members of TenU's USIT Guide working group sit on stage, from left to right: Andy Neely, Maina Bhaman, Orin Herskowitz, Jim Wilkinson, Karin Immergluck, George Baxter and Anne Lane

Earlier this year, TenU — an international collaboration between 10 tech transfer offices in the US and Europe developing best practices — launched the University Spinout Investment Terms (USIT) Guide. Developed together with law firms and VC firms throughout the UK, the USIT Guide aims to accelerate negotiations between universities and investors and solve some of the common sticking points in these discussions.

To discuss the origins and ambitions of the USIT Guide, members of TenU — Orin Herskowitz, Anne Lane, George Baxter, Jim Wilkinson, Karin Immergluck — together with Sofinnova Partners’s Maina Bhaman and TenU chairman Andy Neely came together in front of a live audience at London’s County Hall last month.

This is the exclusive, full recording of this discussion, including audience questions.


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Please note, the end credits have been omitted.

Ananay Aguilar: Good evening. It is a real pleasure to welcome you to this celebration of cross-sector collaboration today. I’m glad to see so many of you here. I know that many of you have come from far and wide to be with us, so thank you. I am Ananay Aguilar, the head of TenU. TenU is an international collaboration of ten leading technology transfer offices. Our mission is to capture best practice in research commercialisation and share it with governments, higher education communities, investors and industry. Today, we have the rare privilege of having all of the TenU members in the room. Four of them are on the panel. They are Maina Bhaman from Sofinnova Partners, Orin Herskowitz from Columbia University, Jim Wilkinson from Oxford Science Enterprises, Karin Immergluck from Stanford, George Baxter from Edinburgh and Anne Lane from UCLB.

Before I introduce you to our distinguished chair, I’d like to ask for a show of hands. How many of you have had a chance to familiarise yourselves, even if superficially, with the USIT Guide? Wow, great.

How many have engaged with the US term sheet, now called US-BOLT? Amazing, a few of you.

Either way, I can promise you that there’s something for you all. For those who are engaging with these initiatives for the first time and even for those of you who have contributed to their creation, you will learn about their origins and what it means for the sector. In a nutshell, these initiatives offer recommendations for negotiating investment deals for spinouts. They were born out of a collaboration between prominent venture capital investors and leading universities in their respective countries.

The objectives are threefold: to facilitate faster negotiations, to identify a landing zone for what a positive deal should look like and to demonstrate the shared commitment between the technology transfer and venture capital communities to work together to build businesses that can change the world.

These initiatives are also a springboard to greater things. They epitomise what is possible when different communities work together to reach a shared vision. The USIT Guide, sorely needed in the UK, if judged by the enthusiasm with which it has been received, was inspired by our members in the US. I watched with great interest, as I’m sure many of you did too, the various public sessions Orin led on the US recommendations. It occurred to us that we should try this in the UK. So I asked Orin if he would support this by providing guidance and reassurance to UK roundtable participants, and he said yes.

And so here we are, 18 months later, having built and launched the USIT Guide, sitting down for the first time to contrast and compare our different experiences and to look back on all the key moments that shaped these initiatives. Today, with the guidance from Andy Neely, you learn more about this journey, its value and its effects from contributors on both sides of the Atlantic.

So now let me take a moment to introduce Andy Neely, our esteemed chair for this evening. Many of you are familiar with his role as the senior pro-vice chancellor of enterprise and business relations at the University of Cambridge, as well as with his distinguished position as professor of manufacturing. But what you may not know is that Andy also serves as the chair of TenU and that throughout his illustrious career, he has also been an academic founder of the data evaluation specialist firm Anmut. As both an academic founder and a university leader, he’s there for the embodiment of someone who can truly leverage these recommendations. And I have no doubt that as a professor, he will keep us on our toes with thought-provoking questions throughout this session.

So with no further ado, let’s welcome Andy and our panel.

Andy Neely: Well, thank you. It’s great to be here. It’s always slightly dangerous when people applaud at the start of a session. That’s slightly worrying. But anyway, so what I thought we’d do is I’ll ask a few questions of the panel. It’s great that everyone’s joining us on this particular session. Ask a few questions to the panel, but then make sure we’ve got some time as well for people in the audience. If you’ve got questions you’d like to ask of panel members about the work they’ve done, feel free to do that. We’ll come to that in due course. I thought we’d start, though, just with slightly more detailed introductions, and what I was going to ask each of the members of the panel to do, we’ll start with you, if I might, Anne, is talk a little bit about your role, but also a bit about your background, why you ended up where you are, not just sitting on this particular panel, but how you ended up in this particular role. So, Anne, if you want to go first.

