The UK Government has today, 21 November 2023, published an Independent Review of University Spin-out Companies, with 11 recommendations for the UK to develop a world-leading innovation ecosystem that draws from all academic institutions and disciplines, combining commercial success with broader economic and societal benefits.
The review has undertaken an analysis of the current state of University spin-outs in the UK, as well as taken the opportunity to rebut several myths, for instance on deal terms for UK academics and investors.
The Independent Review has also celebrated highly successful spin-outs, including several clients, and the ecosystems that created them, from experienced and sophisticated University technology transfer offices (TTOs), to University-focused investors and specialist professional advisers.
The most eye-catching recommendations are for:
- Further work to share and implement best practice on spin-out deal terms across Universities, in a way that takes on board the viewpoints of all stakeholders (founders, universities and investors) and which differentiates between sectors and between spin-outs which are more or less IP-intensive (contrasting life sciences, software, hardware and engineering, among others);
- Creating shared TTOs to help build scale and critical mass in the spin-out space for smaller research universities, through collaboration at regional or sector-wide level, and with a particular focus on spin-outs from the social sciences, humanities, and the arts (SHAPE);
- Increased Government funding for proof-of-concept funds, to be used to increase confidence prior to spin-out, and to integrate this with venture-building and support initiatives;
- Strongly emphasising the impact from spin-outs in the guidance and criteria for the Research Excellence Framework 2028, with a focus on social ventures as a form of research impact;
- Consolidating and expanding the existing landscape of support services, to increase access for founders to experienced mentors and advisers;
- Ensuring Universities' relationships with affiliated funds balance access to finance with the need to attract a wider set of investors and to encourage competition when agreeing such deals;
- Transparency and policy work, including a national register of spin-outs, reforms to encourage start-up capital (such as changes to pension regulation) and reforms to increase porosity between academia and industry.
The Independent Review has been carried out over the past nine months, led by Professor Irene Tracey (Vice-Chancellor of the University of Oxford and a member of the Medical Research Council) and Dr Andrew Williamson (Managing Partner of Cambridge Innovation Capital and Chair of the Venture Capital Committee at the British Private Equity and Venture Capital Association).
Overall, this Review is a constructive analysis of the system, and we were pleased to share our experiences of working with and advising academic founders, technology transfer officers, universities and other research institutions, and investors on University spin-outs around the UK and internationally.
We will be working with our clients and contacts to explore the recommendations in more detail – please get in touch if you'd like to join the conversation.