The entrepreneurship and higher education literatures suggest that universities cannot generate significant knowledge spillovers unless knowledge creation is followed by knowledge transformation and commercialization. Although several university business models have been proposed in the literature, extant studies assume that the elements required by and involved in the creation of new knowledge for commercialization are automatically aligned. A paucity of research exists explaining how entrepreneurial and knowledge capital congruence contributes to teaching, research and entrepreneurial activity -- the 'three-ring entrepreneurial university'. This study develops a conceptual business model of entrepreneurial universities, and introduces and demonstrates how knowledge spillover occurs, which stakeholders are involved and at which level of entrepreneurial university (individual, organizational, institutional).