Much to the surprise of many, the Government is putting its weight behind reforming university spinouts. More than anyone else, Air Street Capital’s Nathan Benaich can be credited – or blamed, for those lobbying against change – with putting this on the political agenda.

As Benaich explains on Spinout.fyi, this kicked off in May 2021, when he wrote an op ed in the Financial Times (Paywall). Off the back of this, he’s built a database of founders’ experiences spinning out. According to this data, most founders are dissatisfied – principally because of how long it takes: “The negotiation process is too long and cumbersome: 66% of spinout deals take longer than 6 months to complete, and 27% more than a year. In comparison, startup seed rounds typically take 3 months.” In addition, Benaich finds that UK universities take 19.8% of equity on average, compared to 7.3% taken by European universities and 5.9% taken by US universities.

This wasn’t a new issue, but it’s only recently gained political attention, with the Government keen to hear from the founders of spinouts. We’ve engaged with the team working on this consultation and are impressed. Entrepreneurs shouldn’t just respond if they have a negative account of working with their tech transfer office – a positive or neutral experience is just as valuable. After all, one of the big takeaways from Benaich’s data is that there is significant divergence between universities on everything from golden shares, royalties, upfront payments, exit fees, and much else besides.

You can access the consultation here. Please share it with anyone you know who has spun out a company from university.

For our part, we are ready to roll on a report on spinouts. Anyone interested in getting a briefing before it hits your inboxes should drop Eamonn Ives an email.

Raking Progress
With news that OpenAI will open its first foreign office in the UK, and following on from the much-needed upgrade of both people (bringing in the super-smart entrepreneur Ian Hogarth) and bodies (scrapping the AI council) advising the Government, there are reasons to be optimistic about the role that the UK’s entrepreneurial ecosystem can continue to play in building this foundational technology.

A lot has been written about the transformative power of AI – but much of the time people are arguing past each other. For a considered, good faith debate, I recommend reading what started as a Google Doc conversation between Tamay Besiroglu and Matt Clancy (a previous author of our report on the future of work), with the former arguing that we will likely see a rate of growth that far surpasses anything we’ve previously witnessed, while the latter isn’t quite so optimistic.

Our Man in Alba
Dr Anton Howes, our Head of Innovation Research, has relocated to Edinburgh. As such, you could argue – and I’m going to do so – that we now have a Scotland office. If you’re based in Scotland then do reach out to him, as he’ll be embedding himself in the local ecosystem.

Anton is a noted historian of the industrial revolution (sign up to his award-winning Substack here). While he’s up there, he’ll be tasked with spearheading a rerun of the Scottish Enlightenment, which boasted the genius of Adam Smith (the founder of economics born 300 years ago), David Hume (the great empiricist) and James Watt (a pioneer of intangibles assets). No pressure, Anton!