August 2023
A guide to
university spinouts
Sponsored by
Produced in partnership with City Road Communications
August 2023
A guide to
university spinouts
Sponsored by
Produced in partnership with City Road Communications
Contents
JUMP TO A SECTION THAT INTERESTS YOU
Contents
JUMP TO A SECTION THAT INTERESTS YOU
University spinouts:
What are the benefits and risks?
University spinouts are companies founded to commercialise innovative technologies, products, or services that originate from academic research conducted within universities. These spinout companies bridge the gap between academia and entrepreneurship by translating discoveries into viable business ventures. Spinouts are a unique form of startup and come with their own benefits and risks.
Benefits
Economic Impact
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Jamie Whitcroft
Head of early stage ecosystem coverage and strategic partnerships, HSBC Innovation Banking
“Universities are hotbeds for innovation. They attract the brightest minds and give them the mandate, time, and resources they need to turn ground-breaking discoveries into the businesses of tomorrow.
“This means that talented students can easily come together and explore a variety of ideas quickly, safe in the knowledge that they have a strong support system.
“In addition, there are exclusive funds dedicated to backing spinouts, and less competition than the open market, making it an attractive proposition for those with an entrepreneurial spirit.”
"What the Midlands has done well is capitalising on the industries the regional economy was built on," says Aaron Baker, investor at BGF. "The automotive sector and its entire supply chain has seen exceptional tech innovation in the region – from batteries to electric vehicles – and that's because of the talent, experience, and rich heritage here. And this has evolved into global leading verticals in the sector, such as Leamington Spa's dominance in the gaming industry."
Challenges
Intellectual property
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Funding
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Transferring research to the real world
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Ariella Young
Senior VP, early stage ecosystem coverage, HSBC Innovation Banking
“There’s also the question of location. Spinouts, like other startups, need to be ‘in the right place at the right time’. Funding tends to flow towards flagship universities, and it can be difficult for spinouts in remote areas to access the limited funds available.
“And even if they do, some universities take a major stake in the business, which may affect long-term profitability and deter later investors.”
"What the Midlands has done well is capitalising on the industries the regional economy was built on," says Aaron Baker, investor at BGF. "The automotive sector and its entire supply chain has seen exceptional tech innovation in the region – from batteries to electric vehicles – and that's because of the talent, experience, and rich heritage here. And this has evolved into global leading verticals in the sector, such as Leamington Spa's dominance in the gaming industry."
University spinouts
data snapshot
Number of student spinouts formed out of the University of the Arts, London – the highest of any UK higher education provider for 2021-2022 | Source: Higher Education Statistics Agency
The average extra amount that University of Oxford spinouts receive over those from the University of Cambridge | Source: Price Bailey
Sum raised in equity funding by UK spinouts in 2022, with over half (56.5%) at seed at the start of the year. | Source: Beauhurst
The share spinouts raised out of the total investment raised by UK companies last year | Source: British Business Bank
The amount generated by commercial businesses spun out from the University of Cambridge | Source: London Economics
The percentage of founding equity that more than one fifth of universities take in spinouts | Source: University of Cambridge
What makes a successful spinout?
University spinouts have emerged as a vital source of innovation and economic growth in the UK. To understand what makes a successful spinout, it is important to explore the key factors and metrics that contribute to their success.
A solid research foundation is fundamental to the success of spinouts. The best spinouts have conducted innovative research, often through the facilities of the university they spun out from, to address a real-world market need.
The protection and management of intellectual property play vital roles in securing a competitive advantage and reassuring investors.
An entrepreneurial team with a blend of technical expertise and business acumen is essential. Successful spinout founders can effectively translate academic research into viable products or services. The team must have the skills to bridge the gap between academia and business, or bring in staff who can provide such expertise. Additionally, it is important to secure access to funding for spinouts. In addition to venture capital and angel investment, successful spinouts take advantage of university-backed funding schemes and grants for academic research.
Market validation is a crucial step in gauging the commercial viability of a spinout's innovations. Understanding market demand and identifying potential customers and industry partners contribute to their success. Strategic collaborations with established industry players can provide valuable insights and resources, facilitating market entry and growth.
Measuring the success of university spinout tech startups involves several key metrics. Revenue growth is a primary indicator, as is the case with any other startup. However, the expectation is that deep tech and life science spinouts take longer to bring in revenues. Therefore, the ability to attract external investment is another crucial metric, reflecting the startup's potential for long-term growth and sustainability.
