Venture labour in the knowledge economy: Professional work in venture capital-backed companies
Start-up firms are dependent on a variety of resources including venture capital investment, intellectual property right expertise, leadership and governance skills, and commercial human resources. In addition, and less often emphasizes, start-up forms entering more mature phases are relying on what is here called venture labour, that is, skilled professional workers that embody an entrepreneurial spirit and an willingness to carry the risks inherent in any life science venture but that still hold no legal rights to the economic value extracted from the venture in the case of a successful introduction on the stock market or the acquisition of the firm. The proposed study will examine how venture labourers in life science start-up companies regard their working life situation and how they cope with the risk and uncertainty that is part of their career choice. The present study will combine interview data collection methods, participative observations, and archival data to examine how venture labour is organized today and how this category of professional workers enact their identities and role in the innovation-led and knowledge intensive economy. Participating companies and individuals will be recruited in collaboration with e.g., the science parks in Gothenburg and Lund.
Final report
Project purpose and its development over the project period
The defined purpose of the project was to examine how co-workers in venture capital-backed companies perceive their work situation and to what extent they believe they need to take action to counteract the market risk they are exposed to when being employed by thinly-capitalized companies, which needs to raise new funding on a regular basis. The research project was justified on basis of previous research on entrepreneurs and their interests, incentives, and prospect of making an economic return on venturing activities. The project was also informed by research on venture capital investment. However, there is a shortage of research on employees working in venture capital-backed companies, so-called “venture workers,” salaried workers who hold no or very limited equity in the company they work for. The research question was also determined by the sharp growth in newly registered companies and the general expansion of an entrepreneurial infrastructure in Sweden, with incubators and venture capital companies associated with Swedish universities. This entrepreneurial infrastructure is supportive of e.g., the commercialization of biomedical basic research.
For practical reasons, (e.g., current project being terminated during the spring of 2016, and the budgeting process of the home department), the empirical was not initiated until the fall of 2016. The project has been organized according to the stipulated plan, with the notable that the originally named co-workers docent Rebecka Arman was replaced by docent Maria Norbäck.
Short overview of project activities
During the period September to June 2018, 20 interviews with co-workers in start-up companies in the biomedicine field were conducted. To access to these companies, three incubators and venture capital investors were contacted: Sahlgrenska Science Park, GU Ventures (a venture capital firm associated with University of Gothenburg), and the venture capital company Nxt2b, head-quartered in Uppsala. The study included 11 companies and interview with start-up company co-workers were conducted in situ, at their workplaces in Gothenburg and Uppsala. Interviews were recorded and transcribed verbatim by a professional writing bureau. The interview transcriptions were coded as advocated by relevant methodology literature and in line with previous studies. The study was based on the proposition that much innovative research are located to smaller companies, and preferably start-up companies as they are more flexible and has shorter communication and command routes than larger companies. Furthermore, co-workers in start-up companies are stipulated to be better incentivized to produce innovative output as the future of the corporate entity is dependent on this innovative performance. A sizeable scholarly literature in the field of entrepreneurship studies, venture capital investment, and studies of institutional changes in the market and corporate systems have been of key importance for the project work. Nxt2b.
The three most significant research findings and contributions to the international research front.
The project has contributed to the scholarly literature on venture work and business venturing accordingly:
• Work in thinly-capitalized companies implies a market risk as life science companies are forced to raise new funds on a regular basis. The increased risk of default, following a liquidity crisis, is generally perceived to manageable by the venture workers as they have a confidence in their competence and experience being highly valued on the market. In addition, the economic and social welfare provision offered by the Swedish state is supportive of risk-taking and venturing. For instance, venture workers expressed no concerns regarding their capacity to provide good schooling for their children and such services are part of the Swedish welfare state model. The entrepreneurial culture and climate that Sweden tend to take pride in is contingent on institutional conditions as the market pricing of venture work do not include a risk premium. This means that also thinly-capitalized life science companies can recruit qualified co-workers, also from overseas in certain cases.
• Venture workers in star-up life science companies expressed a preference for this type of companies that work to commercialize basic research work. Academic milieus were deemed to provide more limited career opportunities, and was more geared towards academic career making. Individuals with experience from larger companies, in e.g., the pharmaceutical sector expressed their concern regarding how scientific interests were gradually more subordinated to commercial and managerial concerns. Furthermore, large-scale organizations were regarded to be overtly hierarchical and difficult to monitor and manage, as opposed to start-up companies that were “agile” in their structure and flexible in modifying practices when needed. Individuals with work experience form academic institutions were also skeptical regarding what they regarded as a one-sided focus on academic publishing and fund-raising. In their view, this governance model and performance monitoring regime is at risk to push academic research into increasingly specialized and practically irrelevant research. In contrast, start-up life science companies were treated as milieus wherein practical problems derived from a clinical setting were solved on basis of research know-how and collaborative efforts.
