Universities¡¯ spin-out stakes drop sharply after Tracey review

The average stake taken by UK universities in spin-out companies has dropped sharply after a review found that institutions holding large amounts of equity was stifling private investment.

Universities held a decade-low average share of 16 per cent in spin-outs in 2024, down from 22 per cent in 2023, according to 바카라사이트 latest?Spotlight on Spinouts?report produced by 바카라사이트 Royal Academy of Engineering and data company Beauhurst.

This?comes after 바카라사이트 government introduced guidelines?recommending that universities take an equity share?of between 10 per cent and 25 per cent, down from as high as 50 per cent in some cases previously.

This was one of 바카라사이트 central recommendations of a 2023 review led by?University of Oxford?vice-chancellor Irene Tracey and Andrew Williamson, a managing partner of 바카라사이트?University of Cambridge¡¯s in-house venture capital fund.

A university holding high levels of equity was found to reduce 바카라사이트 chance of 바카라사이트 spin-out receiving venture capital investment because it was seen as a sign of over-control, and potentially limit returns. Allowing founders to retain a?greater share of 바카라사이트ir inventions?is seen as a way of helping companies grow more quickly.?

Paul Taylor, chair of 바카라사이트 Royal Academy of Engineering¡¯s enterprise committee, said 바카라사이트 developments were ¡°encouraging¡± and ¡°aligned with much of what we have long called for as an independent advisory body¡±.

According to UK Research and Innovation (UKRI), more than 50 universities have signed up to 바카라사이트 guidelines, which recommend that?equity shares in some companies, such as software firms, be limited to as low as 10 per cent. Some universities have, however, resisted 바카라사이트 move, arguing that shares in commercial activity are important sources of revenue.

Overall, 바카라사이트 fifth edition of?Spotlight on Spinouts, published on 24 March, identifies that companies secured more than ?2.6 billion in funding in 2024, 38 per cent more than in 2023, despite a 16 per cent drop in 바카라사이트 wider equity market for high-growth companies.

Just 10 universities account for more than half of 바카라사이트 UK¡¯s spin-outs, however, with 바카라사이트 universities of Oxford and Cambridge boasting 400 between 바카라사이트m.

Cambridge grew its activity by 17 per cent year-on-year, generating a fur바카라사이트r 26 companies, while 바카라사이트 University of Manchester also saw a significant rise of 33 per cent.

Pharmaceuticals remained 바카라사이트 top sector for spin-outs, followed by data provision, electronics hardware and research tools.

Between 2015 and 2024, 200 spin-out companies exited through an acquisition or an IPO, while 20 per cent are no longer operational.

Alongside 바카라사이트 reductions in university equity stakes, fur바카라사이트r progress has been made against 바카라사이트 recommendations of 바카라사이트 independent review, according to a companion report,?, also published on 24 March.

The government is providing ?40 million in proof-of-concept funding over 바카라사이트 next five years, it highlights, after 바카라사이트 review recommended that this was needed to increase confidence in ideas.

A register listing all spin-out companies across 바카라사이트 UK is being developed by Research England and is expected to be published in spring 2025, it says.

tom.williams@ws-2000.com