Adoption of best practices
Over the last 18 months there has been much debate in Government, by public commentators and in the media about the effectiveness of universities in creating spin-outs.
Cambridge has played an important role in this debate. In April 2023 Cambridge Enterprise Chief Executive Dr Diarmuid O’Brien chaired the collective that delivered the University Spin-out Investment Terms (USIT) Guide, a set of recommendations for negotiating investment deals in the innovation sector to accelerate the process of university spin-outs.
The University of Cambridge has a strong entrepreneurial ecosystem attributing 60% of the £29.8bn economic impact from 2020-21 to knowledge transfer activities.
Cambridge’s Intellectual Property (IP) policy states that subject to sponsors rights, the University has the right to file registerable IP created by employees during the research process and rewards IP creators for their assistance in commercialising the IP through a revenue share. The policy also allows for a bespoke negotiation when licensing IP to a spin-out company. This pro-innovation approach takes every situation on its merits and delivers deals on market terms, but it can lead to unnecessary negotiation and protracted times to deal completion.
Through Cambridge Enterprise, the University has always adopted a principled approach to equity negotiations trying to balance the needs of the funders, inventors, the University, founders and the spin-out, while recognising the value it has contributed supporting academic colleagues on their journey to creating a new commercial entity.
Cambridge has now devised a set of optimisations that clarify how Cambridge Enterprise implements the University’s IP policy, identifying clear landing zones (see above) in which the majority of our spin-out licences land. This aligns with best practice as identified by Recommendation 1 of the Independent Review of University Spinouts and the USIT Guide, aiming to simplify negotiations and improve stakeholder trust.
