The UK government's 'Independent review of university spin-out companies': transforming the UK into a tech and science superpower
23 November 2023 | Applicable law: England and Wales | 2 minute read
The UK government recently published its Independent review of university spin-out companies (the 'Review'), which was led by Professor Irene Tracey CBE, Vice-Chancellor of the University of Oxford and member of the Medical Research Council of UK Research and Innovation, and Doctor Andrew Williamson, Managing Partner of Cambridge Innovation Capital and Chair of the Venture Capital Committee at the BVCA. The Review follows hot on the heels of the 2023 spring budget, which we noted as a demonstration of the government's support for UK tech and life sciences.
Excitingly, the Review makes 11 recommendations, all of which have been accepted, and will be implemented, by the government in a clear effort to transform the UK into a tech and science superpower.
We set out what we think will be the most impactful recommendations:
- ongoing changes to pensions regulation and reforms to UK capital markets to incentivise companies to stay in the UK, rather than exiting elsewhere;
- accelerate towards ecosystem standardisation with spinout term sheets and innovation-friendly university policies underpinned by guidance from investors, founders and universities, with specific guidance for software spinouts and hardware and engineering spinouts. These will provide much welcome starting points, e.g. in relation to university equity, to streamline negotiations and standardise the spinout process;
- increasing access for founders to support and mentorship from individuals and organisations with experience of operating successful startups, with particular focus on negotiations with universities and investors, training on entrepreneurship and commercialisation, early stage fractional or on-call professional support in law, finance or operations, and access to equipment and facilities;
- create shared technology transfer offices to help build scale and critical mass in the spinout space for smaller research universities;
- increased government funding for proof-of-concept funds to develop confidence in the idea prior to spinning out of the university; and
- increased funds to enable better movement between academia and industry, including through funds that 'buy out' academic time and an 'academic returner' fellowship.
The Review lands against a backdrop of increasing calls for transparency and standardisation across the spinout ecosystem and we think that these recommendations are key in accelerating not just university spinouts but the UK's reputation as a key global tech and life sciences player that rivals key markets in the US.
We are excited to see how these recommendations will impact our clients and look forward to the positive changes they will bring to the ecosystem.
Please get in touch if you would like to discuss how these recommendations might impact you.