How many promising R&D projects are going nowhere at your company? Ten? Fifty? One hundred? Many organizations sit on a plethora of potentially valuable ventures that languish because they don’t quite fit into current strategies or operations. And when times get tough, these non-core projects become obvious candidates for divestiture. By packaging them as stand-alone entities and spinning them out, companies can quickly tone up their finances while creating the potential for a cash windfall should the new business one day go public.
A version of this article appeared in the June 2002 issue of Harvard Business Review.