigkeiten in Ihrem Gründungsteam? 1 (sehr niedrig) bis 7 (sehr hoch)
- > wissenschaftlich-technische Kompetenz
Number of (former) research Funding category of founding team members funded by EXIST. 0 to 3
associates
R&D work stage
Development of R&D work How do you assess the stage of development of your technological/innovation R&D work 1 (very early stage) to 7 (very
at this time? advanced stage)
Wie beurteilen Sie das Entwicklungsstadium Ihrer technologischen/innovationsbezogenen 1 (sehr frühes Stadium) bis 7 (sehr weit
Forschungs- und Entwicklungsarbeiten (F&E) zum jetzigen Zeitpunkt? fortgeschrittenes Stadium)
Quality of R&D work How do you assess the quality of your technological/innovation R&D work at this time? 1 (very low) to 7 (very high)
Wie beurteilen Sie die Qualität Ihrer technologischen/innovationsbezogenen Forschungs- und 1 (sehr niedrig) bis 7 (sehr hoch)
Entwicklungsarbeiten (F&E) zum jetzigen Zeitpunkt?
Degree of networking
Networking with other To what extent are you networked with the following actors/groups at this point in time? 1 (very low degree) to 7 (very high
startups - > other startups degree)
In welchem Umfang sind Sie mit den folgenden Akteuren/Gruppen zum jetzigen Zeitpunkt 1 (sehr geringer Grad) bis 7 (sehr hoher
vernetzt? - > andere Startups Grad)
Networking with well To what extent are you networked with the following actors/groups at this point in time? 1 (very low degree) to 7 (very high
established companies - > well established companies degree)
In welchem Umfang sind Sie mit den folgenden Akteuren/Gruppen zum jetzigen Zeitpunkt 1 (sehr geringer Grad) bis 7 (sehr hoher
vernetzt? - > etablierte Unternehmen Grad)
Networking with potential To what extent are you networked with the following actors/groups at this point in time? 1 (very low degree) to 7 (very high
investors - > potential investors degree)
In welchem Umfang sind Sie mit den folgenden Akteuren/Gruppen zum jetzigen Zeitpunkt 1 (sehr geringer Grad) bis 7 (sehr hoher
vernetzt? - > potenzielle Investoren/Geldgeber Grad)
Business model development stage
Development of business Overall, how would you rate the stage of development of your planning work in the 1 (very early stage) to 7 (very
model following areas at this time? - > business model advanced stage)
Wie bewerten Sie insgesamt das Entwicklungsstadium Ihrer Planungsarbeiten in den 1 (sehr frühes Stadium) bis 7 (sehr weit
nachfolgenden Bereichen zum jetzigen Zeitpunkt? - > Geschäftsmodell fortgeschrittenes Stadium)
Quality of business model How would you rate the quality of your planning work to date in the following areas at 1 (very low) to 7 (very high)
this point in time? - > business model
Wie beurteilen Sie die Qualität Ihrer bisherigen Planungsarbeiten in den nachfolgenden Bereichen 1 (sehr niedrig) bis 7 (sehr hoch)
zum jetzigen Zeitpunkt? - > Geschäftsmodell
Product development stage
Development of product How do you assess the stage of development of your product or service at this point in 1 (very early stage) to 7 (very
time? advanced stage)
Wie beurteilen Sie das Entwicklungsstadium Ihres Produktes bzw. Ihres Dienstleistungsangebots 1 (sehr frühes Stadium) bis 7 (sehr weit
zum jetzigen Zeitpunkt? fortgeschrittenes Stadium)
Quality of product How do you assess the quality of your product or service at this point in time? 1 (very low) to 7 (very high)
Wie beurteilen Sie die Qualität Ihres Produktes bzw. Ihres Dienstleistungsangebots zum jetzigen 1 (sehr niedrig) bis 7 (sehr hoch)
Zeitpunkt?
Networking capabilities
Networking skills Overall, how would you rate the following competencies/skills in your startup team? 1 (very low) to 7 (very high)
- > Network skills
Wie bewerten Sie insgesamt die folgenden Kompetenzen/Fähigkeiten in Ihrem Gründungsteam? 1 (sehr niedrig) bis 7 (sehr hoch)
- > Netzwerkkompetenz
Project feasibility
Perceived feasibility of Overall, how would you rate the feasibility of your business idea? 1 (very difficult to implement) to 7
project (very easy to implement)
Wie beurteilen Sie insgesamt die Umsetzbarkeit bzw. Machbarkeit Ihrer Geschäftsidee? 1 (sehr schwierig umzusetzen) bis 7
(sehr einfach umzusetzen)
Binary variables
Freelance activity Did you already have a business activity related to the funded project on a freelance basis 1 (yes) vs. 0 (no)
before the start of the funding by the ‘EXIST – Business Startup Grant’?
Gab es vor dem Beginn der Förderung durch das EXIST-Gründerstipendium auf freiberuflicher 1 (ja) vs. 0 (nein)
Basis bereits eine Geschäftstätigkeit mit Bezug zum geförderten Vorhaben?
Technology field (IT) Extracted from the internal database of the innovation agency that implements the ‘EXIST 1 (IT) vs. 0 (non-IT)
– Business Startup Grant’
Funding Please provide information on the funding raised to date (excluding EXIST funding). 1 (there is funding) vs. 0 (there is no
funding)
Bitte machen Sie Angaben zu den bisher eingeworbenen Mitteln (ohne EXIST-Mittel). 1 (es gibt eine Finanzierung) vs. 0 (es
gibt keine Finanzierung)
Note. Original item wording in German in italics.

