Recognizing the need for a non-academic cofounder: competence (mis)perceptions in academic spin-off team formation

Abstract Despite growing interest in academic spin-off teams, we still know little about why some academic entrepreneurs—but not others—recognize the need to involve a non-academic cofounder with business expertise when taking their research to market. This study shows that entrepreneurs who either entirely lack business skills (the “lackers”) or possess substantial business expertise (the “advanced”) tend to recognize this need—seeking to complement or supplement their own capabilities, respectively. In contrast, those with limited business knowledge (the “little-knowers”) are not aware of the “unknown unknowns” and consequently do not recognize the need to bring in a non-academic cofounder. Taken together, these findings point to a Dunning-Kruger mechanism that influences how business human capital shapes the recognition of the need for a non-academic cofounder. We advance theory by highlighting a critical, previously overlooked step in the entrepreneurial team formation process: recognizing the need to add a new team member. Our findings show that this recognition is subjective and may not align with actual competence gaps, carrying important implications for entrepreneurial team formation, human capital theory, and homophily in academic spin-off teams.