A ‘myopic’ focus on concerns over equity splits in university spin-outs has been ‘put to bed’ one year on from the publication of a government-commissioned review, one of its authors has said.
Doctor Andrew Williamson, Managing Partner of Cambridge Innovation Capital and co-author of the independent review of university spin-out companies, said concerns over the size of equity stakes universities demanded from startups they supported, which had dominated media coverage of the review, had now abated.
“There’s so much good stuff out there that was being drowned out by this unfortunate debate and myopic focus on equity splits…which has taken an outsized proportion of attention,” Williamson said.
“We needed to put that to bed so we could return the conversation to being a much more productive conversation.”
Fellow co-author and Oxford University Vice Chancellor Professor Irene Tracey, said investor perceptions of the viability of funding university spin-outs had changed following the review.
“That 180 flip started from a negative place because of the commentary…we went from a place of pessimism to ‘my God this is amazing that we’ve managed to do this much this quickly’,” she said. “We know the potential is enormous and we just needed to reframe people’s expectations.”
Williamson and Tracey gave the remarks at an event on Tuesday to mark the anniversary of the publication of the spin-out review. event was put on by TenU, an organisation leading universities’ tech transfer offices which led on the university spin-out guides.
As many as 49 UK universities have now adopted the guidelines for university spin-outs set out in the review. These included the establishment of technology transfer collaborations to ensure academics from smaller universities are supported in commercialising their research, as well as granting a share of equity in spinout businesses which reflects the level of support, capital and key services such as patenting that universities provide, in a bid to assuage investor concerns that universities demanded excessive equity stakes.
The review also called on the government to increase support for proof-of-concept funds to develop confidence in the concept prior to spinning-out, as well as urgent reforms to ensure that UK capital markets can provide the financing to incentivise companies to stay in the UK.
Chancellor Rachel Reeves last month pledged £40m in proof-of-concept funding over the next five years, before promising a major structural overhaul of pension funds to spur more allocation into higher-risk venture investment and UK equities, in signs she has sought to deliver on many of the recommendations outlined in the report.