Anne Lane: Thanks, Andy. I had an interesting introduction, actually, into tech transfer. So I was a researcher. I had a PhD in medicine from UCL a long time ago. And then I went and did a postdoc at Harvard Medical School where I worked for an Icelandic PI who was setting up Decode Genetics. And that was my first introduction, really, to tech transfer. But the university hadn’t put an agreement in place with him or decided what equity stake they would take, but had carried on funding his research. He could do that. He left to go to Iceland without having signed anything. And our labs were locked down. And so I didn’t have a visa. And that’s really how I ended up in Montreal, working for a spinout company there because there was a job opportunity and I didn’t have a research project anymore. So that’s my background. And I did an MBA in Canada while I was working.

And then I saw the job advertised. In fact, one of my colleagues saw the job advertised at UCL and pointed it out to me. And I still wonder why they thought I should leave and go to UCL, but… And that was in what was then UCL Ventures. And it looked like a really interesting opportunity to use my science but without actually having to do the science myself, because there were people who were much better at it than I was. And that’s really how I got into the role I’m in. So I’ve been there since 2000. We are now a wholly-owned subsidiary of UCL and we deal with faculty IP. So we set up spinouts, we do licensing and we also look at social ventures.

Andy Neely: Great, thank you. George?

George Baxter: Hi, George Baxter from Edinburgh. So like most of us, I probably got into this by accident. My PhD is organic chemistry, but I ended up spending 15 years in the private sector running businesses for ICI, for those of us who remember ICI and AstraZeneca, and then spent nine years working on economic development for the UK government. And then purely by accident, I got into the academic field by being headhunted to be professor of innovation at a university, which I’d never even thought about. Did that for six months until everybody seemed to resign — not because I’d arrived, but… and the vice chancellor asked me to fill in for the PVC and the director of research and enterprise. And I thought, well, that seems like a bit of a laugh, I’ll do that. Decided that was more fun than being a professor of innovation. Did that for a while, then moved to Nottingham University and then got a call from a headhunter saying, would you like to move to Edinburgh? And although it’s the wrong side of Scotland for me, it looked like a good job. And I’ve been there for nearly seven years now.

We are 167 people as of this week at Edinburgh. So our scope is quite broad. Business engagement, all the classic tech transfer stuff, venture capital. We have our own funds, student enterprise as well, and consultancy. So that’s it really. So quite a large team, been growing rapidly. It was 55 when I arrived six and a half years ago. So we’ve added over 100 people. We’ve managed to grow and get the full support from the university. So it’s been a really wonderful time.

Andy Neely: Great, thank you. Karin?

Karin Immergluck: Karin from Stanford. My path to tech transfer was actually pretty linear, pretty straightforward. I was doing my PhD work at University of California, San Francisco. And realised I was always more interested in everyone else’s projects except for mine. I was trying to be a jack of all trades, a master of none, essentially. And my boss at some point, who was a Nobel laureate, told the whole lab, you know, if you’re not thinking of science while you’re showering, you probably shouldn’t continue on in academia. And so I was standing in the shower one day thinking, “nope”.

So I finished my PhD, but I had already started looking at alternative careers when I was getting towards the end of it. And my PI was very supportive. And, you know, basically I found out about tech transfer, learned about it through, you know, informational interviews, reading up, and found out that they offered internships at UCSF. So that’s where I got my tech transfer start. And that was 2000 as well. Then I worked there for too long, and then got the job at Stanford five years ago. Very exciting place to be.

And in terms of role, I would say that my role at Stanford is a little different than most roles here in the UK. Our office, we have about 55 people in our office now. So we have two branches. We have industrial contracting, which is all of the industry-sponsored research. And then the whole licensing staff. But also we have a newly launched high-impact technology fund, which is a proof-of-concept fund meant to kind of fill in the spaces that aren’t currently being filled by other translational proof-of-concept programmes at Stanford. And I say that because the ecosystem at Stanford has been developing for, really, for 70 years. And so we have many different translational programmes, particularly in the life sciences, a couple in the physical sciences, an innovative medicines accelerator. We have a new School of Sustainability with a sustainability accelerator. It’s all very new.

But we have all of these programmes. We’ve got tons of entrepreneurship programmes, courses, clubs, for all different demographics within the Stanford community. So our HIT Fund — we call it the HIT Fund, high-impact technology — was really meant to kind of plug the gaps. So address, mainly in physical sciences, the projects that we were seeing that we felt had promise, but we couldn’t attract investment yet.

Andy Neely: Great, thank you. Jim?

Jim Wilkinson: Thanks. Quite honestly, I have no idea why I’m here. I can explain how I got here, which is a finance person by background. And I was part of a small management team that built two big multinationals, one in business media, one in online gambling, not associated with each other. Did a bit of time in industrial laundry, and then a couple of years in an African conglomerate. And then just as I was coming to the end of that, my chairman at the time said, I’ve met this bloke, Dave Norwood. Go and have a chat with him down the pub. And then the next thing I knew, I was the CFO of OSI, as we were then, just as we were starting out. And that was eight years ago. I think over the last eight years, we’ve had a pretty spectacular ride. So I think we started off with nothing. We’re worth about $1.3bn now. We’ve more importantly spun out about 80 companies. We’ve got 22 of them that are series B and beyond that look like very interesting companies. There’s still a long way to go.

