TenU: University Equity Stakes in Spin-Outs – A Quick Start Guide

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How much equity should a university receive from spin-outs? Indeed, why does it appear that university equity varies so widely, ranging between 5 and 50 per cent or more? Why can’t all universities receive just 5 per cent of equity all of the time?

In light of these recurrent questions, TenU has designed this quick start guide, outlining the main reasons why there is no one-size-fits-all approach to sharing equity from a university’s perspective, and why in fact most of the approaches taken are often more equivalent than they would appear. The guide illustrates the complexity inherent in allocating equity in an easy and comprehensible way.

“The guide is an international effort across all of our members that supports the view that, while there is no one-size-fits-all to sharing equity, there are some common themes in international university tech transfer. It is with this understanding that, last year, university tech transfer offices in the US joined efforts with the largest venture capital firms to discuss challenges that both parties routinely face when working together on life science deals. These discussions resulted in a set of effective practices, including recommendations for improving the negotiation process and for structuring term sheets, meant to benefit universities and venture capital firms more broadly. Crucially, these recommendations demonstrate that most of the approaches taken in sharing equity are often more equivalent than they would appear and acceptable to both parties.”

About TenU

TenU is an international collaboration formed to capture effective practices in research commercialisation and share these with UK and US governments and higher education communities, in order to increase the societal impact of research.

TenU members are the technology transfer offices of the University of Cambridge, Columbia University, University of Edinburgh, Imperial College London, KU Leuven, University of Manchester, MIT, University of Oxford, Stanford University, and UCL.”

Read more or download report (PDF)