Product details

Founded in 1986, Generics has been functioning following a hybrid business model, on one hand, it acts as a technical advisory service company, remaining in close touch with the market. On the other hand, it acts as an incubator aimed at turning selected home-grown business ideas into independent companies, which are eventually sold in a trade sale; it thus functions as a ''start-up factory''. Since the firm''s foundation, well over 20 such firms have been ''spun out'' in this way. In addition, Generics makes early stage investments in start-ups active in areas, which are familiar to Generics, so as to re-enforce its knowledge base and network in the markets. Overall, Generics does focus on one thing: creating value from technical innovation, drawing on various vehicles to do so. Stressing that the crucial mission of business creation and growth is increasingly entrusted to the research and development function of technology companies, the case discusses the issues raised by this unusual business model, particularly as the company gets ready to become public, late in 2001. What are the pros and cons of such a move? How does the investment community see this business model? What are the implications of such a drastic change?