I think part of the things we’ve tried to do as we’ve gone along is build an ecosystem in Oxford that should just carry on growing and become a virtuous circle. Modelled a lot, it must be said, on something like Boston. Can we get to that stage? I find it a very fulfilling and interesting role, particularly when you see the quality of the IP that’s around and just how it can improve people’s lives. We can actually get it out into the world. And obviously, the challenges are a myriad, I think, as we’re all facing. But I think we are winning.

Andy Neely: Great, thank you. Orin?

Orin Herskowitz: Hi, Orin Herskowitz from Columbia. So actually, I think I can out-random all of you guys. So I’m an English major. I have no science background and no law background. I was a management consultant at the Boston Consulting Group and had been just doing general operational strategy stuff. One of my projects was for Mayor Bloomberg when Michael Bloomberg was the mayor of New York. And the question that was posed to us was, what would New York have to do to catch up to Boston as a life science hub? I’d never heard of tech transfer. I’d never seen a patent. I’d never been involved in a licence agreement. But it was a fascinating project because so much of the promise of what New York could be in all of these fields started with all of the amazing intellectual capital being generated by the research institutions. And if we could just unlock that value somehow, what a transformational change it would be. And then we finished the case. And like a good consultant, I completely forgot about everything having to do with that and moved on to the next project. And then my office mate was recruited by Spencer Stewart for this job at Columbia. And he was like, “I’m not interested, hold the phone” and literally transferred the phone to me. And I end up taking the job. I thought I’d be there for a year or two. It’s been 17.

And our role at CTV to touch on what we do, it is the traditional tech transfer stuff. So inventions, patents, marketing, licensing, startups. But that actually takes a fairly small percentage of my time at this point. We’ve taken on all sorts of roles at the institution and also in the city, state, and federal government on things relating to startups, innovation policy, workforce development, economic development through tech transfer and things like that.

Andy Neely: Great, thank you. Maina?

Maina Bhaman: Hi, everybody. I’m Maina Bhaman. I’m a partner at Sofinnova Partners, which is a venture capital fund, one of the oldest and largest in Europe. I came to this slightly circuitously. I started out in biotech and worked for a number of different biotechs, moving from one to the other. First in the US and then moved to Europe, moved to a company in Oxford for the Oxford GlycoSciences, which then got bought by another biotech company. And that’s when I started the process of thinking about what I wanted to do next. Went to business school at Imperial and then moved to Imperial Innovations, as it then was, which was at the time a tech transfer office, but with the ambition to grow into a venture capital fund. And that’s what we did. So I joined them with no experience in venture capital, but a lot of experience in biotech and basically learned on the job, worked with colleagues and understood the venture capital business, and have now been doing that for quite a long time.

I moved five years ago now from Imperial Innovations, later then called Touchstone Innovations, after having built up quite a substantial life sciences portfolio and making our name known as one of the early stage venture capital organisations to Sofinnova Partners as a partner.

Andy Neely: Great, thank you. I think it’s always fascinating to hear people’s background stories of how they got to where they are and the number of times that I hear a sort of random walk story is surprising always in these discussions. But background and history matters. So Orin, let’s go back to the original work you did on US-BOLT. Why was that started? What was it like as a process?

Orin Herskowitz: It was a fascinating way this developed. But I think a lot of us in the US observed — so Lesley Millar-Nicholson is in the back from MIT, wave your hand just so we can find her later — and Karin and I, at institutions sort of at scale in the US, we’ve gone from doing five or six tech transfer sort of research-based startups a year in 2008 to 25 to 30 a year now. And I think that same sort of scale, like roughly 20 to 30 or 40 startups, is pretty common among a very small set of US institutions. And we tend to do those deals with some of the world’s largest venture firms with whom we’ve become friends. And yet, when we entered the room to negotiate these deals, it was like we completely forgot we knew each other and got vicious.

And everyone… we all knew how the deal would end. Like we’d all seen them. It’s like you see a movie over and over, and yet pretend each time at the beginning, I’m going to forget how the movie ends. So we would start high, and they would start low. And we’d kind of yell at each other. We’d talk about fairness and when things weren’t fair. And we’d talk about equality when things weren’t equal. And we’d all throw principles around. And everything took far too long. It was far too contentious and always ended up roughly at the same terms that we could have predicted from the very beginning. Like maybe we’d move an iota this way or an iota that way. And then we’d shake hands, and we’d be friends again. And we’d have drinks until the next deal came along, and then we’d rinse and repeat.

And that seemed like a colossal waste of time, not only for us, because frankly, that’s kind of what we’re getting paid to do. But more importantly, if you have a new drug that are life-saving — rare things — but if you end up with a life-saving innovation, I think for here, like the Oxford AstraZeneca vaccine, and if you take an extra six months to negotiate a licence to that agreement, you can count how many people are dying because of the time you’ve wasted. This is not an abstract game.