The creation of jobs and the impact on the local and national economy are vital indicators of success. This can be particularly significant for spinouts that are based in areas where the local university is the primary hub for economic, technological and entrepreneurial growth.
Furthermore, a strong IP portfolio, with a substantial number of patents filed, granted, and licensed, demonstrates the startup's innovative potential. The adoption and usage of the startup's products or services by customers and end-users provide insights into market penetration and acceptance.
Spinout case studies
Oxford Nanopore Technologies - University of Oxford
One of the most notable success stories of a British university spinout, Oxford Nanopore Technologies is a life science company that specialises in the sequencing of DNA and RNA. The company was founded in 2005 by Hagan Bayley – a professor of chemical biology – and former Oxford chemists Dr Spike Willcocks and Dr Gordon Sanghera under its original name, Oxford Nanolabs.
The company was built upon Bayley’s work on nanopore sequencing, a technique that uses protein nanopores to read individual DNA molecules. In 2014, the company achieved a major breakthrough with the launch of its portable DNA sequencer, called the MinION. This handheld device brought DNA sequencing capabilities out of the laboratory, with some calling it a democratisation of access to genomic data.
Over the years, Oxford Nanopore has attracted substantial investments. Early funding came from the Oxford University Innovation Fund as well as IP Group. The big funding breakthrough came in 2006, when the company secured $10.3m in a Series A funding round. In subsequent years, Oxford Nanopore continued to raise funds through later rounds, garnering hundreds of millions of pounds.
The company attained unicorn status in 2016 and went public on the London Stock Exchange in 2021 at £3.4bn, the largest spinout IPO in UK history.
Paragraf - University of Cambridge
Paragraf’s journey began in 2015 in Cambridge, when founders – Dr Simon Thomas, an expert in graphene and nanomaterials; Professor Sir Colin Humphreys, a physicist and material scientist; and Dr Ivor Guiney – wanted to harness the potential of graphene, a thin and strong material made of a single layer of carbon atoms tightly arranged in a hexagonal pattern.
The company’s foundation was rooted in research conducted at the University of Cambridge, where the founders recognised the capabilities of the material for improving electronics and sensors. The company sought to commercialise the technology by integrating it into various electronic devices.
Paragraf claims to be the first company in the world to mass-produce graphene-based electronic devices using standard semiconductor processes. Following its spinout from Cambridge in 2017, Paragraf picked up millions in funding from venture capital firms as well as grants from Innovate UK and the European Regional Development Fund.
The start of the 2020s was a major period of growth for the company, as it landed major strategic partnerships with the likes of Rolls Royce and CERN to demonstrate practical applications for its technology. Since then, the company has picked up a couple of Elektra Awards for excellence in electronics and has continued to expand with the construction of additional manufacturing facilities.
Ceres Power – Imperial College London
Ceres, the clean energy tech company specialising in low-carbon power solutions, first began as an idea at the prestigious Imperial College London in the late 1990s. The company was founded in 2001 by Professor Brian Steele, Dr Mark Selby and Dr Chris Tomlinson to commercialise solid oxide fuel cell (SOFC) technology that was developed at the university.
Backing for the company first came in the form of a £300,000 grant awarded to Steele to develop SOFC materials. After officially spinning out from Imperial, the company benefitted from further grants to build the prototype of its first full system. In 2003, the company was listed publicly on the Alternative Investments Market (AIM) in London.
Ceres would go on to form strategic partnerships with industry players, including British Gas and global power equipment manufacturer Cummins, to further develop and commercialise its fuel cell systems. Over the years, Ceres has worked closely with German engineering firm Bosch and Chinese engine and vehicle manufacturer Weichai Power to apply its technology to international markets. These partnerships also included sizeable investments into the West Sussex-based company. Today, the company is valued at more than £500m and continues to work with international engineering firms to explore further applications of its SOFC systems.
Quell Therapeutics – University College London
Founded in 2019 by Hans Stauss and Emma Morris – both professors at University College London (UCL) – Quell Therapeutics is a biotechnology company known for developing engineered T regulatory (Treg) cell therapies. Treg cell therapies are a form of medical technology that modifies certain white blood cells to make them more effective at targeting specific diseases.
Funding came quickly for Quell Therapeutics, as the firm secured a £35m investment round from Syncona, along with the UCL Technology Fund, within just a few months. Just a couple of years later in 2021, Quell Therapeutics added an extra £27m to its funding from its existing investors before landing a £121.3m Series B round to fund a host of new medical projects.
