Bristol’s vision for spin out companies
A key pillar of Bristol’s mission is to deliver world-leading research and innovation with local, national and global impact. An essential part of that ambition is boosting the translation of ideas to market so that we can help to make the world a better place by contributing to wealth creation, the economy, and positive societal change.
Spin out companies – new companies set up to develop and commercialise the outputs of university research - are an important mechanism for achieving this goal and contributing to UK government’s ambition to make the UK a science and technology superpower. Bristol is committed to supporting the creation and success of spin out companies.
Spin Out Successes
Bristol has been recognized as one of the top cities in the UK for producing university spinout companies.
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University spin-out Ultraleap raises £60 million in latest funding round
Ultraleap’s hand-tracking and mid-air haptics technologies allow users to touch and manipulate the virtual world.
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Bristol University spin-out launches to advance development of rare disease platform
Scarlet Therapeutics will carry out research into red blood cell-based therapeutics.
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Green robotics start-up signs deal with energy giant
Perceptual Robotics use autonomous drones and artificial intelligence to detect damage in wind turbines early.
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Bristol secures £45M to advance gene therapy treatment of chronic kidney diseases
Purespring Therapeutics aims to address a global unmet need for renal conditions
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An interview with KETS Quantum Security’s Chief Operating Officer - Dr Caroline Clark
After obtaining a PhD in ultrasonic signal processing, Dr. Caroline Clark co-founded the start-up KETS Quantum Security, which builds secure communications systems for quantum computing.
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iCOMAT raises $22.5m to automate advanced composite manufacturing for sustainable transport
iCOMAT, a University of Bristol spin-out and SETsquared Bristol alumnus company, has closed a successful Series A funding round, securing $22.5m (£17.6m) to deliver lighter transport solutions faster and at a lower cost.
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Spin Out Policies
Our spin out deal terms – including University founding equity and intellectual property (IP) licence terms - are designed to promote successful outcomes for spin outs by incentivising founders and attracting investors.
Spin out friendly deal terms
Our terms and practices align with market and sector best practice in the TenU USIT Guide and USIT Software Guide and the recommendations in the Government's independent review of university spin-out companies.
Founding equity
Spin out founding equity (pre-investment) is heavily weighted in favour of the founders. The University will receive some founding equity which recognises the value of University’s support for excellent research and innovation activities that lead to spin out creation.
Founding equity will be split between the University and founders as follows:
|
Spin out type |
Founders |
University |
|
IP intensive |
80 |
20 |
|
IP light (typically based on copyright (including software), designs, specific know how) |
95 |
5 |
|
No IP (typically based on published results and general know-how) |
100 |
0 |
Founders will include all Bristol academic founders and any external management taking equity at the founding stage. The founders themselves will decide how their equity is split between them. However, we can provide guidance as it is useful to consider an appropriate balance between rewarding past activity and incentivising future activity that is attractive to investors.
Intellectual Property Licence Terms
Most spin out companies are based on intellectual property (IP), such as patents and copyright, arising from University research and need a licence from the University to develop and exploit that IP. Our licence terms are ‘back-weighted’ to preserve early cashflow for spin out companies and include royalties at typical market rates to satisfy investors.
Royalties
|
Spin out type |
Royalty rate range |
|
IP intensive |
1-5% |
|
IP light |
0.5-2% |
|
No IP - non-exclusive know-how |
0-1% |
Licence Fees
Licences will not include upfront fees or annual fees during the first few years of spin-out growth. Licences may include success-based milestone payments on market norms for the technology or sector.
Patent Costs
Spin outs must pay ongoing patent costs from the date of the licence. Licences will include additional provision to partially recover historic patent costs over an appropriate period of time for the spin out company (e.g. 2-5yrs) or upon achieving specified investment milestones.
Responsive, timely practices
Starting a spin out company is highly rewarding but we know that it’s also challenging and time-consuming. We want to do our part the make the journey as quick and smooth as it can be. We endeavour to always be responsive to requests and to act in a timely manner. As part of that endeavour we commit to ensuring that spin out legals on first investment are completed within 3 months of receiving first draft.
Revenue Sharing
Our overarching aim for our innovation activities is to maximise research impact. However, the University’s charitable status means we are obliged to receive an appropriate return for commercialising University assets. Some of the returns from successful ventures go to the relevant Schools and some is returned to support future commercialisation activity.
IP licence income (royalties and other licence fees) received by the University is distributed according to our revenue sharing policy. Inventors and other contributors to the IP being licensed will receive their share of that income regardless of whether they hold equity in the spin out company.