Rapid movements in the stock market, negative commercial and social responses to technology and the fast pace of technological development can prove fatal for high-tech companies if they do not have a strategy for dealing with risk.
Tim Cook, managing director of Isis Innovation, the University of Oxford's technology transfer company, told delegates at "Managing Risk in High-Tech Markets" that allowing time to deal with problems and establishing good relationships with staff and suppliers could help companies cope with crises.
Dr Cook also advised new companies to recruit experienced senior managers. "In the spin-offs we've done that have gone really well, the scientist has stayed in the university and we've recruited a managing director from outside who has directed a technology-based business before," he said.
Dr Cook said that in too many cases, the managing director set a high-risk strategy and walked away with a pay-off when it went wrong, he added.
Focusing capital on research and development most closely linked to your business goals reduced the effects of risk according to Daniel McCaughan, managing director of consultancy and investment company McCaughan Associates and former chief scientist of Nortel Networks.
"You have to make some clear decisions about what you're going to do, and then stick with that focus long enough to make it work," he said.
Dr Cook said that the window for flotation of high-tech companies was shut because investors seemed to put high-tech companies into the same bracket as dotcoms.
But he added that people should not be deterred from forming high-tech spin-offs.