2015 Proceedings of PICMET '15: Management of the Technology Age
Innovation and Startup Pathways in a University Scope
Jose M. Cárdenas, Ignacio Rondón
Universidad Católica San Pablo, Industrial Engineering Dept., Barrio de San Lázaro, Arequipa, Peru
Abstract--Entrepreneurship and startup companies are
related terms, in the sense that one brings support to the other.
The characteristics of a successful startup could be visible in the
long term, but how about the way to develop an entrepreneurial
person? This study performed a survey within a Peruvian
university in order to explain the innovative mindset of the
students and even their position about the real needs for
performing innovative and disruptive companies (or initiatives).
This survey was formerly applied to overall students but the
results revealed several inconsistencies. So a new survey was
enhanced and applied to senior year students. Results showed
that, in the big picture, the students know the innovative and
startup pathways and they are able to provide new insights in
this theoretical approach.
I. INTRODUCTION
Once an entrepreneur says: “… based on my opinion… a
traditional firm is like an animal in a zoo, but a startup is like
an animal in the jungle”. So most of the decisions (within a
startup) are underpinned by a managerial instinct, there are no
models or hierarchical processes in order to determine which
decisions are better than others. We start from this premise in
order to study how the junior and senior students from our
university perceive the act of performing innovative
processes.
At the start, the scope of this research was to try to
discover how a venture capital for small business works, but
formerly we needed to understand the mindset of small
business or startup in its idealization stage (or any former
stage). This way, a survey was prepared in the aim of
investigating how much knowledge about innovation and
technological innovation is managed by small entrepreneurs.
In this case our small entrepreneurs were our students, mainly
form managerial and engineering areas.
As a premise, some events about startup initiatives were
developed into the university, also a department of ecological
research was created as a result of these events. And, some
funding resources appeared from venture capital, angel
capital, seed capital and other forms of funding. But only few
entrepreneurs were benefited; maybe not more than five or
six, and none of it was well succeeded.
So it is clear that we had some material for understanding
the historical innovation mindset but we had no material for
understanding the reason because the startups were not
succeeded and what kind of client (from the university scope)
is aimed by venture capital firms. The last has two
connotations, a) we are trying to understand clients for small
venture capital firms (obviously, by admitting the existence
of venture capital firms acting like angel capital or seed
capitalists) and b) we are trying to study the bundle of
capabilities from the students to create and manage startup
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firms, including some aspects about the risk approach and
expectative. So, academic spin-off models were reviewed in
the aim of creating a link between those two perspectives.
Afterwards, results from the survey were presented in
tables. From the matter, some results were a surprise, in the
sense that it was confirmed that senior students had
participated in startups and also some of them had reached
success.
Like a global conclusion, we had a simple objective and
our results are presented here, but more in the aim of sharing
results of a starting research. In advance, we expected to
enhance this research, mainly by using a better survey to
reinforce the questions contained.
II. VENTURE CAPITAL AND INFORMAL
INVESTMENTS
Startups need to get capital from many sources in order to
develop their activities. These fund sources are comprised in
a bundle of categories depending on their involvement, their
risk management, and their style of management among other
typologies. For instance, Sørheim and Landstrom [7] do their
categorization in accordance to the informal investors’
investment activity and competence. They typologized
informal investors into four different categories: (i) Lotto
investors; (ii) Traders; (iii) Analytical Investors; and (iv)
Business Angels.
Within the literature, there are other forms of informal
capital (business angels or investor angels), most of them
oriented to finance risk capital to be applied to technologic
initiatives [2]. Anyway, these forms of investment were better
developed in the USA like venture capital firms, these firms
were being developed from the Second World War in this
country [3]. So, venture capital firms are very developed in
the USA and other countries in the world. Our case should be
underpinned by the reality of venture capital firms in Latin
America, fundamentally in Peru. Martins [4] postulates that
only few countries in Latin America had enhanced this kind
of firm and in the other countries the investor firms had less
than five years of experience. The market is still incipient and
support for these firms is recently included into the political
plans in every government [6].
In Peru, there are informal investments supporting some
startups but is not possible to identify a venture capital in
order to perform a research supporting some hypothesis on
the basis of real data. For this reason, it was necessary to
investigate particularities of innovation pathways from the
matter, that is, by asking entrepreneurs about how they
construct their IPO. Aiming to understand how the work of a
venture capital should be in Peru. It responds to the
 2015 Proceedings of PICMET '15: Management of the Technology Age

