Happens where one firm creates another in order to exploit the innovation. An attractive option where technology of innovation is not closely related to core technology of the firm, as it avoids unnecessary distractions.
Parent Company divests itself of the technology by selling off the subsidiary company where it is based. Can be sold by: (Sale to another company, MBO sold to its managers or sold to a venture capital org who will invest in company with view of selling it off later in future.
Can generate substantial sum, compared to future income stream associated with licensing. If parent company, for instance is anxious to re-invest proceeds in other ventures (Core Business and new ventures) , then clearly spin off has attractions.