Our commitment to your Commercialisation Journey
May 2024
The University of Sheffield is committed to fostering a vibrant innovation ecosystem. Founders are at the heart of the Commercialisation Journey, which supports them to create high-potential spinout companies in collaboration with investors and the University. The Commercialisation Journey is the culmination of five years of continuous University investment and experimentation and is designed to support innovators to explore and maximise their commercial ambitions.
Our 2020 Vision and strategic plan prioritised building robust mechanisms for translating research into successful startups and licensing opportunities. In collaboration with Northern Gritstone, we continue to invest in University and local commercialisation infrastructure.
The University of Sheffield and Northern Gritstone are co-developing a comprehensive range of initiatives to support founders throughout their company-building journey within South Yorkshire and across the north of England. These initiatives include establishing talent networks, providing incubation space, offering high-quality innovation services and delivering world-class acceleration programs. This investment ensures that innovators and founders gain access to valuable resources to de-risk and refine their commercialisation plans to build thriving companies that can contribute to the local economy while achieving global impact.
The University of Sheffield is also proud to be an active pre-seed investor in spinouts and is usually the first investor (pre- and post-incorporation) to financially support founders. The University deploys approximately £1.5 million cash per year into new commercialisation opportunities and spinouts to ensure that founders can de-risk their companies for all stakeholders.
The University of Sheffield welcomed the independent review on spinouts, the government's response, and the renewed focus on this critical area of innovation. We are confident that many of our existing policies already align with the review's recommendations, and are committed to further refining our practices.
The University of Sheffield is committed to an efficient spinout process that fosters innovation and supports our researchers in translating their ideas into successful companies.
Our Commercialisation Journey streamlines the spinout process with defined timelines, subject to the availability of an entrepreneurial lead or founder to drive the project:
- Stage 1 (Understand) concludes with the identification of an initial value proposition and usually requires three months.
- Stage 2 (Explore) has a flexible timeline to accommodate adjustments based on market discovery findings. Stage 2 completes once the innovation team can articulate how their value proposition fits the market and can generate revenue.
- Stage 3 (Design) has a flexible timeline to accommodate based on the founders' access to investment. Stage 3 completes once an investable business plan is available.
- Stage 4 (Launch) targets completion within three months and focuses on completing internal approvals and legal agreements.
We evaluate each spinout opportunity, considering the needs of the founding team, management structure, intellectual property value, university contributions, industry standards, and financing requirements. Spinout deals are based on market-driven terms, minimising negotiation delays. Equity and licensing arrangements align with the University Spin-out Investment Terms (USIT) Guide, and fall within the established benchmarks in the sectors described.
We promote fair and proportionate equity distribution among founders, taking into account opportunity costs, risks, and anticipated contributions to the future growth and leadership of the spinout company. Leaver provisions are included within agreements where appropriate to accommodate potential changes in the founding team composition during the fundraising process. The University typically holds between 10%-20% founding equity in a spinout company, with the remainder allocated to the founding team and management.
The University offers well-tested and market-approved template agreements for shareholder agreements, articles of association, and IP transfer agreements, streamlining the process for all stakeholders. We are receptive to incorporating additional templates arising from independent spinout reviews (e.g. a BOLT-like agreement), demonstrating our commitment to continuous improvement.
The commercialisation approvals process at the University of Sheffield is well established and efficient. The following authorities are in place and are appropriate routes of approval:
- Incorporation of a new company - Approval by the Vice President (Research and Innovation) and Chief Financial Officer. Delegated authority is in place to permit continuous operation during periods of absence or annual leave.
- Shareholder related decisions - Approval by Chief Financial Officer. Delegated authority is in place to permit continuous operation during periods of absence or annual leave.
- IP-licence approval (non-equity consideration) - Approval by Head of Commercialisation. Delegated authority is in place to permit continuous operation during periods of absence or annual leave.
The following authorities are in place for approving investment from the University of Sheffield IP Development and Commercialisation (IPDaC) Fund:
- Below £10k investment, up to once per year per project - Approval by the Head of Commercialisation
- Above £10k investment - Approval by the IPDaC investment committee which meets once every 2 months minimum. Exceptional meetings can be scheduled as required.