University spinoffs (USOs) are firms created to commercialize research outcomes or innovative technologies developed by university members. This paper adopts a systematic literature review approach for exploring the trajectory of the USO research field. It categorizes the literature based on two perspectives: the process of how USOs develop and what factors can explain the variance of USO development; the paper critically examines the USO literature through these two lenses. By integrating these two perspectives and examining 120 peer-reviewed journal articles published between 1987 and 2022, we develop a comprehensive model of USO development. The paper contributes to the extant literature on academic entrepreneurship by contending that while the “how” and “what” questions pose unique challenges for USO scholars, they cannot be separated because the process and variance models are complementary and important in advancing research on USOs. As such, we explore and identify specific factors that affect each of the distinct phases of the USO development at the institutional, organizational, and individual levels of analysis which form the basis for a rich future research agenda.