Beyond the Breakthrough with Thierry Heles

Season 4 Recap: Building blocks in place for university venturing to take off in 2025

Is 2025 the year that university technology transfer will see a big boost? It certainly looks promising, particularly in the UK, where a government-led spinout review has encouraged universities to lower equity in spinouts to 25%. [https://globalventuring.com/university/podcast-uk-spinout-review-settles-myopic-equity-debate/] Most universities in the UK have adopted the guidelines. The debate over equity stakes is a discussion that Michele Barbour, associate pro vice-chancellor for enterprise and innovation at the University of Bristol, says she actually welcomed because it gave tech transfer a visibility that had so far lacked [https://globalventuring.com/university/more-spinouts-more-quickly-standard-deal-terms-willingness-fail/]. UK academic institutions will also have access to a £40m ($50m) pot for proof-of-concept funding. Although that is very little by international standards [https://globalventuring.com/university/podcast/podcast-proof-of-concept-funding-impactful-spinouts/], it could still lead to as many as 80 new spinouts that wouldn’t have happened otherwise. In Asia, Japan has demonstrated its ability to build a formidable ecosystem of university venture funds [https://globalventuring.com/university/podcast-asia-behind-other-regions-university-venture-funds/] — some of which rival even the size of Oxford Science Enterprises, the world’s biggest such investment company in spinouts. And in the US, the University of Kentucky’s Estate Whiskey Alliance is a unique new partnership [https://globalventuring.com/university/podcast-kentucky-university-estate-whiskey-alliance/] that focuses on an industry not traditionally associated with commercialisation but that stands to benefit from research into sustainable agriculture, waste management and tree harvesting. Here is a look at the highlights of the last season of the Beyond the Breakthrough podcast. This is Thierry Heles’ farewell episode of the Beyond the Breakthrough podcast. Get in touch Follow Thierry Heles on LinkedIn. [https://www.linkedin.com/in/thierryheles/]

Create more spinouts, more quickly with standard deal terms and willingness to fail

To date, 49 universities in the UK have adopted a recommendation [https://globalventuring.com/university/most-top-uk-universities-adopt-lower-spinout-equity/] to take between 10% and 25% equity in their life science spinouts. The recommendation was inspired by the USIT Guide, published last year by tech transfer group TenU, making it the guide’s arguably biggest impact yet. But it’s just the start. The University of Southampton has used the USIT Guide to develop a Deal Readiness Toolkit. It’s an effort to standardise and harmonise spinout deal negotiations, with templates, checklists, and advice on process improvement, says Diana Galpin, director of enterprise and knowledge exchange at the institution. Ross McNaughton, a partner at law firm Taylor Wessing, welcomes the approach and says he’s keen to see a UK version of US-BOLT, a template term sheet for life science spinouts [https://autm.net/AUTM/media/Surveys-Tools/TTO-and-VC-Early-Stage-Life-Science-Term-Sheet-(11-19-22-launch).pdf] developed by a group of universities, VC firms and law firms in 2020. For Michelle Barbour, associate vice-chancellor for enterprise and innovation at the University of Bristol [https://globalventuring.com/university/bristol-a-cluster-on-the-rise/], the USIT Guide and the discussion about equity stakes has been an opportunity to educate professors for whom a spinout had previously never been on the cards but who were now interested to learn more. And Owen Metters, an investment manager focused on deep tech at Octopus Ventures, argues universities should use their newly found confidence in negotiations to follow venture capital’s power law and spin out more companies more quickly — acknowledging that most will fail but the winners will deliver outsized returns. Diarmuid O’Brien, the pro-vice-chancellor for innovation at the University of Cambridge, leads the panel discussion, recorded at the TenU [https://ten-u.org/] summit at the Tate Modern in London last month. Get in touch Follow Thierry Heles on LinkedIn. [https://www.linkedin.com/in/thierryheles/]