• A perceived shortage of venture capital, and not the least qualified venture capital investors that both provide finance capital and act within the corporate governance function as member of the board of directors, e.g., by providing commercial know-how, reduced the output from life science start-up companies. Interviewees regarded the smaller funds invested by state-controlled agencies such as Vinnova as being vital for the industry but still called for more international and professional venture capital investors who could serve in this role. State-controlled agencies need to consider political agendas and objectives, which the interviewees regarded as a limited on the state-sponsored life science venturing model. The shortage of venture capital was regarded as a bottleneck for industry growth.
New research questions being generated by the project
The research project has run in tandem with a Vinova funded project, studying so-called “innovative ways of organizing,” and more specifically the development of an incubator at the multinational pharmaceutical company AstraZeneca’s Mölndal site. New research questions of relevance for the life science industry, but also more general questions regarding the network-based innovation model being stipulated and implemented by AstraZeneca. In the former case, the research question is whether the innovation model structured around a basic research finding that is accompanied by a start-up company that raise funds to commercialize the original result is the optimal model in terms of innovation output and commercialization? In the period 2017-2019, there has been a variety of project with the intention to increase collaborative activities between larger corporations (e.g., Volvo, ABB) and smaller innovative companies initiated.
The project reported has been accompanied by a number of Vinnova-funded projects during the 2016-2018 period: ”Open Innovation för Svensk Life Science” (D.nr: 2014-00631, Date of decision: 2014-03-28), followed by ”Öppna innovationsarenor inom life science” (D.Nr: 2016-04634, Date of decision, 2016-10-28). A new Vinnova-funded project, ”Öppen innovation mellan stora bolag och scale-ups” (D.Nr. 2019-0303, Date of decision, 2019-10-08) was initiated in January 2020 and run for two-and-a half years. In the most recent project, research findings from the project reported will be recognized, for instance, the co-worker (venture worker) perspective on collaborative activities between either thinly capitalized companies, or between large scale corporations and start-up life science companies.
Outside of the more narrow life science sector, a FORTE-funded project (”Indie-utvecklares betydelse för kreativitet och arbetsförhållanden inom dataspelbranschen” (D.nr: 2017-00834, Date of decision: 2017-09-27), currently examines how the creative fringe of the expanding video game development industry is dependent on small start-up companies or individual developers that produce innovative solutions to video game design challenges. The project is planned to be terminated by the end of 2021. Research findings indicate several similarities with the life science sector as indie developers are motivated by the prospect of maintaining full control over the development work, at the same time as they are aware of the financial challenges they are facing. In many cases, indie developers are operating on basis of thin budgets and uncertain business prospects, but as that is a form of “life-style career choice,” most indie developers express that they can tolerate such uncertainties. Finally, the reported project and its focus on the commercialization of basic research has contributed to the development of the project “Robotic surgery, visualization and the work of experts: Implications for the organization of health care practices and patient benefits” (D.nr: P19-0121, Date of decision, 2019-05-08), funded by Handelsbankens Forskningsstiftelser. In general, the project reported sought to combine theories of innovation (and in the life science in particular), theories of labour market changes, and theories about venture capital investment to provide a more comprehensive overview and understanding of how venture workers assess, value, and cope with market uncertainty in their domain of expertise. This integrated perspective should be of interest for a variety of scholarly fields of research and for policy markets that actively supports and endorses an innovation-based economic system.
International aspects of the project, including material generated, etc.
The project has been organized within the existing research team, as stipulated in the application, but the research question and its results are of international relevance. The so-called Lisbon agenda emphasizes the innovation-led economy as the pathway to economic growth, but the results to date have been disappointing in comparison the US economy. The US relies on the world’s largest venture capital investment industry, but despite this benefit, the American economy suffers from a shrinking number of newly registered firms and slower growth in entrepreneurial companies, recently published scholarly literature indicates. Research results from the project reported has been presented at international conferences and published in international journals and as a research monograph with an international publisher.
The sharing of project results in the research community
Maria Norbäck, studying professional work, e.g., freelance journalism, in the new “gig economy” model, has made several presentations of empirical data generated in the research project. Such presentations include the following seminars: (1) presenter at ”The professional gig-economy, ” Unionens Göteborgsavdelning, 25 November, 2019; (2) presenter at the Prins Bertil seminar on ” “Boundaryless Work” School of Business, Economics, and Law, University of Gothenburg, 6 November, 2019; (3) presentater at “The gig and the platform economy” at Arbetsvetenskapliga Forskningscentret, School of Business, Economics, and Law, University of Gothenburg, 20 March, 2019,; and (4) presentater at “MeetingPoint HR: Dig and Gig,” at Center for Global Human Resource Management, School of Business, Economics, and Law, University of Gothenburg. Aexander Styhre have published the textbook The Market (Studentlitterautr) s being part of the project activities, since 2018 being part of the curriculum of the Graduate School Master program Management, School of Business, Economics, and Law, University of Gothenburg. Empirical illustrations derived from the project reported have been included in lecturing material at numerous occasions.
