This paper examines the cross-university variation in spin-off activity by faculty members from 124 US academic institutions, using a unique database including data on founders of both formal and informal spin-offs. Accordingly, the rate of spawning founders is positively affected by the quality of the institution and its departments, the R&D expenditure of the institution, and the strength of the local cluster. In addition, we find that institutions with higher licence revenues also have more spin-offs. In contrast to the traditional literature, we present evidence that both informal and non-local spin-offs are common and significant phenomena. Moreover, we find that the local cluster size and the university quality both increase the probability of spin-offs. However, when the relative quality of the institution is higher than the relative quality of the cluster, the probability of local academic spin-offs decreases.