8
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

Table A1.2
Descriptives, factor loadings, validity criteria and imputation info

Construct/Item mean SD Loading Sig. rho AVE %iv

Scientific-technical abilities .81 .68

Scientific-technical skills 6.11 0.90 .85 *** 0.00
Number of (former) research associates 0.45 0.87 .79 *** 0.00
R&D work stage .85 .74
Development of R&D work 4.33 1.34 .89 *** 1.79
Quality of R&D work 5.23 1.05 .83 *** 4.93
Degree of networking .77 .53
Networking with other startups 4.58 1.50 .57 *** 0.00
Networking with well established companies 4.16 1.42 .76 *** 0.00
Networking with potential investors 4.90 1.30 .83 *** 0.00
Business model stage .90 .82
Development of business model 4.64 1.23 .92 *** 0.45
Quality of business model 5.15 0.98 .88 *** 1.80
Product development stage .82 .70
Development of product 3.55 1.41 .86 *** 0.90
Quality of product 4.97 1.18 .81 *** 12.56
Networking capabilities
Networking skills 5.52 1.15 – – – – 0.00
Project feasibility
Perceived feasibility of project 3.84 1.06 – – – – 0.45
Binary variables % yes % no
Freelance activity 13.45 86.55 0.00
Technology field (IT) 41.26 58.74 0.00
Funding 39.46 60.54 0.00
Note. n = 223. Loading = Factor loading. rho = Composite reliability. AVE = Average variance extracted. %iv = Proportion of imputed values. Significance deter-
mined by bootstrap resampling (5000 replications). *** = p < .001, ** = p < .01, * = p < .05.