And that’s with us, who actually know — or Stanford, or MIT — who actually know how to get these deals done. And with VCs like Sofinnova, that know how to get deals done. So when you think about the institutions in America, or the VCs there, that don’t have that kind of scale, who are concerned that they’re getting taken advantage of, or think every term in the licence agreement is crazy, it could take six months, nine months, 12, 18 months to negotiate a license agreement, because people just didn’t know any better. So the idea was to gather some of the university friends, and also some VC friends, and see if we couldn’t spoil the movie for everyone. And so that’s what we did.

Help me out. I’m going to get the… from the universities, it was Columbia, Stanford, MIT, Yale, Penn, Johns Hopkins, Duke, and eventually UMichigan and Harvard. And then the VCs were Atlas, 5AM, Venrock, Polaris…

Karin Immergluck: RA.

Orin Herskowitz: RA Capital, and OUP. And we figured that was representative enough. And so we spent probably took us two years?

Karin Immergluck: To get to the final term sheet, yeah.

Orin Herskowitz: To get to the final term sheet. So it took about two years to get this done. And then… so the first thing we did was a process recommendation of guidelines for how to negotiate the deals. Then we put out a term sheet, although it was not nearly as bold as what you guys have done here with USIT. So hats off, because I think the UK took us way further than we did in the US. And we are close to releasing a fully negotiated license agreement, so all the legal language to be able to download it and start it. So that’s the history.

Andy Neely: Fantastic, thank you. So I mean, a lot of that’s about building trust between different groups of people. And your description of friends, but then you get into the negotiation, suddenly you forget about the friendship, you’re in the negotiation, and then you can be friends again at the end. The underlying trust between those groups is really important. And I guess that’s what the roundtable in the UK was trying to build as well. So let’s get some reflections on process of building USIT Guide. George, do you want to start on that one?

George Baxter: Yeah. I mean, it was pretty important to get those people in. I mean, what we recognised was that if you set it from the university side of the table, and then the venture capital, if you want to polarise it like that, it’s not quite as polarised as that. But it was very easy for people to take shots at each other. You’re sitting there, and we hear all the time, oh, universities are taking 40%, 50% equity. And we’re all complaining about venture capital being taken too long and all that type of stuff. We’re actually both in the same business. We both, as Orin said, we want this to be successful. So it was really important to get those people together and make sure that, first of all, work out why we’re doing it. Really important question. And we’ve been talking to this today as well as a group of TenU people. Why do we do what we do as a university? And when I sat down with my vice chancellor and principal, Peter, and he says to me, we do this because we want to make the world a better place, which is a huge cliche. But we don’t do this because you’re trying to scrape every last pound out of a deal. And he said, I’ll be really annoyed with you if you ever stop something happening. So I think the process is really important that we were inclusive and actually open as possible. That we all went into it with a genuinely open mind to say, we want to get the best at this. We want some user deals.

And I’ll give you an example. I think it shows how relatively successful it will be and it is being. I had to give a talk at Helsinki University a few weeks ago. And when I was sitting at lunch with the senior team there, the head of the tech transfer office came along with a printed-out copy of the USIT guide and said, this is brilliant. We’re using this now. Someone’s doing a how-to guide. So I think that says it worked OK.

Andy Neely: Anne, how about for you? What was it like as a process?

Anne Lane: It was an interesting process. And I think we were all quite apprehensive at the beginning of it, I think on both sides. But I think the really key point for me was the fact that it wasn’t just for universities. Because I think that’s something that people really shouldn’t think it’s just for universities. It’s for investors as well. Because there’s a lot of investors who haven’t worked with universities very much. It’s not easy working with a university. But equally, sometimes it’s not easy working with an investor. And I think that was something that we really found to be helpful.

And I think I’ve heard from smaller investors that the guide’s been useful too. And they’ve understood some of the reasons why they’ve had interactions with universities that they’ve had. That they didn’t really know what the priorities of the university were and why they couldn’t agree to certain terms and certain things. And so I think it’s helped to clarify a lot of that. And it’s made a lot of those negotiations much smoother and much more constructive.

And you’ve got to work together afterwards, after the deal’s done. So anything you can do to make that process easier and less confrontational is always a good thing.

Andy Neely: Maina, from an investor perspective?

Maina Bhaman: The main objective for us was to get an understanding on both sides so that you make this process simple. When you take away the exact deal that you’re working on, the emotion can be taken out of the whole process. I think that’s what we did here. It wasn’t easy. There’s… we had our moments of, no, this is not how we do things. This is not. You were able to do that because you weren’t working on a particular deal. It wasn’t about one university or one investor. It was about how do we reduce that time that you take to negotiate deals in the future? And I think that was the objective. And I think, hopefully, we’ve achieved that objective.

You know, I spent all of my life doing negotiations with different universities across the globe. And frankly, even when I was in the same organisation between our tech transfer office and the venture capital organisation, we used to spend an enormous amount of time doing this. So I think the objectives were clear. And I think what we’ve achieved, hopefully, will really make an impact.

