Spin-Out Companies – A Golden Goose for Universities

Does your university have valuable Intellectual Property sitting on the shelf?

As a university or Research institution, it’s important to reap the benefits of your hard work researching and developing innovative technologies.

And perhaps the most efficient way to do this is by creating a spin-out company.

What is a University Spin-Out?

A University spin-out is a company created to commercialise technology developed by a research institution.

To operate as a spin-out company, the company must license or otherwise obtain the technology or Intellectual Property (IP) from the University.

Spin-out companies offer universities the opportunity to generate steady revenue from inventions that would otherwise have remained unexploited.

What are the Benefits of University Spin-Out Companies?

University spin-out companies have a number of benefits to Universities, including:

A more efficient way to commercialise research:

While Universities exist to advance research, businesses exist to make a profit.

Universities often don’t have the time or business expertise to successfully bring their innovations to market – leaving them severely underutilised.

A spin-out company leaves the task of taking a University’s innovations to market in the hands of business professionals looking to generate revenue and make a profit.

And with the spin-out company in charge of commercialisation, Universities can continue to focus on what they do best – without missing out on profitable opportunities their research creates.

Increased reputation

Universities benefit from their association with successful spin-out companies.

Perhaps the most well-known example is Stanford University in the United States. Stanford’s encouragement of spin-out companies in the 1950s led to the development of “Silicon Valley” – arguably the world’s most recognised innovation and technology hub.

The rise of Silicon Valley helped Stanford transform from a regional university into one of the most prestigious research institutions in the world.

All Universities have the potential to create their own Silicon Valley and enhance their reputation through research commercialisation.

Attracting and retaining top talent

Universities are in the business of attracting the brightest minds – whether as students or researchers (or both).

The chance to maximise the value of their inventions through a spin-out company is a valuable selling point for bringing talented, innovative researchers.

And the proof should be in the pudding. The more Universities succeed in creating spin-outs, the more attractive they’ll look to prospective students and researchers.

Generating additional revenue for the University

Given the technology is already there, the license fees paid by spin-out companies fees amount to a passive income for Universities.

With funding for universities often precarious and unpredictable, revenue generated from spin-out companies can form an important, reliable base for further research.   

Get the Best Deal for Your Technology

The thought of creating a spin-out company can be overwhelming for universities. When it comes to licensing your technology, there are a lot of moving parts that require careful attention before you agree to any deal.

Our expert technology lawyers have in-depth market knowledge of spin-out transactions, so you can rest assured you will make the most out of your technology and IP.

Contact our technology law team today.