Post on 15-Jul-2020
Supporting Spin-outs: Lessons from Oxford and Beyond25 April 2018 Expert Session 2, MITA, Vilnius
Britta C Wyatt Managing Consultant, Oxentia Ltd
© Oxentia 2018 2
Topics
• Introduction to the University of Oxford• History
• Research areas
• The Oxford Ecosystem & support for KEC
• Technology Transfer at Oxford – supporting spinouts (and other innovations!)• Services - What does it do?
• Results – What are the metrics and success rates?
• Structures - How does it deliver the services?
• The Changing Landscape • How the model has evolved in response to recent changes
© Oxentia 2018
About me
Britta C WyattManaging ConsultantOxentia, Ltd
• ICT Strategy, Business Planning, Start-ups & Entrepreneurship, Early Stage Investment, Technology Commercialisation, Innovation Strategy
• MBA from top 10 most entrepreneurial campuses (2004)• Worked for #1 university business incubator in Europe (2010)
Education
Denison University
(US)
University of NH(US)
Fidelity Investments
(US)
Liberty Mutual & LIU
(US)
Experience
NDRC(Ireland)
MBABA
Oxentia(UK)
DevonshireInvestors
(US)
© Oxentia 2018 4© Oxentia 2017
Training & Mentoring Innovation Research & Strategy
Technology Commercialisation
Technology Transfer & KEC Management
Innovation ecosystem reviews Benchmarking studiesProgramme designBusiness planningImpact evaluationsHigher education strategy
IP portfolio reviewsIP policy advice and workshopsProcess and infrastructure adviceEstablishing and supporting TTOsIncubator development and supportPlanning and managing seed funds
Technology transfer workshopsPractical entrepreneurshipManaging innovationInternationalisation and marketingBusiness and entrepreneur mentoring
Marketing and lead generation Finding licensees and sales partnersMarket analysis and commercial strategyValuation and financial modellingPatent Strategy and IP landscapingCreating Spin-outsTechnology scouting and frontier search
‘Working in partnership with our global clients to build capacity, develop capabilityand enable innovation for the benefit of economies and societies.’
Oxentia – Oxford’s Global Innovation ConsultancyOur mission & services
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A very brief introduction…Oxford University Innovation & Oxentia
Formed in 1988, as the Technology Transfer company of the University of Oxford
Established in 2004 to address an increasing interest in technology transfer best practice
Providing Consultancy and Training in Technology commercialisation, knowledge exchange and innovation management throughout the worldWinner of a Queen’s Award for Enterprise –
International Trade 2015
© Oxentia 2018 6© Oxentia 2017
The University of Oxford & OUI
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University of Oxford
• The oldest university in the English-speaking
world (founded c.1188)
• A leader in learning, teaching and research
• 26 British Prime Ministers educated at Oxford
• Royal Society founded from Oxford in 1640
• 51 Nobel prize winners
8© Oxentia 2017
University of Oxford
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Oxford University InnovationKEC Services
Launch innovative ideasLicenses & Spinouts
Start-upsClinical Outcomes Measures
Materials Sales
Invest in new venturesSeed Funds
Crowdfunding (OxReach)Oxford Start-up Incubator
Provide or access consultancyAcademic Consulting (OUC)
“We help Oxford ideas come to life”Oxford University Innovation is a wholly-owned subsidiary of the University of Oxford. We manage the University’s technology transfer and consulting activities and provide
an innovation management service to clients around the world.