Andy Neely: Let’s just unpack the, ’cause it’s easy when you’re sitting here with a nice, polished version of the guide that everybody signed up to. You hinted that there was some sticky moments. So what was the… give us an example of a sticky moment. And I’m gonna come to you, Jim, for your memory there. But Maina, let’s start with you. What was your…

Maina Bhaman: I think the stickiest moment, so when we decided we wanted to put some numbers into the guide, and clearly we had very different views of numbers, as is obvious. But it was clear that, you know, despite the fact that there are numbers out there, and we all know what the numbers should end up looking like, those were some very interesting discussions. I think what we got to was a really good compromise, where we could agree on certain ranges for certain things.

But look, the reality is every deal is a little bit different. As long as you don’t have to recreate from first principles in every deal, hopefully you get there much faster.

Andy Neely: Jim, how about for you? What were the moments where you thought, oh, this is going in the wrong direction?

Jim Wilkinson: The first moment was the first time I attended my first meeting, and saw how many people were gonna be taking part in this, and I just thought, this is never gonna work. But I have to say that the two reasons it did, I think Ananay was brilliant, and having a dedicated resource to keep driving us along was brilliant. And I think Diarmuid’s chairmanship was just unbelievable. And actually what it did, it set up quite an open collaborative sort of feeling. So I think everyone felt it was a fairly safe space.

And there was an end objective of trying to get things done. So around about licence terms and equity splits, and things that should have been a lot more contentious and detailed, made you to thought at the start. Actually, we pretty quickly got to the point that we recognised everyone was starting off in different positions, with different structures, different ecosystems, different challenges, that we could never take everything into account.

So coming up with a sort of safe landing space was actually relatively straightforward from that viewpoint. So my memory actually was that there weren’t really any sticking points. It was just really easy. And I’d recommend you all just have a go at it yourselves.

Audience member: Fancy a new take?

It helped it was on Zoom.

Andy Neely: I won’t keep picking at that particular scab. It’d be good to hear a bit more about the launch event. Anne, talk us through the launch event.

Anne Lane: The launch event was really to raise the profile of the guide and to really show support amongst the communities of investors and universities, and also commercial partners that might have to work with the guide. And I think from a university perspective, other universities, you know, it’s a guide. I think that was what we were really keen to get across. We also wanted to show government support. So George Freeman was there, which I think makes a huge difference in, you know, other universities and investors adopting it as well. And seeing that there was buy-in from government made a huge difference. And then the networking afterwards was good too, because I think people can then be a bit more frank about what they really think about the guide and are they actually gonna use it.

The feedback we’ve had so far from that launch event has been positive, but we’ll be talking at the PraxisAuril Conference in Nottingham Thursday and Friday — actually we’ll be there on Wednesday. So I think that’s where the sharp end’s really gonna be, is actually how are our colleagues going to view this?

And I think something we’ve been very keen on trying to communicate is that it’s not us telling people what to do, it’s giving people a landing zone of how it might make things easier for them and really, you know, helping people who might not have as many deals through as some of the bigger universities. I think it achieved a lot.

Andy Neely: Maina, how about from the investor perspective? What was the launch event like there?

Maina Bhaman: I think it was a good group of stakeholders, investors and universities. I think the launch event itself probably didn’t have as many investors at the event, but frankly, the feedback has been really positive. People wanna do this all across Europe. Everybody’s saying, oh, should we create a group here and a group there and a group everywhere? But I think people are already using it. I know my colleagues in Italy are using it for some of our spinouts from there. We’re using it as a guide for some of the spinouts in France.

So look, I think it’s not gonna be perfect for every different region, but I think it’s got all the good principles and most of the investors I know are pretty positive about it. It is more life sciences-focused, and so we’ll see whether it works across the piste. But yeah, most of the investors I know seem to think it’s a good idea.

Andy Neely: Can we look at the US for a minute, Karin, and just think about the way that both the BOLT work landed there, but also if there’s been any reaction to the USIT guide as well. What’s the response on the other side of the pond? I might come to Scotland as well and think about the north of the country in a minute, but the other side of the pond first.

Karin Immergluck: I don’t know to what extent the US is aware of the USIT Guide yet, and I think that’s to come. In terms of the BOLT, the US-Bolt agreement, there was a launch kind of at AUTM. But yeah, we did a couple of webinars, I guess, on it. We don’t have any statistics on it. I mean, I’ve gotten a little bit of feedback.

Anecdotally, Stanford had a law firm approach us and say, “You signed on to these terms, now you have to accept all of them.” And I said, “Read the fine print, you’re a lawyer.”

And the whole point in our case was to come up with something that’s generally acceptable, but also recognising each university has different policies. So in Stanford’s situation, we have a very strict conflict of interest policy. So there’s one term relating to assuming, I think, that the startup will be sponsoring for the research in the founder’s lab, and that that founder would be sharing pre-publication manuscripts with the startup, and that would absolutely not be allowed at Stanford. That would never be allowed. So obviously, we’re not gonna agree to that particular term.