Most recently, Quell Therapeutics secured further funding from the pharmaceutical giant AstraZeneca, developer of the Covid vaccine, which invested £66m as part of a wider partnership project in June 2023. Through the partnership, the companies began collaborating on Treg-based solutions to type-1 diabetes and inflammatory bowel disease.
Despite only spinning out four years ago, Quell Therapeutics has grown rapidly as investors and industry figures continue to see great promise in the firm’s specialised disease-combatting technology. The company has been valued at more than £600m as of June 2023.
Spinouts to watch
University of origin: University of Liverpool
Year founded: 2022
Founders: Dr Marie Yang and Professor Aras Kadioglu
Total funding: £600,000+
Why you should watch:
ReNewVax’s development platform could be used in the creation of a variety of vaccines. It is working on vaccine projects for streptococcus pneumoniae, streptococcus agalactiae and streptococcus pyogenes.
It has received £299,578 from Innovate UK and £300,000 from the University of Liverpool’s Enterprise Investment Fund. ReNewVax hopes to have its pneumococcal vaccine in clinical trials before the end of 2025.
University of origin: University College London
Year founded: 2017
Founders: Tom Heenan, Chun Tan, Paul Shearing and Dan Brett
Total funding: £2.85m
Why you should watch:
Gaussion has a wide addressable market with its fast quick charging battery technology. The spinout claims its solution doesn’t affect a battery’s overall health, a drawback to present charging technologies.
In April, BGF and UCL Technology Fund led a £2.85m investment into Gaussion. The firm says it has achieved charging times of 10 minutes on commercial cells that typically take between one and five hours.
University of origin: Newcastle University
Year founded: 2023
Founders: Professor Alex Yakovlev and Dr Rishad Shafik
Total funding: £200,000
Why you should watch:
The Newcastle spinout is developing a coprocessor – used to supplement the power of a processor – for AI. Mignon claims its coprocessor will use 10,000 times less energy compared to commercial neural network accelerators and 1000 times better throughput.
The computation takes place on the chip, which means it does not need to connect to the cloud. Mignon is in the midst of a pre-seed fundraise, targeting up to approximately £1.2m.
University of origin: University of Cambridge
Year founded: 2021
Founders: Arta Selmani, Dr Lívia Ribeiro de Souza and Dr Liz Zijing Li
Total funding: £702,000
Why you should watch:
Concrete is everywhere but not without its flaws. However, the Cambridge spinout has developed a biomimetic “self-healing” concrete solution that eliminates the need for human involvement and cuts the environmental impact of repairs.
The self-healing process begins when a crack first appears, reducing the chance of a serious structural flaw developing.
University of origin: University of Birmingham
Year founded: 2022
Founders: Professor Michael Holynski, Dr Andrew Lamb and Jonathan Winch, Pete Stirling and Connor Frapwell
Total funding: £2m
Why you should watch:
Delta g has built quantum sensors that can visualise the Earth’s subsurface and other unmapped locations.
Its sensors can detect changes in gravitational fields by dropping clouds of atoms to determine the density of objects. The Birmingham spinout collected £1.5m in a pre-seed led by Science Creates Ventures in July this year.
Spinouts to watch
University of origin: University of Liverpool
Year founded: 2022
Founders: Dr Marie Yang and Professor Aras Kadioglu
Total funding: £600,000+
Why you should watch:
ReNewVax’s development platform could be used in the creation of a variety of vaccines. It is working on vaccine projects for streptococcus pneumoniae, streptococcus agalactiae and streptococcus pyogenes.
It has received £299,578 from Innovate UK and £300,000 from the University of Liverpool’s Enterprise Investment Fund. ReNewVax hopes to have its pneumococcal vaccine in clinical trials before the end of 2025.
University of origin: University College London
Year founded: 2017
Founders: Tom Heenan, Chun Tan, Paul Shearing and Dan Brett
Total funding: £2.85m
Why you should watch:
Gaussion has a wide addressable market with its fast quick charging battery technology. The spinout claims its solution doesn’t affect a battery’s overall health, a drawback to present charging technologies.
In April, BGF and UCL Technology Fund led a £2.85m investment into Gaussion. The firm says it has achieved charging times of 10 minutes on commercial cells that typically take between one and five hours.
University of origin: University of Cambridge
Year founded: 2021
Founders: Arta Selmani, Dr Lívia Ribeiro de Souza and Dr Liz Zijing Li
Total funding: £702,000
Why you should watch:
Concrete is everywhere but not without its flaws. However, the Cambridge spinout has developed a biomimetic “self-healing” concrete solution that eliminates the need for human involvement and cuts the environmental impact of repairs.