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Creating and facilitating impact in society
University entrepreneurial culture Industry, business & the wider world
Commercialising university research and expertise
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KEC process
protect
identify
market
translate license/
spin-out
post deal
Finding it Determining what to do with it Getting the best deal
• Internal marketing
• Ownership• Evaluation
• IP protection strategy
• Proof of Concept• Development• Endorsement
• Overview• Customer targets• Promotion
• Valuation• Negotiation• Legal matters
• Billing• Auditing• Re-negotiation
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Oxford University InnovationDeal Flow & Financial Performance
2016 201516 MONTHS 12 MONTHSAPR 15 - JUL 16 APR 14 - MAR 15
£22.2m £24.6m
£.9.6m £13.6m
14.4m £25m
2873 2490
855 597
418 305
21 5
4 Not reported
Number of University spinouts• #1 UK (2006-2016)Funding raised for spinouts • £52.6m seed funding (2017)• £1.4bn external funding (2011-2017)
Number of PCT applications• #1 EU (university)• #16 worldwide (university)• #4 British (all)
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Oxford University Innovation 18% of Licenses are to Oxford Ventures
http://techtransfercentral.com/reprints/ttt/214-isis-innovation/
Large or corporate34%
Spin-out or start-up from Oxford
18%
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Oxford Spin-outs
• Success rates are 87% after 3 years (vs 54% UK)
• OUI celebrated its 150th spinout this year
• Now averaging 20 spinouts/year (up from 5)
• Over its 30-year lifetime, 1/3 of all OUI spinouts formed in the last 3 years
• Oxford produced nearly half of university spinouts in the UK in 2016
Why? How does it work? (And why the sudden increase?)
© Oxentia 2018 15© Oxentia 2017
What factors influence Oxford’s model & success?
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World Leading Research
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University of OxfordDivisions & Research Theme Examples
Staff• 1,800 academic staff,• 5,400 research and
research support staff,• 5,900 graduate research
students
Research Volume• Largest volume of
world-leading (4*) research in the UK
Research Spend• £612m highest research
spend in the UK (2014)
Headcount: 5,237 Headcount: 1,669Headcount: 2,566 Headcount: 907
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Overview of OUI Activity by Division FY 15/16Spinouts are mainly STEM… but Start-ups are mixed
Start-ups(Incorporated)Licences SpinoutsDisclosures
Material Sale, Option, Agreement
Start-ups(Joined Incubator) Consulting
0
10
20
30
40
50
60
70
80
90
100
No. of Disclosures No. of ProjectsAffiliated with a
Licence
No. of ProjectsAffiliated with
Material Sale, Option,or Assignment Deal
No. of Spin-outs OUC Deals No. of VenturesJoining the ISI
No. of VenturesIncorporated from
the ISI
Per
cen
tage
/ %
UASOtherSocial SciencesHumanitiesMSDMPLS
© Oxentia 2018 19
Team
• 78 Staff• Typically PhDs
• Hub & Spoke Model• High visibility hot desks in
divisions and main buildings• Regular reporting to division
& department heads
• Functions• Licensing & Ventures• Consulting• Investment & New Ventures• Clinical Outcomes• Start-up Incubator• Support teams
© Oxentia 2018 20
Translational Funding Sources
© Oxentia 2018 22
Translational Funding Sources Funding from proof of concept to spinout
Oxford University Challenge Seed Fund• Launched 1999 with £4m (£1m OU)
• Contributors UK Government, Wellcome Trust and Gatsby Foundation
• Over £9m invested in 162 projects
• One of the few UCSF funds still running in its original form
• 42 spinouts created
Oxford Invention Fund• Launched in 2010 with £1.5m
• Donate to support development of new technologies from Oxford
• Donations from University, alumni and Johnson & Johnson
• Over £2.5m invested in 42 projects
• 11 spinouts created
University of Oxford Innovation Fund• EIS/SEIS funds for investors managed by Parkwalk
Advisors
• Funds 1,2 & 3 (£1.25m, £1.75m &£1.4m) fully committed
• Raising £2m for fund 4
Oxford Angels Network • For Business Angels and early-stage VCs
• 270 registered members
• No membership fee
• Quarterly meetings, newsletters
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Networking
Oxford Innovation Society
• Fosters business~university links
• Exclusive access to new technology
Oxford Angels Network
• Receive new investment opportunities
• Attend pitching events
Publications
Printed publications
• Annual Report
• Innovation Insights (3/yr)
• Brochures
Online
• Website with news and content for academics, investors, industry, consultancy clients, media etc.
Social
• Follow oxford-university-innovation
• Follow @OxUInnovation
Networks and MarketingOUI’s commitment to encouraging & seeking engagement
© Oxentia 2018 24© Oxentia 2017
Oxfordshire’s Innovation and Entrepreneurship cluster
Research and Education
Uni of OxfordOxford Brookes
STFC
CompaniesSpinouts
Corporates
Business Support
Startup IncubatorThe Foundry
Oxfordshire LEPOxford
Entrepreneurs
Physical Infrastructure
Milton ParkBegbroke
Science ParkHarwell Science
Park
InvestorsOSIOCP
IP GroupAngel Networks
People & SkillsOUI
OxentiaEntrepreneurs
NED / CEO’s
© Oxentia 2018 25© Oxentia 2017
Does this effect how we build spin-outs?
