This paper examines the role of out-licensing as a commercialization strategy for new technology startups and its impact on entrepreneurial exits. We focus on the biopharmaceutical industry, highlighting how out-licensing enables startups to share R&D risks, access complementary assets, and secure resources for scaling innovations. We show that early-stage technologies more strongly predict out-licensing compared to later-stage technologies due to higher uncertainty and the need for experimentation. Additionally, higher technological generality—i.e. a greater potential to apply technologies across multiple domains—amplifies the relationship between early-stage technologies and out-licensing. Out-licensing is also shown to positively predict entrepreneurial exits. While late-stage innovations directly contribute to exits, early-stage innovations influence exit outcomes indirectly through out-licensing. The paper adds to the literature on markets for technology and entrepreneurship, emphasizing that out-licensing is a dynamic strategy for startups that supports startups in navigating uncertainty, validating technologies, and achieving liquidity events.
