Parting with too much equity from day one is a structural and motivational problem. Spinout founders become minority shareholders of their own businesses. This leaves them unable to attract the necessary talent and funding in a globally competitive market. Leading American TTOs, including those at MIT and Stanford University, understand that entrepreneurship is about the long game. Their share of equity rarely surpasses 10 per cent.
We need a radical overhaul of the spinout system. Of 116 venture capital-backed European unicorns, only four according to my research are university spinouts: Collibra, Exscientia, MindMaze, and Oxford Nanopore. This seems counter to the EU’s quest for “digital sovereignty”. A more permissive spinout ecosystem would attract the best entrepreneurial academics, who in turn would attract the brightest students. A recursive cycle of talent, research, teaching, grants, successful spinouts and alumni donations is the path to achieve tech sovereignty.
I usually criticise the university system for holding back on ideas- innovation in teaching, adapting to digital influx, issues related to “research” and a strong emphasis on marketing to create a “flywheel effect” in terms of “publications”. University rankings have no real world appeal – most students landing spots in “ivy league universities” use it for virtue signalling and building networks.
I was reminded of my interview with a potential PhD supervision in North America; I’d rather not get into specifics. She was ready and keen to take me and I popped up the most uncomfortable question- issue around intellectual property. It would remain the property of the University, she said. It’s fine, I agreed but there’s something more. I would be getting the engineering help, getting ideas into motion and figure out implementation methods. Why should the University lay its hands on the commercial spin off? I proposed a simple solution – create a system of bursary wherein I’d transfer my IP to the “pooled commons” and any commercial profits out of the IP can be used to fund my scholarship, my rental accommodation and help other students achieve their goal; especially those without means for achieving the goal for higher studies. It was refused.
It is laudable that Universities are attempting to maximise the impact, but there must be a trickle down benefit – most of the research wouldn’t pass muster real life applications unless there is an active participation of the industry. Likewise, in the healthcare innovation programs. I will explore these ideas at some later date because they require a deep dive.