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Benefit Sharing
• Licenses:• The University’s IP Policy defines how license revenues are shared:• Tiered model
• Spinouts:• Academic Founder & University Shareholding is negotiated case-by-case• 50-50 starting point• Academics agree amongst themselves how they will split their share
• Start-ups:• Incubator receives 10% equity stake • In exchange for funds, mentoring, training, facilities, support
Total net revenue Researchers personally
University General Fund
Department Funds Isis Innovation
To £72K 60% 10% 0% 30%
£72K to £720K 31.5% 21% 17.5% 30%
Over £720K 15.75% 28% 26.25% 30%
© Oxentia 2018 27
Spin-out Process & Decisions
• OAN • OSI, Lab282,
UICF, OIF• Translational Funding
• CEO Network
• Oxford Trademark • Shareholders’
Agreement• Articles &
Memorandum• IP License
• Guidelines & Policies
• University Finance
• OUI Spin-out Board
• IP• Business Case• Tech Status
Academic Decision
to Proceed
Initial Evaluation
& Due Diligence
Obtain Permission
Agree University & Founder
Equity
Legal Documenta
tion & License
Identify Manageme
nt Team
Business Plan & Raise
Investment
Launch!
© Oxentia 2018 28
Spin-out Formation Process
What is the role of the TTO in the spin-out process?
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Spin-out Company Formation ProcessHistorically…
• Preferable to have…• IP (aka patent)• CEO• Investment• Not suitable for licensing?
• TTO will support with…• Initial Evaluation and Due Diligence• Business Planning• Identifying Management• Identifying Investment
• In exchange for…• 50-50 equity share
Spin-Out Guidance for Academics
© Oxentia 2018 30© Oxentia 2017
But things have been changing…
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News in Oxford
© Oxentia 2018 32
© Oxentia 2018 33© Oxentia 2017
3-4x more spin-outs per year
Impact and Industry Driven
Funding
High Profile Support Services
Capital Injection
Impacts on TT Process & Support
• Procedural & Policy Changes• Decision making process• Role of TTO (vs investor)• Equity position• Incubation model
• Culture Changes• Explosion of interest
in spinouts & entrepreneurship
• New types (and sources) of ideas
• Downwards trend in equity shares
© Oxentia 2018 34
Spin-out Company Formation ProcessHistorically…
• Preferable to have…• IP (aka patent)• CEO• Investment• Not suitable for licensing?
• TTO will support with…• Initial Evaluation and Due Diligence• Business Planning• Identifying Management• Identifying Investment
• In exchange for…• 50-50 equity share
Spin-Out Guidance for Academics
© Oxentia 2018 35
Spin-out Company Formation ProcessToday…
• Preferable to have…• IP (aka patent)• CEO• Investment• Not suitable for licensing?• But not required
• TTO (and/or investors) will support with…• Initial Evaluation and Due Diligence• Business Planning• Identifying Management• Identifying Investment• Administration?
• In exchange for…• 50-50 equity share, adjusted to account for
conditions predefined in guidance
Spin-Out Guidance for Academics
© Oxentia 2018 36
Spin-out Process & Decisions
• OAN • OSI, Lab282,
UICF, OIF• Translational Funding
• CEO Network
• Oxford Trademark • Shareholders’
Agreement• Articles &
Memorandum• IP License
• Guidelines & Policies
• University Finance
• OUI Spin-out Board
• IP• Business Case• Tech Status
Academic Decision
to Proceed
Initial Evaluation
& Due Diligence
Obtain Permission
Agree University & Founder
Equity
Legal Documenta
tion & License
Identify Manageme
nt Team
Business Plan & Raise
Investment
Launch!Academic Decision
to Proceed
Initial Evaluation
& Due Diligence
Obtain Permission
Agree University & Founder
Equity
Legal Documenta
tion & License
Identify Manageme
nt Team
Business Plan & Raise
Investment
Launch!