But generally, the universities are happy about it, particularly those who are not the biggest deal-makers. I think it’s been very educational for them.

Andy Neely: Orin?

Orin Herskowitz: Yeah, I would agree. I mean, we’ve gotten a lot of feedback, I think, because I was sort of associated with the launch of it. We’ve gotten a lot of feedback from our peer universities and from a lot of random startups, and actually random investors, like people we’ve never heard of before. But who said, apparently, the NIH has started to use, the National Institute of Health in the US, has started to use it as something they teach in their sort of startup educational boot camps. And so a bunch of startups have started to use it. There was a little bit of a difference, I think, in what we were trying to accomplish with this then perhaps what the UK groups were trying to do. But I think in both cases, the value of having done it accrues mostly beyond the universities and investors that put in the time to it.

So the benefits were, you know, if you’ve got a university that’s doing 20 to 30 startups a year, you have enough data points and enough confidence that you could sort of stand up for whatever deal you negotiate. But if you’re a university that only does one or two startups a year, or a venture firm that’s never done a university deal before, and you get an 18-page, I’m thinking, like if you’re a small VC or an angel investor, and you get an 18-page agreement from a university that has clauses that look insane. I mean, sub-licensing is not intuitive. Like you look at that and you’re like, “But you already got paid, and you know, you wanna get what?” Or publication rights, indemnification clauses, there’s so many things in there that are on the face of them, make no sense at all. And so I think it’s natural for people with less deal flow to feel like they’re being taken advantage of.

And so our objective was to say, not we would all live with this deal, but rather, all of us involved in this think it’s a perfectly reasonable deal to do. And if speed is more important than perfection, you could sign this and be done, and your boss will never come back to you and say, “You idiot, how could you have signed that deal?”

If it’s good enough for Stanford and MIT and Columbia and Hopkins and Penn and, and, and, and, and, and 5AM and RA Capital, then everyone can say, “Chill out, we’re not trying to take advantage of each other. We’re just trying to get something done.” And that was the goal. So I think it’s gone well.

Karin Immergluck: And if I could add one more thing, I think it was a really good sign for us that Wilson Sonsini, probably the law firm that represents the most startups in the US, maybe together with Cooley, but they have decided to train their attorneys on this model term sheet to familiarise them with them so that they can also help educate the investors as well as the universities that they’re working with. So I felt like that was really like, okay, we’ve made it.

Andy Neely: George, you mentioned in Edinburgh, Peter Mathieson, the VC there saying he didn’t want you to stop anything getting done. How’s the guide gonna help in that sort of campaign?

George Baxter: It’s gonna be incredibly useful. I mean, just to answer your question, but Scotland, I was in a meeting with my colleagues across Scotland a couple of weeks ago and we were talking about this. Don’t know if there’s anybody here from, yeah, there’s, yeah, yeah. There was a lot of very positive response, again, to pick up on this point from the smaller universities, especially, if you’re doing one deal a year, it’s very difficult to know if you’ve got one person who’s doing this part time. It’s very difficult to do that. So response across Scotland, I think, has been pretty good. The politics in Scotland is a little bit different from England, but we’ve had some feedback from Scottish government, the Scottish Funding Council people, that it’s been welcomed. So I think generally it’s going down well.

And I think to make another point, we’ve had conversations with shadow ministers as well. So I think I’m old enough to remember science policy being something that went across all political parties and there wasn’t really much contention. And I’m glad to see that that, with a few variants, that’s pretty much still going on. We’re not getting massive polarisation of science policy, which is really good to see. So hopefully we’ll get a continuity. And I think this will really help on the continuity and take some of the heat out of the debates which are going out at the moment where people are writing into the Financial Times and everybody’s up in arms. And I get an email from Peter saying, “Where are we in this? Why are we being criticised like this?” And I think that’ll really help take the heat out of it.

Andy Neely: I think your point’s only in the UK context about the shadow government views. There’s not that enormous switch of policy, which is incredibly helpful.

George Baxter: I remember working with Lord Sainsbury, going back a long time, those of you who remember that government, and we did a lot of deals with them when I worked in economic development. And it was actually fantastic to have, and he was a very independent figure ’cause he wasn’t a politician. And it was a wonderful sort of time in science policy, I think, in Britain, because you had that real, everyone was saying, “Yeah, we know what we have to do.” And I think that set the scene for even the last quite contentious political years in the UK. There’s been, I think, a fairly reasonable consistency with some variation on science and innovation policy.

Andy Neely: Jim, are you hearing things as well in terms of how the guides landed?

Jim Wilkinson: Not particularly, I don’t think. I think we’re concentrating on Oxford, but I haven’t heard anything negative, which is always a positive.

George Baxter: As long as Oxford’s okay, bud.