References
Ayoub, M.R., Gottschalk, S., Müller, B., 2017. Impact of public seed-funding on academic spinoffs. J. Technol. Tran. 42, 1100–1124.
Bender, K.W., Cedeno, J.E., Cirone, J.F., Klaus, K.P., Leahey, L.C., Menyhert, T.D., 2000. Process innovation - case studies of critical success factors. Eng. Manag. J. 12,
17–24.
Białek-Jaworska, A., Gabryelczyk, R., Pugaczewicz, A., 2016. Determinants of business model maturity. Studia i Materiały 20, 8–23.
Chang, Y.-C., 2003. Benefits of co-operation on innovative performance: evidence from integrated circuits and biotechnology firms in the UK and Taiwan. R D Manag.
33, 425–437.
Cohen, J., 1988. Statistical Power Analysis for the Behavioral Sciences. Lawrence Erlbaum Associates, Hillsdale.
Cooper, R.G., 2019. The drivers of success in new-product development. Ind. Market. Manag. 76, 36–47.
De Fuentes, C., Dutrenit, G., Santiago, F., Gras, N., 2015. Determinants of innovation and productivity in the service sector in Mexico. Emerg. Mark. Finance Trade 51,
578–592.
Dziallas, M., Blind, K., 2019. Innovation indicators throughout the innovation process: an extensive literature analysis. Technovation 80–81, 3–29.
Ernst, H., 2002. Success factors of new product development: a review of the empirical literature. Int. J. Manag. Rev. 4, 1–40.
Findik, D., Beyhan, B., 2015. The impact of external collaborations on firm innovation performance: evidence from Turkey. Procedia Soc. Behav. Sci. 195, 1425–1434.
Fleuren, M., Paulussen, T., Dommelen, P., van Burren, S., 2014. Towards a measurement instrument for determinants of innovations. Int. J. Qual. Health Care 26,
501–510.
Ghezzi, A., Cavallo, A., 2020. Agile business model innovation in digital entrepreneurship: lean startup approaches. J. Bus. Res. 519–537.
Giardino, C., Bajwa, S.S., Wang, X., Abrahamsson, P., 2015. Key challenges in early-stage software startups. In: Lassenius, C., Dingsøyr, T., Paasivaara, M. (Eds.), Agile
Processes in Software Engineering and Extreme Programming. Springer, Cham.
Guerrero, M., Cunningham, J.A., Urbano, D., 2015. Economic impact of entrepreneurial universities’ activities: an exploratory study of the United Kingdom. Res. Pol.
44, 748–764.
Hair, J.F., Hult, G.T.M., Ringle, C.M., Sarstedt, M., 2017. A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Sage, Thousand Oaks.
Hechavarría, D.M., Tian, L.R., Reynolds, P., 2017. To Plan or Not to Plan: the Effects of Business Planning on Start-Up Speed and Outcomes. https://
www.researchgate.net/publication/320685359_To_Plan_or_Not_To_Plan_The_Effects_of_Business_Planning_on_Start-up_Speed_and_Outcomes.
Heirman, A., Clarysse, B., 2007. Which tangible and intangible assets matter for innovation speed in start-ups? J. Prod. Innovat. Manag. 24, 303–315.
Henseler, J., Hubona, G., Ray, P.A., 2016. Using PLS path modeling in new technology research: updated guidelines. Ind. Manag. Data Syst. 116, 2–20.
Hill, L.G., Betz, D.L., 2005. Revisiting the retrospective pretest. Am. J. Eval. 26, 501–517.
Hossinger, S.M., Chen, X., Werner, A., 2020. Drivers, barriers and success factors of academic spin-offs: a systematic literature review. Manag. Rev. Q. 70, 97–134.
Johnson, M.W., 2010. Seizing the White Space: Business Model Innovation for Growth and Renewal. Harvard Business Press, Boston.
Kahn, K.B., 2018. Understanding innovation. Bus. Horiz. 61, 453–460.
Kalyanasundaram, G., 2018. Why do startups fail? A case study based empirical analysis in Bangalore. Asian J. Innov. Pol. 7, 79–102.
King, M.F., Bruner, G.C., 2000. Social desirability bias: a neglected aspect of validity testing. Psychol. Market. 17, 79–103.
Lanzolla, G., Markides, C., 2021. A business model view of strategy. J. Manag. Stud. 58, 540–553.
Lundberg, H., 2013. Triple Helix in practice: the key role of boundary spanners. Eur. J. Innovat. Manag. 16, 211–226.
Marion, T.J., Friar, J.H., Simpson, T.W., 2012. New product development practices and early-stage firms: two in-depth case studies. J. Prod. Innovat. Manag. 29,
639–654.
Marzi, G., Ciampi, F., Dalli, D., Dabic, M., 2021. New product development during the last ten years: the ongoing debate and future avenues. IEEE Trans. Eng. Manag.
68, 330–344.
McGrath, M.E., Romeri, M.N., 1994. The R&D effectiveness index: a metric for product development performance. J. Prod. Innovat. Manag. 11, 213–220.
Medase, S.K., 2020. Employees’ heterogeneous qualifications, internal R&D, formal Training and innovation performance. Int. J. Innovat. Manag. 25, 1–57.