The self-healing process begins when a crack first appears, reducing the chance of a serious structural flaw developing.
University of origin: Newcastle University
Year founded: 2023
Founders: Professor Alex Yakovlev and Dr Rishad Shafik
Total funding: £200,000
Why you should watch:
The Newcastle spinout is developing a coprocessor – used to supplement the power of a processor – for AI. Mignon claims its coprocessor will use 10,000 times less energy compared to commercial neural network accelerators and 1000 times better throughput.
The computation takes place on the chip, which means it does not need to connect to the cloud. Mignon is in the midst of a pre-seed fundraise, targeting up to approximately £1.2m.
University of origin: University of Birmingham
Year founded: 2022
Founders: Professor Michael Holynski, Dr Andrew Lamb and Jonathan Winch, Pete Stirling and Connor Frapwell
Total funding: £2m
Why you should watch:
Delta g has built quantum sensors that can visualise the Earth’s subsurface and other unmapped locations.
Its sensors can detect changes in gravitational fields by dropping clouds of atoms to determine the density of objects. The Birmingham spinout collected £1.5m in a pre-seed led by Science Creates Ventures in July this year.
Top university spinout creators
As one of the oldest and most prestigious universities in the world, Oxford has fostered a strong culture of innovation and entrepreneurship. Oxford’s spinout success can be attributed to its vast network of exceptional academics, researchers and students that contribute to a rich source of groundbreaking ideas and technologies that can be translated into commercial ventures. Between 2011 and January 2023, it produced 205 spinouts – the most out of any UK university.
The institution’s reputation and geographical location also allow for plenty of access to investors on top of the considerable funds held by the university itself. Oxford’s Technology Transfer Office also plays a pivotal role in supporting and facilitating the process of turning academic research into commercial products or services. It provides expertise in intellectual property management, business development and investment connections.
Oxford’s spinouts span various sectors. Standouts include biotechnology, pharmaceuticals and AI. Some of the biggest spinouts from Oxford include DNA sequencing pioneer Oxford Nanopore Technologies and Vaccitech, which played a major role in the development of the Oxford-AstraZeneca Covid-19 vaccine.
Like Oxford, Cambridge has garnered a reputation as a hotbed of innovation and commercialisation. Its outstanding record of academic achievement and strong focus on research and innovation has made it an ideal institution for high-growth spinouts.
One of Cambridge’s distinct advantages is its innovation hubs: the Cambridge Science Park and the Cambridge Biomedical Campus, which attract industry partners and investors. Cambridge’s collaborative culture plays a vital role in encouraging interdisciplinary research. Departments and faculties frequently collaborate on projects, supporting the innovation and commercialisation potential of its research. The Cambridge Enterprise is the university’s commercialisation arm that provides advice on IP, business planning and funding opportunities.
It has produced 145 spinouts since 2011, the second highest in the UK. Cambridge’s notable spinouts include the cybersecurity firm Darktrace, semiconductor designer Arm and gene editing biotech firm CRISPR Therapeutics.
Imperial College London is renowned for its world-class research as a science and engineering institution. Its commitment to fostering entrepreneurship is evident through initiatives such as the Imperial Innovations platform, which supports researchers in translating their discoveries into viable businesses. The platform offers access to mentoring, seed funding and industry connections.
The location of Imperial is also an undeniable advantage in its ability to produce world-class spinout companies. Located in the heart of London, the university benefits from a thriving startup ecosystem that provides opportunities for collaboration, networking and attracting investment. Among the 108 spinouts birthed from Imperial College London since 2011 are clean fuel company Ceres Power and biometric smartcard developer Freevolt.
University College London is one of the UK’s leading research-intensive universities and is renowned for its contributions to innovation and entrepreneurship. UCL’s diverse and talented academic community produces cutting-edge research and transformative ideas that are ideal for commercialisation.
The UCL Innovation & Enterprise team offers founders personalised guidance in navigating the complexities of business. Like Imperial, UCL’s location in London is a huge advantage, allowing immediate access to the financial, technological and entrepreneurial centre of the UK. Notable spinouts from UCL include Bramble Energy and artificial intelligence startups Humanloop and Bloomsbury AI, which was acquired by Meta (then called Facebook) in 2018. It has created 90 spinouts over the last 12 years.
Fastest-growing spinout creators
While Oxford, Cambridge, Imperial and UCL are regularly credited as the dominant players in the UK’s spinout economy, the University of Manchester is one of a handful of institutions rapidly growing to prominence for its production of new startups.