Orin Herskowitz: You know, one way, if I could just jump in for one second, one way we kind of knew we’d probably landed in the right place was there was, I will not name them, but there was one university that was very vociferously against where we ended up. And there was one VC firm that was very angry about where we ended up, and both refused to sign on. And so if you have a deal where both sides are a little unhappy, then you’ve probably ended up in a good place.

Andy Neely: We’re all trying to work out which ones now. Okay, questions from the room.

Audience member #1: Sarah. I’m a patent attorney working in synthetic biology and I work with a lot of startups and scientist founders. I was at the launch as well a few weeks ago, and there’s one thing I just feel like it’s not been discussed much. I don’t know if they’re included in the discussions, is the founders of these startups. So talking about equality and making sure the universities and the VCs are involved, were the founders consulted at all in any of these?

Andy Neely: So founders versus… to what extent were founders involved in some of the conversations?

Anne Lane: Yeah, we did talk to founders, and we certainly talked to founders at UCL, and I think the other members of TenU did as well.

Andy Neely: Okay, great. Other questions?

Audience member #2: Hi, I’m Malik, I’m from Imperial Enterprise. So one of the questions I actually wanted to ask is that how does the pay-to-play work? Because I know that if you are an early investor or the university side, you won’t be able to basically pay to play in the later stages, and you won’t have the preferential rights over time. What is your insight about that from the universities?

Maina Bhaman: So pay to play generally doesn’t include the founding institutions. It’s usually about the investors making sure that the investor syndicate is aligned, not about the universities losing their rights over time because everybody recognises that the university is unlikely to be able to play all along the way.

Orin Herskowitz: Although in the US, usually we do have to keep, the universities pretty much always get preferential rights, so we have the right to follow on investments to keep our equity whole. In the US, I’ll just note a big difference in the US and the UK. Most universities in the US get anti-dilution for their equity through the A round in every single deal they do. It is entirely common, and the VCs in the US accept that. For some reason, it’s a different structure here. Our equity numbers are lower, but we’re anti-dilution. We get no dilution. If we want to keep our equity whole past that, we also need to pay, and if we don’t pay in a round, we typically cannot then get that back. So it’s, at least in my experience.

Audience member #3: Hello, my name’s Monty. I’m a student at Cambridge, and I’m part of a movement called Universities Allied for Essential Medicines. My question starts off with a quote I heard you say at the beginning, which I quite liked. You were talking about negotiations between technology transfer offices and VCs, and you said that if you take a lifesaving drug or innovation, for example, the Oxford-AstraZeneca vaccine, every six months you take to negotiate licence agreements, you can always count the number of people dying. On that theme, I wanted to ask a specific question about section 3.3.12, which is the global access and ethical licensing section in the USIT guide. Compared to the rest of section 3, this part doesn’t have any concrete recommendations about global access in it. The whole point of section 3, as I understand it, is to give concrete recommendations, and as far as I can tell, there are none in this section on global access. Sorry, that wasn’t really a question.

My question was, why are there no recommendations in that section? And a follow-up to that, I think, Orin, you also mentioned that you’re in the process of developing some almost boilerplate language for these licensing agreements, and I wonder if that boilerplate language will include some kind of affordable access plan, like you might have heard of at UCLA quite recently. Thank you.

Andy Neely: Orin, do you wanna start on this?

Orin Herskowitz: I can do the second one first. Actually, just as an aside, so most universities in the US do have some kind of global access and affordability language in their licence agreements, and at Columbia, we always have as well in our health sciences ones. They range in what approach get taken, and AUTM has a toolkit available — AUTM is the Association of University Technology Managers — has a toolkit with different global health-related clauses that universities can choose from. I think what Monty was referring to is UCLA and now UC Berkeley worked, I think, very, very productively with UAEM and also a group called the Medicines Patent Pool, MPP, to develop specific clauses around global access and affordability language, which are really, really good. We’re starting to adopt those in more of our agreements, and it’s certainly, it’s in our template now that that’s in there.

Whether it will end up in the US-BOLT licence, I think will probably be a question of, maybe they’ll offer a few different versions of it. In our experience, investors have not always loved those clauses because anything that locks a company at that stage of development into a specific plan is hard for early-stage investors to take. It’s why I actually think the UCLA and UC Berkeley language works so well because it doesn’t lock you into a plan. It locks you into eventually having a plan, which is quite a sensible approach in my perspective.

Anne Lane: So I know from UCL, we always try and include a clause like that into our licences. Our success rate has been not very high because trying to get it across, and it’s usually for a therapeutic, trying to get that across with a big pharma is almost impossible. We have got it through with some of our gene therapy licences, but again, in terms of investment, it’s very difficult to do that. So I think that was why we didn’t specify in great detail, but it’s something, obviously, that we’re still developing the guide and we’re still working on it, so that’s something we can certainly look at putting in now that we’ve seen similar things in the US.

