A vote of confidence in our spinout ecosystem
A few days ago, we welcomed the publication of an independent review of university spinout companies commissioned by the UK government and carried out by leading experts in technology transfer.
It was an important moment. The review recognised the strategic role that universities play in producing the innovations in areas such as pharmaceuticals, biotechnology and artificial intelligence needed to grow the economy. It highlighted sector-wide successes such as a fivefold increase in investment in UK university spinouts since 2014, with Imperial among the universities leading the way on best practice. And it made valuable recommendations for creating an even better spinout environment.
To increase the flow of success stories such as cleantech spinout Ceres Power, which has listed the Main Market of the London Stock Exchange, and Alkion Biopharma, acquired by the speciality chemicals giant Evonik Industries, we need to found more spinouts. The review recommended that the government provide more of the proof-of-concept funding required to bring technologies to the stage at which they’re ready to be commercialised. This would help Imperial expand on the successes of our recently established proof-of-concept funds drawn from government and philanthropic funding.
To make the process of forming a spinout quicker and more efficient, the review recommended that universities build on the University Spinout Investment Terms (USIT) Guide, a publication we co-produced as part of the TenU consortium that provides best practice on terms such as equities and royalty payments, helping avoid the need to negotiate these terms separately for each spinout. At Imperial, we recently relaunched our offer for spinout founders to put into action a more standardised approach and we’re working with partners in TenU to produce standard terms specially for software spinouts in line with another of the review’s recommendations.
Once spinouts are formed they need investment. One question that’s received considerable attention in recent years is whether the equity that UK universities take in their spinout companies is a barrier to investment. It was good to see the review settle this debate by confirming that the equity taken in spinouts by Imperial and other leading UK universities is comparable to the most successful US institutions once non-dilute clauses are accounted for. The question we should now be focusing on is how the varying incentives of stakeholders such as universities, founders, and investors can be aligned to create an even higher performing ecosystem.
At Imperial, we are continuing to offer spinouts extensive support and infrastructure to help them to de-risk and to pitch for investment, funded in part by commercial returns from our spinouts. We are also helping them access seed investment from the Imperial College Enterprise Fund, which has been highly successful at helping leverage greater funding from other investors in seed and Series A rounds.
In line with the other recommendations found in the review, we are continuing to develop the extensive support services, entrepreneurship training, shared labs and facilities, and dedicated spaces we offer spinouts.
Our spinout ecosystem is enabled by a brilliant and diverse community of people, who believe in bringing great ideas to life. It’s a combination of academic, researcher and student founders and inventors, our fantastic professional, technical and operational staff, our academic supporters in the form of Enterprise Champions and Deans, our mentors and coaches, investors and corporate customers, patent attorneys and lawyers that makes our ecosystem tick. We would like to share the recognition from the government review with our community and thank you deeply for your continued support.
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