The defined purpose of the project was to examine how co-workers in venture capital-backed companies perceive their work situation and to what extent they believe they need to take action to counteract the market risk they are exposed to when being employed by thinly-capitalized companies, which needs to raise new funding on a regular basis. The research project was justified on basis of previous research on entrepreneurs and their interests, incentives, and prospect of making an economic return on venturing activities. The project was also informed by research on venture capital investment. However, there is a shortage of research on employees working in venture capital-backed companies, so-called “venture workers,” salaried workers who hold no or very limited equity in the company they work for. The research question was also determined by the sharp growth in newly registered companies and the general expansion of an entrepreneurial infrastructure in Sweden, with incubators and venture capital companies associated with Swedish universities. This entrepreneurial infrastructure is supportive of e.g., the commercialization of biomedical basic research.
For practical reasons, (e.g., current project being terminated during the spring of 2016, and the budgeting process of the home department), the empirical was not initiated until the fall of 2016. The project has been organized according to the stipulated plan, with the notable that the originally named co-workers docent Rebecka Arman was replaced by docent Maria Norbäck.
Short overview of project activities
During the period September to June 2018, 20 interviews with co-workers in start-up companies in the biomedicine field were conducted. To access to these companies, three incubators and venture capital investors were contacted: Sahlgrenska Science Park, GU Ventures (a venture capital firm associated with University of Gothenburg), and the venture capital company Nxt2b, head-quartered in Uppsala. The study included 11 companies and interview with start-up company co-workers were conducted in situ, at their workplaces in Gothenburg and Uppsala. Interviews were recorded and transcribed verbatim by a professional writing bureau. The interview transcriptions were coded as advocated by relevant methodology literature and in line with previous studies. The study was based on the proposition that much innovative research are located to smaller companies, and preferably start-up companies as they are more flexible and has shorter communication and command routes than larger companies. Furthermore, co-workers in start-up companies are stipulated to be better incentivized to produce innovative output as the future of the corporate entity is dependent on this innovative performance. A sizeable scholarly literature in the field of entrepreneurship studies, venture capital investment, and studies of institutional changes in the market and corporate systems have been of key importance for the project work. Nxt2b.
The three most significant research findings and contributions to the international research front.
The project has contributed to the scholarly literature on venture work and business venturing accordingly:
• Work in thinly-capitalized companies implies a market risk as life science companies are forced to raise new funds on a regular basis. The increased risk of default, following a liquidity crisis, is generally perceived to manageable by the venture workers as they have a confidence in their competence and experience being highly valued on the market. In addition, the economic and social welfare provision offered by the Swedish state is supportive of risk-taking and venturing. For instance, venture workers expressed no concerns regarding their capacity to provide good schooling for their children and such services are part of the Swedish welfare state model. The entrepreneurial culture and climate that Sweden tend to take pride in is contingent on institutional conditions as the market pricing of venture work do not include a risk premium. This means that also thinly-capitalized life science companies can recruit qualified co-workers, also from overseas in certain cases.
• Venture workers in star-up life science companies expressed a preference for this type of companies that work to commercialize basic research work. Academic milieus were deemed to provide more limited career opportunities, and was more geared towards academic career making. Individuals with experience from larger companies, in e.g., the pharmaceutical sector expressed their concern regarding how scientific interests were gradually more subordinated to commercial and managerial concerns. Furthermore, large-scale organizations were regarded to be overtly hierarchical and difficult to monitor and manage, as opposed to start-up companies that were “agile” in their structure and flexible in modifying practices when needed. Individuals with work experience form academic institutions were also skeptical regarding what they regarded as a one-sided focus on academic publishing and fund-raising. In their view, this governance model and performance monitoring regime is at risk to push academic research into increasingly specialized and practically irrelevant research. In contrast, start-up life science companies were treated as milieus wherein practical problems derived from a clinical setting were solved on basis of research know-how and collaborative efforts.
• A perceived shortage of venture capital, and not the least qualified venture capital investors that both provide finance capital and act within the corporate governance function as member of the board of directors, e.g., by providing commercial know-how, reduced the output from life science start-up companies. Interviewees regarded the smaller funds invested by state-controlled agencies such as Vinnova as being vital for the industry but still called for more international and professional venture capital investors who could serve in this role. State-controlled agencies need to consider political agendas and objectives, which the interviewees regarded as a limited on the state-sponsored life science venturing model. The shortage of venture capital was regarded as a bottleneck for industry growth.
