After a year since the government-commissioned review on university spin-outs, concerns around equity splits have been addressed.
- Professor Irene Tracey highlighted a significant shift in investor attitudes towards spin-out funding, suggesting a dramatic improvement.
- Co-author Dr Andrew Williamson emphasised the previous misplacement of focus on equity demands, overshadowing broader positive aspects.
- A total of 49 UK universities are now aligning with the review guidelines, enhancing technology transfer and support for smaller institutions.
- The government’s financial commitments demonstrate actions towards the review’s recommendations, aiming to improve venture investments.
Since the publication of the government-commissioned review on university spin-outs, the once contentious issue of equity splits has markedly diminished in focus. Dr Andrew Williamson, Managing Partner at Cambridge Innovation Capital and one of the review’s authors, noted the undue attention this issue received, which overshadowed beneficial aspects of the spin-out ecosystem. He stated, “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.” Professor Irene Tracey from Oxford University echoed these sentiments, acknowledging a shift in investor perspectives, with previous pessimistic views now transformed into recognition of substantial progress made quickly.
The discourse at an event marking the review’s anniversary revealed that 49 UK universities have adopted the review’s guidelines. These guidelines aim to foster collaborations in technology transfer, particularly benefitting academics from smaller institutions, by ensuring they have the support necessary for commercialising their research. This includes allocating a share of equity in spin-outs reflecting the level of university-provided support, addressing investor concerns over excessive equity demands.
Further, the review urged the government to bolster support for proof-of-concept funds, a call that Chancellor Rachel Reeves has begun to address. Recently, Reeves pledged £40 million over the next five years towards these funds. Alongside this, proposed reforms in pension fund structures aim to increase allocations to higher-risk ventures and UK equities, symbolising a commitment to many of the review’s recommendations. The comprehensive approach demonstrates a calculated effort to retain and enhance the attractiveness of UK spin-outs within the global market.
The resolution of equity split concerns marks a pivotal turnaround in the landscape of university spin-out investments in the UK.
