Summit and awards celebration

Hermann Hauser, one of the most successful venture capitalists (VC) with five portfolio companies previously valued at more than $1bn, once reputedly remarked that students and faculty at Cambridge University had the lowest return on investment per intelligence quotient (IQ) point anywhere in the world.

But this was 20 years ago as the university was in the process of opening up to the commercial potential of the ideas created in its colleges and allowing Hauser to bring in the professional managers and marketeers to sell the technological creations of some of the brightest minds on campus.

Now, Cambridge Enterprise (CE’s) has won the Global University Venturing 2013 Award for Unit of the Year as for each pound invested by the university to spark a spin-out has followed £88 ($120) in follow-on funding from other providers of capital.

Two of its most successful spin-outs, Autonomy and ARM, have also been in the process of giving back to the fertile grounds that hosted their first steps. Mike Lynch, founder of Autonomy sold to Hewlett-Packard for about $11bn, set up VC firm Invoke Capital to back university spin-outs, starting with Darktrace from Cambridge. See here for Lynch’s video interview with Tim Lafferty, managing director of Global University Venturing, after winning the Global University Venturing 2013 Personality of the Year Award.

UK-listed chip designer ARM has committed to CE’s later-stage £50m fund, Cambridge Innovation Capital, which complements the activities of the growing group of investors targeting academia.

Tony Raven, chief executive of CE, pictured receiving his unit’s award, said the capital needs of many start-ups meant syndicates of investors were important and being formed with groups, such as Imperial Innovations and Invoke.

Susan Searle is pictured here receiving the award for Lifetime Achievement mainly for her work as chief executive of Imperial Innovations from 2002 to July 2013.

But this is a global and increasingly collaborative industry, as winners for awards and delegates to the inaugural Global University Venturing Summit hosted by Baker Botts came from around the world, including Germany, Japan, Russia and the US.

Edward Benthall, chairman of Cambridge Enterprise, said: “For Cambridge, it is important to keep up with what our peers are doing around the world.“

In the opening keynote address at the Global University Venturing Summit, Shelley Harrison, founder of Symbol (sold to Motorola for $4bn), Harrison Ventures (the first VC firm to give carried interest to a university), SpaceHub, and adviser to Coller Capital, talked about how his work with New York University’s CUSP initiative was bringing together academic institutions from around the world, including Israel, the UK and India, and blue-chip corporations, such as IBM.

Steve Legg, head of UK and Ireland university relations at IBM, said he had dealt with 100 universities in recent years on collaborative projects as the US-listed technology company sought out the students, ideas and start-ups that could help the company continue to grow faster than peers. Worldwide, IBM maintains links with more than 5,000 universities.

And this search for equity growth and financial return is what is increasingly bringing the trinity of governments (representing society), basic and applied research (represented by universities and laboratories) with business (through corporate venturing units). As individuals, companies and societies start to emerge from the last financial crisis so they are realizing that the rapid rise in debt levels over the prior 30 years that leveraged assets to increase valuations is less likely to be repeated over the next few decades.

After all, interest rates can hardly go down further, equity-to-debt ratios have stabilised and debt multiples on some assets went from one to 15 times but are less obviously likely to reach three figures even to the banks and shadowy lending groups with a vested interest in this happening.

With this realization comes the appreciation that for people, companies and societies to outperform their peers they need to show growth, which appropriate amounts of debt can then leverage to boost returns further.

For universities, decreasing amounts of state funding for R&D is combined with potential limits on student tuition fees limiting income during a period of potential disruption from online courses and globalization of competition. This leaves one potential route for survival – making more of the assets – the people and ideas – as they pass through the institution, which is why the UK government announced this week a £1bn ($1.5bn) proposal to boost joint ventures between universities and business, following on from similar initiatives around the world, including the US and Japan.

And so this is the dawn of a new asset class: the university-sponsored asset manager dedicated to creating impact on society through commercialization of academia-inspired ideas.

Few institutions appear to want to follow Harvard’s example and allow the next Facebook-sized business walk out of its doors having been created through use of university intellectual property with no more than a prayer the founder will remember his alma mater in his will through a philanthropic gesture.

While university research and development lies third behind corporations and governments by size of dollars committed, according to research by bank SVB, a sponsor of the Global University Venturing Summit, there is a rapid growth in the numbers of funds being launched and deals being done (see my presentation slides here).

But just with any nascent industry the wiring between people is still being formed.

As the veteran of one very large corporation said to the head of a very large and old university: “I’ve been living in your university town for 30 years and I don’t think we have ever met. Perhaps we should catch up?”

Or as Crispin Leick, head of Innogy Venture Capital, a VC firm backed by Germany-based power utility RWE and sponsor of the Summit, asked at the end of his keynote speech: “How do we build a meaningful relationship with universities?”

The long list of people offering suggestions during the breaks and unpanel discussions offers the promise Leick received some good answers and fulfilled the mission of this sold-out Summit and indeed our company as a whole.

As David Hume noted: “Truth springs from argument among good friends.”

Or as William Blake observed from another period of Cambrian era-type explosion of creativity and new forms: “Exuberance is beauty.”

Those attending the gala dinner at the Royal Exchange in London after the awards seemed to put both mottos into action.

But what would you like to say about the awards and summit, in addition to testimonials here?

We would most welcome feedback to help our planning and delivery of our next Global University Venturing Summit:

Did you find the mix of corporations, investors and universities from around the world a good way to spark debate and build contacts?

Who would you like to hear speak?

Would you like to see entrepreneurs pitch in a special session?

Is October or November a good time to hold it? (or when is better?)

Would a more appropriate venue be at a university?

Is London, UK, a good location (elsewhere in the UK, other region?)

Would a full-day programme be better than a half-day?

Or two days?

Any
thing else to add?

For our annual survey please check out the handful of questions here

See the Summit videos here

http://vimeo.com/channels/608825

by:

Simon Bond, University of Bath

James Golubieski, NJHF

Shelley Harrison, Coller Capital and NY University

Dermot Hill, Intramezzo

Bernhard Katzy, CeTIM

Miles Kirby, Qualcomm Ventures

Steve Legg, IBM

Crispin Leick, RWE Innogy Venture Capital

Mike Lynch, Invoke Capital

James Mawson, Global University Venturing

Zenichi Shishido, Hitotsubashi University

Click here to view GUV 2013 Summit photos

For copies of Summit presentations made available, please see here and contact Gregg Bayes-Brown, news editor, to send through news and help with our monthly regional feature.

Twitter feed at @GUniVenturing

And check out the website for ongoing news and we’ll be converting to paid-for subscription from next month so for a special early-bird discount contact Tim Lafferty

For those interested in Global Corporate Venturing, we’ll be sending out more details for the May 2014 Symposium shortly and please see the website here.