Previous studies suggest that spin-outs will locate in close proximity to the firm from which the), spawn. As a result of this process, clusters of entrepreneurial activity tend to develop around a few strong parent firms. But do all spin-outs really stay close to home? We demonstrate that spin-out firms choose heterogeneous technological and market strategies, and we hypothesize that firms with more aggressive strategies have a greater need to maintain local relationships. We find supporting evidence of our theory by analyzing the location, technology, and market decisions of intraindustry spin-outs in their first year in the disk drive industry Copyright (C) 2011 Strategic Management Society.