9
C.E. Mueller Journal of Business Venturing Insights 19 (2023) e00395

Melegati, J., Goldman, A., Kon, F., Wang, X., 2019. A model of requirements engineering in software startups. Inf. Software Technol. 109, 92–107.
Miranda, F.J., Chamorro, A., Rubio, S., 2018. Re-thinking university spin-off: a critical literature review and a research agenda. J. Technol. Tran. 43, 1007–1038.
Mueller, C.E., 2022. Wirkungsorientiertes Monitoring für die Startup-Förderprogramme „EXIST-Gründerstipendium“ und „EXIST-Forschungstransfer. Zeitschrift für
Evaluation 21, 77–90.
Mullins, J., Komisar, R., 2013. Getting to Plan B: Breaking through to a Better Business Model. Harvard Business School Press, Boston.
Nagesh, D.S., Thomas, S., 2015. Success factors of public funded R&D projects. Curr. Sci. 108, 357–363.
Nguyen-Duc, A., 2020. An analytical framework for planning minimum viable products. In: Nguyen-Duc, A., Münch, J., Prikladnicki, R., Wang, X., Abrahamsson, P.
(Eds.), Fundamentals of Software Startups. Springer, Cham, pp. 81–95.
Nosella, A., Grimaldi, R., 2009. University-level mechanisms supporting the creation of new companies: an analysis of Italian academic spinoffs. Technol. Anal. Strat.
Manag. 21, 679–698.
Nunes, S., Lopes, R., Fuller-Love, N., 2019. Networking, innovation, and firms’ performance: Portugal as illustration. J. Knowl. Econ. 10, 899–920.
Osterwalder, A., Pigneur, Y., Tucci, C.L., 2005. Clarifying business models: origins, present, and future of the concept. Commun. Assoc. Inf. Syst. 16. https://doi.org/
10.17705/1CAIS.01601.
Ringle, C.M., Wende, S., Becker, J.-M., 2022. SmartPLS 4. Boenningstedt: SmartPLS. https://www.smartpls.com.
Royston, P., 2004. Multiple imputation of missing values. STATA J. 4, 227–241.
Royston, P., White, I.R., 2007. Multiple imputation by chained equations (mice): implementation in Stata. J. Stat. Software 45, 1–20.
Scheirer, M.A., 1978. Program participants’ positive perceptions: psychological conflict of interest in social program evaluation. Eval. Q. 2, 53–70.
Schoonhoven, C.B., Eisenhardt, K.M., Lyman, K., 1990. Speeding products to market: waiting time to first product introduction in new firms. Adm. Sci. Q. 35, 177–207.
Soetanto, D., van Geenhuizen, M., 2015. Getting the right balance: university networks’ influence on spin-offs’ attraction of funding for innovation. Technovation
36–37, 26–38.
Spender, J.-C., Corvello, V., Grimaldi, M., Tippa, P., 2017. Startups and open innovation: a review of the literature. Eur. J. Innovat. Manag. 20, 4–30.
Steenhuis, H.-J., de Bruijn, E.J., 2010. University start-ups and the regional economy. In: Picmet 2010 Technology Management for Global Economic Growth. IEEE.
2010. https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=5603418.
Stuetzer, M., Obschonka, M., Davidsson, P., Schmitt-Rodermund, E., 2013. Where do entrepreneurial skills come from? Appl. Econ. Lett. 20, 1183–1186.
Teece, D.J., 2010. Business models, business strategy and innovation. Long. Range Plan. 43, 172–194.
Trimi, S., Berbegal-Mirabent, J., 2012. Business model innovation in entrepreneurship. Int. Enterpren. Manag. J. 8, 449–465.
Tripathi, N., Oivo, M., Liukkunen, K., Markkula, J., 2019. Startup ecosystem effect on minimum viable product development in software startups. Inf. Software Technol.
114, 77–91.
Vincett, P.S., 2010. The economic impacts of academic spinoff companies, and their implications for public policy. Res. Pol. 39, 736–747.
Wang, J., 2014. R&D activities in start-up firms: what can we learn from founding resources? Technol. Anal. Strat. Manag. 26, 517–529.
Wang, D., Schøtt, T., 2022. Coupling between financing and innovation in a startup: embedded in networks with investors and researchers. Int. Enterpren. Manag. J. 18,
327–347.
West, J., Gallagher, S., 2006. Patterns of open innovation in open source software. In: Chesbrough, H., Vanhaverbeke, W., West, J. (Eds.), Open Innovation: Researching
a New Paradigm. Oxford University Press, Oxford, pp. 82–106.
Zott, C., Amit, R., 2007. The fit between product market strategy and business model: implications for firm performance. Strat. Manag. J. 29, 1–26.

10