Jim Wilkinson: I think that’s the point, Monty, is that we weren’t trying to come up with a complete answer to everything. It really was the first time of trying to get a landing place and then from this, as we get feedback as people here, we’ll decide, I guess we’ll decide how this evolves and what happens, and there’s clearly many areas that need aligning a little bit more and narrowing down in scope. So I think this is the first step.

George Baxter: I think most of us have already got very specific policies on this, which we publish on our websites and university websites. So it’s something that the university spent a lot of time talking about in the past. So for the reasons that everyone said, plus we’ve already got those statements, most of us pretty much very similar statements, but we didn’t really need to add it further into this.

Andy Neely: One final question from the room.

Audience member #4: Thank you very much for this evening. My name is Alessandro Maiano, and I’m the founder of a firm that educates scientists on the challenges of building ventures as a spinout. And we also do venture building. We invest through a fund based in the US and we run labs as well. So we try to do the end-to-end platform for scientists. And I’ve been investing time to spend less time with scientists and more time with TTOs and other colleagues, VCs, to try and find a platform where we can find a common ground.

And the first question clearly was an opportunity to address a question that perhaps the majority of us don’t find as a priority in this room, but a large chunk of the ecosystem finds very important, i.e. this organisation represents the interests of two of the main stakeholders of a spinout, i.e. TTOs and VCs, but scientists are unheard.

And so one large question is, and as Jim put it, this is a first step. Do you see scientists being involved as a second step and as part of the evolution of this template, this set of terms?

And the second question, if you like, to follow up to that is, and this is to follow up to Orin, you said that MIT and Stanford have pretty much set the path over what a successful TTO could perform like. And do we feel that perhaps we could just try and follow those steps much more closely rather than reinvent the wheel designed around the stakeholders of this particular country, for example? Thank you.

Jim Wilkinson: I’ll do the second question first. I think as we sort of started off, is every university, every ecosystem’s completely different. I think in the Oxford case, there’s a very clear demonstration that Oxford was relatively successful before OSE was created. And we were created by the university and by the academics and alumni. And that was to answer the question of the shortage of capital. And I think what you saw in Oxford, there’s a very clear line of progress, which was one, raise the capital, two, operate under the existing rules for two or three years. And then gradually the rules evolved as the number of spinouts went up and the amount of capital, extra capital, came in, other investors came in. And we’ve ended up with a different equity split and a different sort of licensing arrangement. I think if you just said, the answer is MIT’s operations, I don’t think you’d answer the question of how you get capital in. And you might actually wreck what you have got. So I’d be pretty cautious about changing things.

Anne Lane: I was gonna answer your first part of the question, which was scientists. So founders are inventors and scientists. So we have already consulted with those. And I think the government is also, with the spinout review that they’re doing of UK spinouts, there’s a survey that’s going around now to actually ask founders what their experiences are. So they are being included in the discussions very, very heavily.

Andy Neely: And if you’d like to express views directly to one of the people, we’ve got Andrew Williamson over there who’s co-chairing that particular review from Cambridge Innovation Capital.

Andrew Williamson: I believe there are something like 1,800 university spinouts that are active in the UK. And so we put out a survey, we would like to reach the founders or the sort of early management teams of as many of those businesses as possible over the next few weeks. So maybe, is Ananay here? We could send out a link to that survey to the people who are in the room. It’s a rather long URL, but within a few hours, we had a couple of hundred or so. So we’re trying to get a very systematic and sort of comprehensive founder perspective on exactly these topics. And all of the things that are being discussed and much more are asked in that survey. So please do share that around.

Andy Neely: Great, thank you.

Orin Herskowitz: It’s also just worth noting one thing. We never entered this — MIT, Stanford, Columbia, Harvard, Johns Hopkins, et cetera — we didn’t have the hubris to go into this saying, we’re gonna design the perfect licence agreement. We weren’t trying to rewrite the movie. We just wanted to say what the movie is. And so the most important people to describe that is someone who’s seen the movie over and over and over again. And so the goal for us was to get, not to describe, let’s just reinvent things and start from scratch and design what every stakeholder would want. We were trying to say the universities that do 20 to 30 deals a year and the VCs that do, this is all they do all day over and over and over again. And then in some ways, the best people are Cooley, Goodwin and Wilson Sonsini who literally just spend all day negotiating agreements. That’s all they do.

Could you redesign a licensing agreement from scratch to better serve all parties? Possibly. It has never actually been done. And so, so far, the approach we took was try to take where the sort of best in class current practices are and spread them. It would be, I think, really exciting to see if a better agreement could be worked out. It just wasn’t the remit of this group.

Andy Neely: On that particular note, this is definitely something that will evolve over time. I’m sure these conversations will continue. It’s great to have that collaboration as well between the US and the UK around some of these topics. And TenU plays a really important role in that. So I hope you enjoyed the session. Thank you all again for your time. Thank you all for joining us. And please join us outside.

Thierry Heles

Thierry Heles is the editor of Global University Venturing, host of the Beyond the Breakthrough interview podcast and responsible for the monthly GUV Gazette (sign up here for free).