Fig. 1 The global process of commercialization by spin-off

connotation a) (considered in the Introduction of this paper)

about how a small or starting venture capital works and what
it needs to be conformed.
The part b) is linked to the second part of the theoretical
background.
III. SPIN-OFF AND STARTUP INITIATIVES
For this research it was considered that senior students
could help to understand how the informal investments
perform innovations and how the educational initiatives can
be inserted into the innovation model. This last point could
explain an academic spin-off model.
De Clayn & Braet [1] define spin-off as: “… a new legal
entity (company) founded by one or more individuals
seconded or transferred (sometimes part-time) from a parent
company to exploit some kind of knowledge gained in the
parent company and transferred to the new company.”
In the specific case of academic spin-off there are four
stages [5] emerged as relevant in explaining the
transformation of academic research results into economic
value:
Stage 1: to generate business ideas from research;
Stage 2: to finalize new venture projects out of ideas;
Stage 3: to launch spin-off firms from projects;
Stage 4: to strengthen the creation of economic value by spin-
off firms.
The research should be enhanced in order to generate
business ideas, like in the following model [5] Figure 1.
This model received a critique indicating that this is not a
closed tube but it is possible to assimilate or enter within the
process in any of the four stages [1]. Within the academics
spin-off arena, this fact is verifiable because the results of
research can evolve to any of the stages. By following this
logic, it is possible to assume the same thing for the case of a
non-academic arena.
IV. METHODOLOGICAL APPROACH
The aim of the research was to describe the client profile
for a possible small venture capital. Because of this, a survey
was applied to senior students from a Peruvian university.
The university has around 7000 students. In a former
moment, this survey was applied to overall students but this
process revealed several inconsistencies, mainly linked to the
fact that junior students are not familiarized with the startup
topic. Because of that, an enhanced survey was sent by
targeting all the senior students from every course. This is
around 2500 students. These questions are included in the
Appendix 1. We obtained 99 validated responses. Some
questions were pointed in the aim of validating the answers.
The survey was partitioned in four parts:
1. The objective of this part is to ask about the innovation in
our environment, Peru, and our institution.
2. This part is oriented to verify if there are sufficient
students interested in applying their ideas to innovate. The
scope is to establish the former market share.
3. These questions look to estimate how the students
understand (or not) what is an informal investment and
specifically venture capital firms.
4. It was oriented to estimate the knowledge about venture
capital and startup firms.
Results of the survey were examined and generated some
conclusions from the matter, but also generated the need for
enhancing the questions.
V. RESULTS
The survey is consigned in Appendix 1. Here are the main
results.

Part 1:
TABLE 1: QUESTIONS OF THE PART 1 (1/2)
Question Yes Not
Do you think that your university pushes innovation? 38% 62%
Do you think public policy (government) pushes innovation? 75% 15%

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 2015 Proceedings of PICMET '15: Management of the Technology Age

TABLE 2: QUESTIONS OF THE PART 1 (2/2)

There is no There is much Innovation is a There is little Innovation is
Question
innovation innovation continuum innovation “in- demand”
What do you think about
12% 1% 1% 55% 31%
innovation in Peru?

Part 2:
TABLE 3: AVAILABILITY TO INNOVATE AND DISTRIBUTION BY COURSE
Question Yes Not
Are you able to be an entrepreneur? 88% 12%
Distribution by course
Business Administration 96% 4%
Computer Science 78% 22%
Accountability 88% 12%
Laws 93% 7%
Electronic engineering 100% 0%
Industrial Engineering 82% 18%
Psychology 100% 0%

There was a good response about the intentionality to be
an entrepreneur. Because the part 1 prepares the student for
this question it is possible to assume that the answer has
sincerity. However, we have not presented data about the
number of respondents by course, because it was not the
intention of this survey to examine this point.
Surprisingly (for us at least) there were some students that
had participated in a startup and failed to achieve success,
less than those who achieved success. This point is important
because the fact that possible clients for a small venture
capital exist.
The last table (table 7) shows the estimate for an amount
of capital required to be financed by a possible venture
capital.
The sum was established on the basis of the budget of a
small firm that suggested some quantities that the firm was
able to support and put as risk capital. Not surprisingly, most
of the students needed more than 2500 US dollars for their
investments. We assume that while the entrepreneur mostly
knows about the business, their capital requirement grows
proportionally with their environment knowledge.

Part 3:
TABLE 4: DO YOU KNOW INFORMAL INVESTMENTS?
Question No Yes Not
response
Are you familiarized with the term “Venture Capital”? 3% 56% 41%
Will you go with a Venture Capital or an Informal Investment? 39% 20% 40%
In the case of a firm that finance ideas and projects about innovation and
3% 10% 87%
entrepreneurship, will you consider showing them your ideas?

