This course is for experienced technology transfer managers whose portfolios includes expertise technologies, that may be best commercialised in a spin-out company.
Why Join This Course?
The course is interactive, you will learn through case studies and role play facilitated by those who have been actively involved in building, financing and managing successful university spin-outs.
Who Should Attend?
This course is for experienced technology transfer managers whose portfolios includes expertise technologies, that may be best commercialised in a spin-out company. We explore what sort of technologies are best commercialised in this way, and the role of TT managers in setting the initial business strategy.
- Gain an overview on the process of spinning out a company from a research institution
- Introduction into funding, especially Venture Capital financing
- How to manage conflicts of interest regarding scientists, founders, research institutions and TTOs
- Deepen your knowledge using interactive case studies
- Business plans
- Building value
- Due diligence
- Conflicts of interests
09:00 - 09:15 Course Introduction
This short module introduces the course, course directors, and trainers.
The content is based on the materials in the course brochure, the course programme and biographies of the trainers.
After this module, the real course starts via a series of short modules, cases, homework sessions, pre and post-reading exercises.
09:15 - 10:00 Getting to Know the Trainers and the Group
Through various ways of working you shall get to know fellow participants and unpack the first module. Following this module, the real course will kick-off with a series of short modules, cases, homework sessions, pre and post-reading exercises.
10:15 - 11:15 When and Why to Spin-out
There are basically two ways of commercialising a new technology as a result of academic research: licensing as is, and adding value in a spin-out.
How do you decide whether you should form a spin-out: what are the criteria and when is the decision made?
This module gives alternatives and pro’s and con’s for both routes.
11:15 - 12:30 Spin-off Strategy & the Role of the TTO
09:00 - 09:30 Evaluation and Case Study Reporting
09:45 - 10:30 Business Models: developing the commercial strategy
Businesses face many strategic options and the Knowledge Transfer Manager needs to know what the most important issues so they can be addressed explicitly, rather than being allowed to drift. What should be the initial application, what should the company do itself and how is it ultimately going to make money? All these questions are aspects of the business model which is the starting point of a commercial strategy.
10:45 - 11:30 Legal Agreements
The legal agreements for a spin-out are far more complex than any R&D or license agreement.
There can be many separate agreements covering different aspects of the investment, the company, and the relationship with the university.
The structure of these documents can set the agenda for the negotiations and it is vital that KTO has a clear understanding of what and who (potentially, up to four sets of lawyers) is involved.
11:45 - 12:45 Negotiation Role Play: Specialised Limb Salvage
In this case the challenge is to understand the dynamics of negotiation splitting the group into four ‘interest groups’ – (university TTO, academics, managers and investors).
What are the most important issues for each group: who assumes that they have the power during the negotiations, who sides with who, what tactics should we use to maintain a united and strong bargaining position?
09:00 - 09:45 Case Study Group Discussion: the role of the TTO
What is the role of the Knowledge Transfer Manager in forming a spin-out?
There are clearly many ways in which you can create value and make a technology more ‘investable’- acting as the first ‘CEO’ of the business to pull together a management team and managing investor relations as well as securing the IP portfolio and helping to devise the commercial strategy. But how far should you go and how much support should you give before handing over to more experienced hands? What is the role for the researchers? What is the role of all internal stakeholders in decision making?
10:00 - 11:00 Managing Conflicts of Interest
Founding academics are vital to the business in the early years, but few leave their posts within the university. It is better for the company and the university, and the academic, if they keep a close association with both. However, this entails the academic wearing multiple ‘hats’ and creates the potential for conflict of interest situations, which need to be managed. What is the KTO’s role in minimising and managing these conflicts?
11:15 - 12:15 Strategising Financing
Getting equity instead of an upfront payment is standard when founding a spin-off company from a research organisation. This session gives an introduction to the skills set needed to manage equity. You will look into:
- What is Equity
- Ideal cycle of funding
- Exit mechanisms
And “The Dark Side” … may the force be with us.
12:30 - 13:30 Longshot Pharmaceuticals: Case Study Introduction
First round financing: negotiating the interest of the academic and university.
This case study introduces the main issues that emerge during the negotiation of the Terms Sheet and discusses how they are resolved; in terms of both process and outcome. We also discuss the conflicting interests of the investor, inventor and KTO: how can these be reconciled, and consider the ‘showstopper’ issues for the university as it attempts to limit any liabilities. Other issues raised by the case:
- Aligning incentives
- Valuing IP, cash and ‘sweat’
- Share vesting issues
- Royalties vs. equity
- Milestones and ‘tranching’ of investment
- Warranties and indemnities – limiting downside
- Anticipating future funding rounds
13:00 - 13:45 QTIS / Xeltis Case continued
09:00 - 09:45 Case Study: evaluation and reporting
10:00 - 10:45 IP as the Primary Asset
IP strategy: what does the license agreement look like, royalty vs. equity, when to license/assign.
11:00 - 12:00 Surviving a Spin-out
We are there at the beginning of spin-out, but our role is often phased out, or at the very least, we become less ‘central’. Once the investment is raised, and the management team starts to assemble we revert to being the ‘licensor’. In this session we hear from the CEO of a spin-out, who has first-hand experience of the entire lifecycle, to help us understand their perspective on the role of the university and KTO.
12:15 - 13:00 Corporate Venture Funds
The world of venture funds: an overview of VC’s, what is relevant, when is it relevant, how to prepare, what not to do? Typical characteristics of specific funds in specific sectors?
Some major corporates have also created their own venture funds which are used to invest in early-stage technologies. These can provide a link with the corporate resulting in input of know-how and a potential exit route. How do such funds operate and structure investments in a way that recognises the inherent conflicts between the investee and investor?
13:15 - 14:00 The Venture Capitalist’s Mind
What do investors look for in a new venture? How and when should you approach them and with what information? What is their typical decision-making process? This session aimed at understanding how venture capital investor think and make decisions relating to early stage technology business.
09:00 - 09:45 The Business Plan
A business plan must be written as a snapshot of the current knowledge, progress and strategy, but what is it? Most are poorly written, often focussing on the wrong things and leaving the reader confused and no wiser. What is the purpose of the business plan; what should it and what should it not address?
10:00 - 10:45 Building Value into a Business
Most businesses are worth very little when created. Ultimately, it’s the role of the founders to build value into the company, both by de-risking the technology and building sources of solid commercial value which can ‘scale’ when the business is ready to take off. In this session, we fast-forward the venture to examine the creation of ‘value’ and the role of the founder as the business evolves.
11:00 - 11:45 Preparing for Exit
Everyone is looking to exit someday. What are the primary routes and alternatives to exit? What are the stages along the way in terms of company-building, finance and regulatory? How does the exit strategy affect the strategy within the company and the behaviour/thinking of those involved in the company? What are the preparations and processes that have to be in place from the start?
12:00 - 12:45 Preparing for Due Diligence
All investors carry out due diligence prior to investing. Unless the KTO anticipates the questions that will be asked, the documents and disclosures needed, then the due diligence process can seriously impede momentum and create doubt; which equals greater risks in the investors’ minds, unless the university is prepared to warrant everything. What does due diligence entail; what should the KTO do in advance?
13:00 - 13:45 M&A / bought / merger / integrated …?
What to do if the chosen exit seems to be a M&A-step.The steps in the process of “being” bought and integrated; roles, team, process, negotiations, lawyers, term sheet, SPA, payments, …
13:45 - 14:00 Course Wrap-up
Review of the learning achieved in the course, a wrap up of the teaching and evaluation of the work.