Recent data from Beauhurst found that Manchester was leading the way for spinout growth, having the highest proportion of growth of spinout creation last year. The University of Manchester has made significant investments in developing its innovation ecosystem. Initiatives such as the University of Manchester Intellectual Property (UMIP) and University of Manchester Innovation Factory support researchers and entrepreneurs in navigating the commercialisation process.
The university’s strategic location in Greater Manchester, a vibrant and growing business and technology hub, offers considerable advantages. Manchester’s robust network of startups, investors and accelerators creates ample opportunities for collaboration, funding and market access. Notable spinouts include Graphene Enabled Systems (GES), medical imaging company Nanoco and pharmaceutical developer C4X Discovery.
Similarly to Manchester, data has shown the University of Bristol is among the fastest-growing generators of spinout companies in the UK. The University of Bristol has emerged as a dynamic force in spinout generation, with 47 spinouts according to Beauhurst.
The Bristol SETsquared partnership, a collaboration between the University of Bristol and four other universities, serves as a business incubator and accelerator. This initiative offers valuable support to spinout companies.
Furthermore, Bristol's location in the South West of England places it at the intersection of various industries, creating a diverse ecosystem for spinout opportunities. This region is known for its strengths in aerospace, advanced engineering, and creative industries, offering ample scope for collaboration and market access.
Notable spinout companies from the University of Bristol include Ultraleap (formerly Ultrahaptics), a technology company that develops touchless haptic feedback solutions, and Ziylo, a biotechnology firm focused on glucose monitoring for diabetes management.
The spinout lifecycle explained
As with any startup, the journey of a university spinout begins with an idea. These ideas often originate from research conducted within the university’s facilities or through the ideas of researchers, faculty members or students. The early work for spinouts can be supported by access to the educational institution’s labs, equipment and personnel. As universities are protective of intellectual property made within their walls, they will take a key role in identifying and protecting the idea through patents. The exact ownership of the IP would depend on several factors, including if the founder made material use of university equipment, which could determine if the university controls the IP and could affect the stake it owns in the company itself.
After the idea has been conceived and patents have been secured, the founder and the university will determine how best to proceed with the concept. While forming a spinout company is one option, in many cases the technology is instead licenced to existing firms. This option presents a clearer route to profit from the idea and comes with the benefit of trusting the tech to experienced businesses, though it limits how far it can go compared to spinning out. Should the decision be made to licence, that does not mean that a spinout cannot be formed, so long as the terms allow the creator the freedom to retain the rights when they are ready to form a new company.
Once the startup establishes a foundation for its idea, it conducts market research and feasibility studies to evaluate the demand for its product. It analyses the competitive landscape, identifies target customer segments, and assesses the scalability of its solution. Feedback from potential customers and industry experts helps refine the technology to align it better with market needs. This process aims to find the right product-market fit, ensuring that the startup's offering is both desirable and viable. It also helps the company understand if it is economical to make the product. For spinouts, the process of marketing can be difficult, as they are typically based on new technologies at a very early stage that might not yet be a viable product.
After ironing out the technology and the target market, the university spinout will inevitably need to commercialise. Securing funding is key to keeping any startup running as it looks to commercialise. However, in the case of spinouts, they are viewed differently to investors than other startups. There is a perception that when starting out, spinouts are at an even earlier stage than a new startup, referred to by researcher, professor and journalist Scott Shane as “minus two stage companies”. Investors favour spinouts with strong patent protection, with ownership of IP often being a deciding factor. In the case of equity investors, it is preferable for the company to not have given a major stake to any inactive partners, including universities.
As with any startup, the journey of a university spinout begins with an idea. These ideas often originate from research conducted within the university’s facilities or through the ideas of researchers, faculty members or students. The early work for spinouts can be supported by access to the educational institution’s labs, equipment and personnel. As universities are protective of intellectual property made within their walls, they will take a key role in identifying and protecting the idea through patents. The exact ownership of the IP would depend on several factors, including if the founder made material use of university equipment, which could determine if the university controls the IP and could affect the stake it owns in the company itself.
After the idea has been conceived and patents have been secured, the founder and the university will determine how best to proceed with the concept. While forming a spinout company is one option, in many cases the technology is instead licenced to existing firms. This option presents a clearer route to profit from the idea and comes with the benefit of trusting the tech to experienced businesses, though it limits how far it can go compared to spinning out. Should the decision be made to licence, that does not mean that a spinout cannot be formed, so long as the terms allow the creator the freedom to retain the rights when they are ready to form a new company.