More proof of concept funding is needed to create impactful spinouts

The UK government has committed £40m ($50m) to proof of concept funding over the next five years. How should the money available be deployed? One idea — inspired by the Flemish approach — is to set up investment committees of industry, VC and university experts to allocate the money. But is it enough money? Andrew Williamson, managing partner of venture fund Cambridge Innovation Capital, says he was delighted by the announcement because he was told by the government initially that there was no money at all, and then that they would provide £20m over three years. The commitment remains small by international standards. Paul Van Dun, general manager of KU Leuven Research and Development, says the five universities in Belgium’s Flanders region have access to five times as much money. Anne Lane, chief executive of UCL Business, the tech transfer arm of University College London, was able to build an internal pot of £7.5m thanks to a successful spinout exit but the university still needs more money to fund every opportunity. Andrea Taylor, chief executive of Edinburgh Innovations at the University of Edinburgh, says it is even harder in Scotland, where the government’s formula isn’t as generous when it comes to higher education innovation funding. For Russell Schofield-Bezer, chief executive of consultancy RSB Advisory, proof of concept funding ought to be part of the country’s industrial strategy: if the UK wants more quality spinouts, it has to put money into the proof of concept stage necessary to create commercially viable businesses. This podcast was recorded at the TenU [https://ten-u.org/] summit at the Tate Modern in London last week. Get in touch Follow Thierry Heles on LinkedIn. [https://www.linkedin.com/in/thierryheles/]

How the UK’s spinout review settled “myopic” equity debate

A year ago, Irene Tracey, vice-chancellor of the University of Oxford, and Andrew Williamson, managing partner of venture capital firm Cambridge Innovation Capital, published their UK government-sponsored report into the spinout ecosystem with a list of 11 recommendations [https://assets.publishing.service.gov.uk/media/6549fcb23ff5770013a88131/independent_review_of_university_spin-out_companies.pdf] on how to uplift the sector. Among these points was a call to adopt the USIT Guide, a template for term sheet negotiations that asks universities to take a stake of between 10% and 25% in life science and physical science spinouts. Today this has been adopted by 49 institutions throughout the country. [https://globalventuring.com/university/most-top-uk-universities-adopt-lower-spinout-equity/] Williamson says he’s glad the “myopic” focus on equity stakes has been put to rest and the conversation can shift to the great work that is being done at universities. One of the ways that work will be highlighted is with a database of all spinouts from UK universities, due to be released in spring 2025, thanks to the support of Research England, whose chair Jessica Corner leads the fireside chat in this episode of the Beyond the Breakthrough podcast. But what more could, or should, be done? Research England has also committed capital to a series of pilot projects for joint tech transfer offices — such as one led by the University of the Arts London focused on social sciences and humanities [https://globalventuring.com/university/university-of-arts-london-joint-tech-transfer-social-sciences-spinouts/] — and the review led to the creation of a £40m ($50m) pot for proof-of-concept funding. This fireside chat was recorded at the TenU Innovation Summit [https://ten-u.org/] at the Tate Modern art gallery in London earlier this week. Get in touch Follow Thierry Heles on LinkedIn. [https://www.linkedin.com/in/thierryheles/]

Landon Borders, Alexa Narel: How the University of Kentucky makes whisky more sustainable

Whisky may not be the first industry to come to mind when you think of university innovation, but for the University of Kentucky — based in a US state known around the world for its bourbon industry — it’s an obvious next step in its tech transfer activities. UK Innovate, the institution’s commercialisation arm, is spearheading a new organisation called Estate Whiskey Alliance [https://estatewhiskey.org/] (EWA) that will allow members to access and help guide research in areas such as sustainable whisky production and regenerative farming. Run by director Landon Borders and operations manager Alexa Narel, the alliance builds on the university’s expertise through its James B. Beam Institute for Kentucky [https://beaminstitute.ca.uky.edu/]Spirits [https://beaminstitute.ca.uky.edu/https://beaminstitute.ca.uky.edu/]. But it’s not just for Kentucky: there’s already one co-founder from Canada (spirit producer Black Fox Farm and Distillery), and Estate Whiskey Alliance plans to expand into other whisky-producing nations such as Scotland and Japan. There will be a highly visible benefit for consumers, too: the Estate Whiskey Alliance will authenticate and certify whisky made to strict, high standards — from milling to fermentation to barreling and ageing, everything has to occur on the distillery’s estate, and at least two-thirds of the mash bill grains have to be grown on estate-controlled land. GET IN TOUCH Follow Thierry Heles on LinkedIn [https://www.linkedin.com/in/thierryheles/]