New research questions being generated by the project
The research project has run in tandem with a Vinova funded project, studying so-called “innovative ways of organizing,” and more specifically the development of an incubator at the multinational pharmaceutical company AstraZeneca’s Mölndal site. New research questions of relevance for the life science industry, but also more general questions regarding the network-based innovation model being stipulated and implemented by AstraZeneca. In the former case, the research question is whether the innovation model structured around a basic research finding that is accompanied by a start-up company that raise funds to commercialize the original result is the optimal model in terms of innovation output and commercialization? In the period 2017-2019, there has been a variety of project with the intention to increase collaborative activities between larger corporations (e.g., Volvo, ABB) and smaller innovative companies initiated.
The project reported has been accompanied by a number of Vinnova-funded projects during the 2016-2018 period: ”Open Innovation för Svensk Life Science” (D.nr: 2014-00631, Date of decision: 2014-03-28), followed by ”Öppna innovationsarenor inom life science” (D.Nr: 2016-04634, Date of decision, 2016-10-28). A new Vinnova-funded project, ”Öppen innovation mellan stora bolag och scale-ups” (D.Nr. 2019-0303, Date of decision, 2019-10-08) was initiated in January 2020 and run for two-and-a half years. In the most recent project, research findings from the project reported will be recognized, for instance, the co-worker (venture worker) perspective on collaborative activities between either thinly capitalized companies, or between large scale corporations and start-up life science companies.
Outside of the more narrow life science sector, a FORTE-funded project (”Indie-utvecklares betydelse för kreativitet och arbetsförhållanden inom dataspelbranschen” (D.nr: 2017-00834, Date of decision: 2017-09-27), currently examines how the creative fringe of the expanding video game development industry is dependent on small start-up companies or individual developers that produce innovative solutions to video game design challenges. The project is planned to be terminated by the end of 2021. Research findings indicate several similarities with the life science sector as indie developers are motivated by the prospect of maintaining full control over the development work, at the same time as they are aware of the financial challenges they are facing. In many cases, indie developers are operating on basis of thin budgets and uncertain business prospects, but as that is a form of “life-style career choice,” most indie developers express that they can tolerate such uncertainties. Finally, the reported project and its focus on the commercialization of basic research has contributed to the development of the project “Robotic surgery, visualization and the work of experts: Implications for the organization of health care practices and patient benefits” (D.nr: P19-0121, Date of decision, 2019-05-08), funded by Handelsbankens Forskningsstiftelser. In general, the project reported sought to combine theories of innovation (and in the life science in particular), theories of labour market changes, and theories about venture capital investment to provide a more comprehensive overview and understanding of how venture workers assess, value, and cope with market uncertainty in their domain of expertise. This integrated perspective should be of interest for a variety of scholarly fields of research and for policy markets that actively supports and endorses an innovation-based economic system.
International aspects of the project, including material generated, etc.
The project has been organized within the existing research team, as stipulated in the application, but the research question and its results are of international relevance. The so-called Lisbon agenda emphasizes the innovation-led economy as the pathway to economic growth, but the results to date have been disappointing in comparison the US economy. The US relies on the world’s largest venture capital investment industry, but despite this benefit, the American economy suffers from a shrinking number of newly registered firms and slower growth in entrepreneurial companies, recently published scholarly literature indicates. Research results from the project reported has been presented at international conferences and published in international journals and as a research monograph with an international publisher.
The sharing of project results in the research community
Maria Norbäck, studying professional work, e.g., freelance journalism, in the new “gig economy” model, has made several presentations of empirical data generated in the research project. Such presentations include the following seminars: (1) presenter at ”The professional gig-economy, ” Unionens Göteborgsavdelning, 25 November, 2019; (2) presenter at the Prins Bertil seminar on ” “Boundaryless Work” School of Business, Economics, and Law, University of Gothenburg, 6 November, 2019; (3) presentater at “The gig and the platform economy” at Arbetsvetenskapliga Forskningscentret, School of Business, Economics, and Law, University of Gothenburg, 20 March, 2019,; and (4) presentater at “MeetingPoint HR: Dig and Gig,” at Center for Global Human Resource Management, School of Business, Economics, and Law, University of Gothenburg. Aexander Styhre have published the textbook The Market (Studentlitterautr) s being part of the project activities, since 2018 being part of the curriculum of the Graduate School Master program Management, School of Business, Economics, and Law, University of Gothenburg. Empirical illustrations derived from the project reported have been included in lecturing material at numerous occasions.