What is a business spin-off?

The meaning of spin-off is the process by which a new company arises from an already existing one. Over time, the newly formed company will be spun off from the parent entity, which acted as incubator, and will acquire commercial and legal independence.

The spin-off concept can be defined as a business strategy that aims to support qualified workers from a large company. On many occasions it includes those projects that seek to give independence to some of the apartments of a company. In this way, the activities split off will be contracted to the new company, creating a close link between the two.

You have to differentiate between two types of spin-off. On the one hand, the business spin-off, which is when the new company comes from another previous company; and on the other, the academic spin-off, which has its origin in universities and research centers. In most cases, these new organizations that are created are linked to the field of technology.

There are several examples of spin-off companies that have emerged in Spanish universities. Among them is the Hespérides Biotech Group, which emerged from Pablo de Olavide, where its star product was a drink similar to beer made from orange juice, called Speriens. Another case is Galchimia, the result of the work of scientists from the University of Santiago, a company specializing in the manufacture of chemical products.

Advantages and disadvantages of spin-offs

Spin-offs have both advantages and disadvantages:


The benefits of spin-offs are various for him entrepreneur and university:

  • Entrepreneurs will be able to continue working in the business field that was generated in the beginning until they reach the final product. They also handle the option of hiring research staff to achieve better returns.
  • The university may contribute its knowledge to new projects.
  • The company will benefit from the qualified positions of the spin-offs, as well as from the taxes they pay and the products they develop.


However, there are also a number of risks:

  • In principle, the economic benefit of these new businesses is usually quite limited, since the business research reigns.
  • At the beginning, financial aid is usually given to spin-offs, either with subsidies or contributions from the mother company, but eventually they will have to support themselves.

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