TABLE 5: WHY NOT TO SHOW YOUR IDEAS TO A VC?

Fear to give an
Lack of trust in a Fear of
Question Fear of failure idea because Other reasons
VC rejection
VCs copy ideas
Why do you not show your
45% 23% 3% 26% 3%
ideas?

Part 4:
TABLE 6: DO YOU KNOW INFORMAL INVESTMENTS?
Question No Yes Not
response
Are you familiarized with the term “startup”? 3% 56% 41%
Are you familiarized with the term “spin-off”? 40% 13% 47%
Did you participate in any startup? 40% 47% 12%
Has your startup ever failed? 76% 16% 8%
If you have capital, or could acquire it, will you be an entrepreneur? 0% 99% 1%

TABLE 7: WHY NOT TO SHOW YOUR IDEAS TO A VC?

Question 0-500$ 500-1000$ 1000-2500$ More than 2500$
How much capital is needed for a startup? 7% 15% 35% 43%

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 2015 Proceedings of PICMET '15: Management of the Technology Age
VI. CONCLUSIONS
This research about innovation with a very small initial
budget has recently begun, in this sense, it has originality and
novelty in the sense that we are trying to reach the senior
students’ opinion in the aim of searching for gaps in the
academic spin-off theory.
This way, survey research was performed and conducted
with senior students in a private university from a medium-
sized city in Peru. In this country, creative activities are
recognized and have certain fame. Nevertheless, there is a
lack of informal investments because the risk aversion is
proportional to the innovative attitude.
We conducted the survey in the aim of getting a profile of
a small venture capital firm, but in the way, an academic
spin-off opportunity emerged because of the students’
attitude. So maybe this research could be better understood as
a perspective for determining the profile of senior students
performing academic spin-offs.
We considered that it is important to report results from
the matter, even when it is research in construction.
The conclusion of this research is that within a university
there are some students that pertain to the circle of innovators
APPENDIX 1: THE SURVEY QUESTIONS
Part 1
1. Do you think that your university impulse innovation?
2. Do you think the public policy (government) impulse
innovation?
3. How do you think about innovation on Peru?
4. What we can do to impulse innovation?
5. Do you know what an entrepreneurship means?
Part 2
6. Are you able to be an entrepreneur?
7. If you have capital (funds). Do you start an
entrepreneurship?
8. Where do you think that you can get funds for
investment?
9. Do you think Peruvians are entrepreneurs?
10. Do you think the actual policy impulse entrepreneurships?
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or entrepreneurs that are able to provide tools for enhancing a
spin-off model, and also to respond to the question of how to
perform innovation in disruptive manners.
REFERENCES
[1] De Cleyn, S., Braet, J., “The evolution of Spin-off Ventures an
Integrated Model”, International Journal Of Innovation and
Technology Management, vol. 7 i. 1, pp 53-70, 2010
[2] Erickson, T., Sørheim, R., ‘Technology angels’ and other informal
investors. Technovation, vol. 25, pp. 489-496, 2005
[3] Gompers, P., Lerner, J., “The Venture capital Revolution”, Journal of
Economic Perspectives, Vol 15, No, 2, Spring, pp- 145-168, 2001
[4] Martins, I., Capital Riesgo Informal Y La Financiación De Nuevos
Emprendimientos: Un Llamado Al Debate Académico En
Latinoamérica (Informal Venture Capital Funding New Entrepreneurial
Activities: A Call to the Academic Forum in Latin America). Available
http://ssrn.com/abstract=2325469, 2013
[5] Ndonzuau, F. N., Pirnay, F., & Surlemont, B. A stage model of
academic spin-off creation.Technovation, vol. 22(5), p.281-289, 2002
[6] Romani, G., Atienza, M., Amoros, J.E., The development of angel
investors on Latin American countries, the case of Chile. Venture
capital, (ahead-of-print), pp. 1-19, 2013.
[7] Sørheim, R., Landstrom, H., “Informal investors—a categorization,
with policy implications”. Entrepreneurship & Regional Development,
vol. 13, pp. 351–370, 2001.
Part 3
11. Are you familiarized with the term “Venture Capital”?
12. Are you familiarized with any “informal investment” (e.g,
Angel Investor)?
13. Will you go with a Venture Capital or an Informal
Investment?
14. Why do you not do?
15. In the case of a firm that finance ideas and projects about
innovation and entrepreneurship. Will you consider
showing them your ideas?
16. Why not?
Part 4
17. Are you familiarized with the term “startup”?
18. Are you familiarized with the term “spin-off”?
19. Did you participate of any startup?
20. How many?
21. Sometime, your startup was failed?
22. Please talk about the motivations because your startup
failed?