OECD reveals how grants and support shape academic start-ups’ growth, highlighting both early benefits and long-term financing challenges.
The OECD’s 2026 working paper “How do non-equity instruments shape the financing paths of academic start-ups?” offers one of the most comprehensive analyses to date of how science-driven ventures navigate their early financing journeys across OECD countries. Drawing on a dataset of over 81’000 start-ups founded between 1990 and 2022, the report sheds new light on the unique strengths and systemic vulnerabilities of academic entrepreneurs.
Before diving into the report’s findings, let us unpack what academic entrepreneurship actually means. In its report, the OECD broadly defines it as “the process by which scientific knowledge created in universities or public research organisations is transferred into commercial applications through entrepreneurial ventures”. In addition, specific features underpin the difference between academic and non-academic entrepreneurs: the former possess a deep academic imprint, specialised knowledge, and proximity to frontier scientific discoveries. The OECD further notes that “a company is defined to be academic when at least one founder holds a PhD or doctoral degree”, and this group represents almost 10% of the dataset. Yet, the authors also consider “start-ups that build on formal intellectual property that is based on academic research” as academic entrepreneurship, regardless of the founders’ academic background.
With this clearer picture in mind, the report finds that academic start-ups represent around 10% of all start-ups in OECD countries (25% in the case of Switzerland, among the strongest performers with South Korea) and are strongly concentrated in deep-tech fields such as health and biotechnology, energy and sustainability, and advanced manufacturing. Their inventions are more radical, more science-based, and more likely to cite academic literature or university patents. Yet despite this innovation intensity, academic teams often face hurdles in attracting private capital. They bring exceptional technical expertise but typically lack business networks and commercial experience, an asymmetry that shapes their financial trajectories.
A central message of the report is the critical role of non-equity instruments, notably grants and assistance programmes, as early enablers of science-based entrepreneurship. Academic start-ups are significantly more likely than others to access these instruments, and they do so earlier in their development. Assistance mechanisms such as incubators and accelerators, which blend mentoring, skills development, and networking, stand out as particularly powerful: start-ups beginning their journey with assistance show a far higher probability of transitioning to equity investment in subsequent rounds.
Conversely, grants present a more complex reality. While they are essential to reducing technological risk and enabling prototyping, the report highlights a strong path dependency: start-ups initially funded by grants are far more likely to continue relying on them and significantly less likely to raise equity later. This “grant lock-in” effect particularly affects academic founders, reinforcing follow‑on financing gaps and limiting growth potential.
The OECD’s policy implications are clear: to unlock the full potential of academic innovation, grant schemes must be complemented by structured entrepreneurial support, and ecosystems should promote skill complementarity within founding teams. Expanding access to accelerators, incubators, and specialised training for research-based founders, especially within universities, can significantly improve start-ups’ ability to attract private capital and scale high-impact technologies.
With the Startup and Scaleup Strategy, the EU seems to be on track to address barriers highlighted in the OECD report. First, by proposing the EU Innovation Act (expected by the end of March 2026) that aims to (i) push for innovation-friendlier regulatory frameworks and facilitate the setting up of regulatory sandboxes, (ii) boost market access and innovation procurement, and (iii) facilitate the commercialisation of publicly funded research results. Second, with a “28th Regime” (also expected by the end of March 2026), a new type of EU-wide legal entity established digitally within 48 hours, aiming to simplify cross-border operations, attract investments, and facilitate the scaling-up of companies. And, finally, with its “Lab to Unicorn” initiative, which supports the launch of Startup and Scaleup Hubs (set to be announced in June 2026) with the aim of creating a “connected network of Europe’s leading and emerging startup supporting structures”. This shows that, beyond strengthening the European Innovation Council, which offers non-dilutive grants, blended finance and acceleration services, the Commission already supports academic entrepreneurship in different ways (through Horizon Europe and Erasmus+). Furthermore, the Commission also seeks better connections among universities, research and higher education institutions, research and technology organisations, corporates, entrepreneurs, and investors.
Albeit the abovementioned efforts, the OECD’s message is timely for Europe. As deep‑tech and mission-driven innovation become critical to competitiveness and societal resilience, ensuring that academic start-ups can progress from breakthrough ideas to market-ready solutions is no longer optional, it is a strategic imperative.