Once the startup establishes a foundation for its idea, it conducts market research and feasibility studies to evaluate the demand for its product. It analyses the competitive landscape, identifies target customer segments, and assesses the scalability of its solution. Feedback from potential customers and industry experts helps refine the technology to align it better with market needs. This process aims to find the right product-market fit, ensuring that the startup's offering is both desirable and viable. It also helps the company understand if it is economical to make the product. For spinouts, the process of marketing can be difficult, as they are typically based on new technologies at a very early stage that might not yet be a viable product.
After ironing out the technology and the target market, the university spinout will inevitably need to commercialise. Securing funding is key to keeping any startup running as it looks to commercialise. However, in the case of spinouts, they are viewed differently to investors than other startups. There is a perception that when starting out, spinouts are at an even earlier stage than a new startup, referred to by researcher, professor and journalist Scott Shane as “minus two stage companies”. Investors favour spinouts with strong patent protection, with ownership of IP often being a deciding factor. In the case of equity investors, it is preferable for the company to not have given a major stake to any inactive partners, including universities.
Advice for spinouts
Alex Threipland
Head of early stage portfolio management, HSBC Innovation Banking
“However, it is never easy to start a business. While a spinout may enjoy the added support of a university, the trade-off is sacrificing significant equity – assuming of course that you can beat your peers to the limited funding on offer.
“Make sure you understand both the benefits and disadvantages of this route. We live in an era where it is possible to raise funds and build a business independently, but if this feels like the right path for you, go for it and try to enjoy the process.”
"What the Midlands has done well is capitalising on the industries the regional economy was built on," says Aaron Baker, investor at BGF. "The automotive sector and its entire supply chain has seen exceptional tech innovation in the region – from batteries to electric vehicles – and that's because of the talent, experience, and rich heritage here. And this has evolved into global leading verticals in the sector, such as Leamington Spa's dominance in the gaming industry."
Investing in spinouts:
key considerations
This could be equity that is kept by either the founding university where the spinout’s research stems from, or a commercial organisation it is spun out from.
British universities have been criticised in the past for taking too much founding equity in their spinouts and therefore not leaving enough on the table for founders, team members and outside investors.
“What matters most to new investors in a spinout is the ability and appetite of existing investors to continue to support funding, the alignment of all parties involved, and the quality of the team,” says Moray Wright, CEO of Parkwalk Advisors, one of the UK’s most active spinout investors.
Many universities have what is known as a technology transfer office. It is a department dedicated to managing the commercialisation of intellectual property generated inside of the academic institution.
University technology transfer offices are responsible for sitting in the middle of the academic research and any interested parties such as investors. “The issue of retained equity is undoubtedly important; however, in our experience, new investors tend not to be put off by the quantum of the university’s stake,” adds Wright.
A criticism of technology transfer offices is that they are incentivised to act in the interest of their university and are driven by league tables, regardless of whether research should be spun out.
As with any startup, prospective investors will want to know an estimated timeline of how long the technology will take to get to a point of commercialisation and ultimately a return on their investment.
Founding documents should include an outline of deliverables and the expected time frame in which they will be achieved. Spinouts based on academic research tend to have a longer route to commercialisation than startups operating in established markets. However, an exit event can come sooner, such as a larger player acquiring a spinout to gain its IP.
Another key consideration is the ownership of the intellectual property that the spinout’s technology is based upon.
Without security around the underlying research or technology behind a spinout there is nothing to stop another company taking the research and building the same thing.
Licensing of intellectual property should be arranged with the university or corporation the spinout is branched out from.
Where next for UK university spinouts?
Spinout review
Equitable equity
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Professor’s privilege vs university ownership
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Rethinking tech transfer offices
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Glen Waters
Head of early stage practice, HSBC Innovation Banking
“Secondly, it’s imperative to reassess the equity stake that local universities take in spinouts. In the UK some universities take a much larger stake compared to those in the US.
“With more spinouts and a lower stake by the universities, this will make them more attractive to institutional investors at future funding rounds.”
"What the Midlands has done well is capitalising on the industries the regional economy was built on," says Aaron Baker, investor at BGF. "The automotive sector and its entire supply chain has seen exceptional tech innovation in the region – from batteries to electric vehicles – and that's because of the talent, experience, and rich heritage here. And this has evolved into global leading verticals in the sector, such as Leamington Spa's dominance in the gaming industry."
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