If you want something really useful done, go to Cambridge. You don’t have to stay forever, but that’s the place to go.
Tomas Coates Ulrichsen and his colleagues at the Policy Evidence Unit for University Commercialisation and Innovation (UCI) at the University of Cambridge published a great report earlier this year “Busting Myths and Moving Forward - The reality of UK university approaches to taking equity in spin outs”.
https://www.ifm.eng.cam.ac.uk/research/uci-policy-unit/uci-news/uci-report-on-university-approaches-to-spinout-equity/
To quote from the Report:
“We urgently need to move beyond a singular focus on the amount of equity a university takes in its spinouts at foundation.” “Other critical barriers are much more structural and harder to overcome.”
Other barriers are described as:
“license terms and ongoing access to university facilities and expertise, both of which will shape the company’s valuation”
“the ability to de-risk technologies and the business venture sufficiently before having to incorporate and seek investors”
“the ability of spinouts to find sufficient talent and expertise – entrepreneurial, managerial, commercial, technical – in their local economies, and access the necessary facilities and equipment to further their development”
“the investment environment readily accessible to universities and founding teams”
“the availability of resources within universities to support increasing numbers of academics seeking to commercialise their research.”
I fully agree with this. One of the ways that universities can help move the debate on is to have a very clear understanding of their position on a range of practical issues around how they approach supporting and facilitating spin-out companies. Universities need to know their stuff. This helps because it supports the view everyone needs to move on; if universities are unclear on their position, it will be difficult to move on fully, in the ways the Report quite rightly suggests.
Here is a list of 15 questions in four areas that may help to move “urgently beyond”.
Access to Research Results
1. Does the university make research results it owns (the IP) available to the spin-out under licence or by assignment? If licence (certainly preferable for the university for reasons of patent control, termination, company failure), how does the university respond to later requests for assignment?
2. Does the university make the IP available for money or for free? Yes or No decision required. (Is it allowed to provide it for free? There may be research funder, charity, state requirements.)
Question 2 is completely separate from Question 1. Understanding this is very helpful: assignment does not mean free.
3. If for free – why?
4. If for money – why? Use of university owned IP, Reward all Contributors, Obligations to Inventors, Obligations to third parties (research funders).
5. If for money – how much and how structured? Sensible terms, to a start-up with no revenue. Free for N years? Royalty “holiday”. Be generous.
Shareholdings
[For University “Founder” Shares; not University “Investor” shares]
1. Does the University want shares in its spin-outs? Yes or No decision required.
2 . If no - why? There may be state restrictions on ownership by public universities. There may be concerns about shareholder management responsibility and workload.
3. If yes - why? Opportunity created within university; Permissions from university for employee involvement; Support provided; Obligations to third parties (research funders)
4. If yes - how many? This is the big one, and universities are gradually developing clear positions, which are appropriately generous. (See Imperial, Oxford, the Report above etc).
People
1. Can university employees be Directors of their spin-out?
2. Can university employees be paid (or unpaid) Consultants for their spin-out?
3. Can university employees become part-time to work for their spin-out? And can they return to full-time?
Equipment, Facilities, Premises
1. Can a spin-out operate from university premises?
2. Can a spin-out use university equipment and facilities?
3. If yes, how are these costed and priced?
No one said it was easy; having answers to all these separate questions will be really helpful to "move beyond".
Comments and other questions welcome, as always.
Happy Holidays and best wishes for 2023.
Tomas Coates Ulrichsen and his colleagues at the Policy Evidence Unit for University Commercialisation and Innovation (UCI) at the University of Cambridge published a great report earlier this year “Busting Myths and Moving Forward - The reality of UK university approaches to taking equity in spin outs”.
https://www.ifm.eng.cam.ac.uk/research/uci-policy-unit/uci-news/uci-report-on-university-approaches-to-spinout-equity/
To quote from the Report:
“We urgently need to move beyond a singular focus on the amount of equity a university takes in its spinouts at foundation.” “Other critical barriers are much more structural and harder to overcome.”
Other barriers are described as:
“license terms and ongoing access to university facilities and expertise, both of which will shape the company’s valuation”
“the ability to de-risk technologies and the business venture sufficiently before having to incorporate and seek investors”
“the ability of spinouts to find sufficient talent and expertise – entrepreneurial, managerial, commercial, technical – in their local economies, and access the necessary facilities and equipment to further their development”
“the investment environment readily accessible to universities and founding teams”
“the availability of resources within universities to support increasing numbers of academics seeking to commercialise their research.”
I fully agree with this. One of the ways that universities can help move the debate on is to have a very clear understanding of their position on a range of practical issues around how they approach supporting and facilitating spin-out companies. Universities need to know their stuff. This helps because it supports the view everyone needs to move on; if universities are unclear on their position, it will be difficult to move on fully, in the ways the Report quite rightly suggests.
Here is a list of 15 questions in four areas that may help to move “urgently beyond”.
Access to Research Results
1. Does the university make research results it owns (the IP) available to the spin-out under licence or by assignment? If licence (certainly preferable for the university for reasons of patent control, termination, company failure), how does the university respond to later requests for assignment?
2. Does the university make the IP available for money or for free? Yes or No decision required. (Is it allowed to provide it for free? There may be research funder, charity, state requirements.)
Question 2 is completely separate from Question 1. Understanding this is very helpful: assignment does not mean free.
3. If for free – why?
4. If for money – why? Use of university owned IP, Reward all Contributors, Obligations to Inventors, Obligations to third parties (research funders).
5. If for money – how much and how structured? Sensible terms, to a start-up with no revenue. Free for N years? Royalty “holiday”. Be generous.
Shareholdings
[For University “Founder” Shares; not University “Investor” shares]
1. Does the University want shares in its spin-outs? Yes or No decision required.
2 . If no - why? There may be state restrictions on ownership by public universities. There may be concerns about shareholder management responsibility and workload.
3. If yes - why? Opportunity created within university; Permissions from university for employee involvement; Support provided; Obligations to third parties (research funders)
4. If yes - how many? This is the big one, and universities are gradually developing clear positions, which are appropriately generous. (See Imperial, Oxford, the Report above etc).
People
1. Can university employees be Directors of their spin-out?
2. Can university employees be paid (or unpaid) Consultants for their spin-out?
3. Can university employees become part-time to work for their spin-out? And can they return to full-time?
Equipment, Facilities, Premises
1. Can a spin-out operate from university premises?
2. Can a spin-out use university equipment and facilities?
3. If yes, how are these costed and priced?
No one said it was easy; having answers to all these separate questions will be really helpful to "move beyond".
Comments and other questions welcome, as always.
Happy Holidays and best wishes for 2023.