Over the last decade, social capital concept has received considerable amount of research being regarded as an important value creation mechanism. However, we still have limited understanding about the nature of interaction between the dimensions of this capital, and how it can be useful in mitigating the impediments evolving during government-sponsored (i.e., engineered) university-industry collaboration (UIC). In this paper, we address the previous gap by analyzing the dynamics of social capital dimensions during the preformation and postformation stages of UIC. The paper relies on a unique context that comprises five embedded case studies of UIC for technology transfer: the Faraday Partnership Initiative, a UK government-backed novel scheme for enhancing innovation. The analysis shows that the impact and interaction of the dimensions were not static but rather varying over time. Further, we present a new value creation framework for social capital through mapping its power in reducing the intensity of difficulties emerged during the collaboration lifetime. We also identify two facilitating factors as critical in creating and maintaining social capital in engineered UIC. The present study thus contributes to a deeper understanding of the value of inter-organizational social capital.