The Technical University of Darmstadt is solving the high upfront cost for spinout founders to buy IP by enabling them to only allocate shares if there's an exit.
Licensing intellectual property to a spinout can take frustratingly long and end with large equity for the university that a potential investor might not be comfortable with — an argument heard particularly often in the UK. There are initiatives to improve this. The US has BOLT and the UK has the USIT Guide, template term sheets co-developed by tech transfer offices, investors and law firms to speed up the process significantly. Ireland even has a national IP protocol.
Germany has been lagging behind — outside the innovation hotspots of Munich and Berlin — but universities across the country are exploring new models to speed up IP licensing and create favourable terms for all parties while removing the upfront financial burden of buying the patent rights from the university (a stifling factor at German institutions).
Global University Venturing’s own Kim Moore recently looked at one German university that’s figured out a unique solution: TU Darmstadt’s IP for Shares. Its model is as simple as it is ingenious: the university only gets shares in the spinout if there’s an exit.
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Thierry Heles
Thierry Heles is editor-at-large of Global University Venturing and Global Corporate Venturing, and host of the Beyond the Breakthrough podcast.