© Oxentia 2018 37
New Funding InstrumentsOxford Sciences Innovation - Oxford’s £600m Spinout Investment Fund
• Oxford Sciences Innovation formed in 2015, initially with £350m
• Investing in spinouts from Oxford (MPLS & Medical Sciences Divisions), Harwell & Culham laboratories
• Additional £230m raised in 2016
• Investing in new and existing spinout companies• working inclusively with other investors• £100k – £10mn investments
• Works in collaboration with others to stimulate and support innovation from Oxford
• EG investing in LAB282, with Evotec, to accelerate drug discovery from Oxford
© Oxentia 2018 39
New Funding InstrumentsLAB282
• How can a drug development company help with translation and biotech spinouts?
• Collaboration between the University, OUI, Evotec and OSI
• Funding to help translate basic research in disease-related biological pathways into focused drug discovery programmes
• £30m fund, £50-£250k awards, with potential follow-on
© Oxentia 2018 40
New Funding InstrumentsImpacts on TT Process & Support?
• Efficiencies & Transparency
• Streamline negotiations (and make more amicable?)• Express License Agreement • Academic Shareholding - Clear & transparent guidelines• More flexibility with the process (CEO, Investment)• Investor (OSI) takes a greater role• Managing and bringing together paries
• Lesson: • Relationship-driven• Support vs equity• Cultural change
Express License Agreement: https://innovation.ox.ac.uk/wp-content/uploads/2014/08/OUI-Spinout-Express-Licence.pdf
Minimise outward cashflow • Initial up-front payment of £50k, paid pro-rata• No minimum sums, no milestones, except small exit fee• Royalty only kicks in for sales over £25m• Royalty matrix based on maturity and margin
© Oxentia 2018 41
New Interest from SSH
© Oxentia 2018 42
New Interest from SSHImpacts on TT Process & Support?
• Exploring New Models• No patent? No problem!• Social Enterprise Models
(for-impact vs for-profit)• Incubation• OxReach Crowd-funding
• Lessons: • Different language, motivations,
and type of impact• Lower returns?• What package of support to
provide? Watch this space!
© Oxentia 2018 45
New Interest in Incubation
• Enterprising Oxford
• Co-workspaces in Oxfordshire
• Oxford Start-up Incubator
• The Foundry
https://www.eship.ox.ac.uk/workspaces-oxfordshire
© Oxentia 2018 46
New Interest in IncubationImpacts on TT Process & Support?
• Oxford Start-up Incubator (managed by OUI)• Assist in the creation and development of non patent
led businesses• Open to researchers, employees, students and alumni• Comprehensive support includes
• commercial advice & mentoring; • workshops and training sessions;• desk space; and• access to business and investment networks
• Lessons• Collaborating (competing?) • Exploring New Models
© Oxentia 2018 47
Changes in the Oxford E&I EcosystemImpact on TT
£££
Culture
Pipeline (volume)
Pipeline (type)
TTO Process & Support
Transparency
Equity/ Benefit Sharing
Level of Support
Efficiencies
Expectations of Returns
Results?
© Oxentia 2018 48
Summary
• Lessons• Emphasis on spinouts as contributing to local economic development• Capital investment (and funding policy) can be a catalyst for culture change• The importance of transparency and relationships• “One size fits all” no longer works• New models are being explored for social enterprise and SSH• Flexibility in equity position in response to external trends
• Questions for the future• Will the initial bump in numbers even out?• Will OUI spin-out success rates be maintained?• What will be the impact on OUI’s “sustainable” revenue model? • (And will there be a change in KPIs?)• How will staff adapt to the growth in interest?
© Oxentia 2018 49
Britta C Wyatt Managing Consultant, Oxentia Ltd
Policy and benchmarking studies
Incubator Support
KEC Partnerships
Translational Funding Impact Reviews
Technology Transfer Training
Innovation Ecosystem Reviews
Technology & Market Due Diligence
Accelerator Programmes
Supporting Innovation & Entrepreneurship Around the World
+44(0)1865 637 272 www.oxentia.com
+44(0)7584 131608 @Oxentia
britta.wyatt@oxentia.com linkedin.com/company/oxentia