Portico Venture is a new model for IP commercialisation that aims to give UCL researchers more freedom to take their ideas to market through spinouts. Specifically aimed at supporting academics creating non-patentable intellectual property such as software, know-how, algorithmic methods, the Portico Ventures model seeks to encourage the creation of technology-based businesses that can thrive in a fast-moving ecosystem.
The programme is delivered through UCL Business (UCLB) in partnership with UCL Innovation & Enterprise.
WHO IS IT FOR?
Following a successful one year pilot run within the Department of Computer Science, Portico Ventures is now available more widely across the University. A rollout programme of communication is commencing in October 2019, starting with departments in the faculties of Engineering, MAPS and the Bartlett; focusing on those departments that typically produce research outputs that are not eligible for patent protection whilst still being commercially interesting.
All UCL members of staff from postdoc to Professor, who have a credible business opportunity based on their research at UCL are eligible. Teams are warmly welcomed – these may include people from outside of UCL or perhaps undergraduate or graduate students, as long as the key Intellectual Property (IP) being exploited has originated with a member of UCL staff and that IP is therefore owned by UCL. Speak to our team for further details.
Portico Ventures offers two routes to spinout, depending on the experience and propensity of the founding team to develop the opportunity relatively independently of UCL support. For those founders who may have set up businesses in the past, have worked with corporate partners before joining UCL or as part of their research and have most of the skills, knowledge and contacts to transform their academic focus into a profitable spinout, we offer a founder-driven track. In the case where the founding team are likely to require more hands-on support from UCL or UCLB, perhaps in developing a business plan, identifying investment opportunities, access to office space etc., the tailored-UCLB support track is offered.
How does it work?
The Portico Ventures model was developed to allow UCLB to strike a more founder-friendly arrangement for equity (company ownership) in eligible spinouts. By acknowledging that spinout businesses based on non-patented IP typically develop in a different way to patent-heavy opportunities but still always require a licence to UCL’s Intellectual Property, UCLB working with UCL Innovation & Enterprise, have agreed to establish Portico Ventures as a fixed equity model. This gives clarity upfront to the founding team as well as potential investors on UCLB’s expectations with respect to equity ownership in the spinout company in return for a licence of the required software, know-how and/or other non-patentable IP. Portico Ventures spinouts would not normally expect to pay any royalties to UCLB in addition for such a licence.
Equity arrangements – the two-track model
In the case of the founder driven track, the spinout will receive an exclusive commercialisation licence to the UCL IP, in exchange for UCLB holding 5% (fully diluted) equity in the company as calculated at the point the company has accumulated its first £1million in equity funding. The founding team can distribute the remaining 95% equity among themselves (and any other stakeholders, such as early investors), but should include a minimum 10% option pool to incentivise initial employees, advisors, non-executives etc.
In the case of the tailored-UCLB support track, the spinout will receive an exclusive commercialisation licence to the UCL IP plus hands-on support UCLB to progress the opportunity pre-incorporation and beyond, in exchange for UCLB holding 10% (fully diluted) equity in the company as calculated at the point the company has accumulated its first £1million in equity funding. The founding team can distribute the remaining 90% equity among themselves (and any other stakeholders, such as early investors), but likewise should include a minimum 10% option pool to incentivise initial employees, advisors, non-executives etc.
Portico Ventures excludes pure consultancy companies and only supports spinout opportunities based on non-patentable IP, a full list of which needs to be disclosed at the start of the process. The UCLB Business Manager will perform the relevant due-diligence checks on the IP, establishing ownership rights and working out compensation arrangements with all owners in the case where the research was, for example, funded by an external organisation other than the Research Councils.
UCLB expects to stay a shareholder in the company until an appropriate exit event (e.g. sale, IPO). During that time, it will have regular shareholder rights, including certain information rights to fulfil its reporting obligations to UCL. It is expected that the 5% or 10% shareholding will dilute over time as the company raises investment beyond £1m. At an exit, UCLB will share the proceeds from its converted equity according to the UCL revenue share policy, which means that a significant portion of the net income received by UCLB on an exit event will be returned to the Department / UCL.
Researchers interested in providing consultancy services should explore the UCL Consultants model. Those working on patentable technologies should speak to UCL Business about options for commercialising their results.
What are the benefits?
Portico Ventures is designed with the confident researcher-entrepreneur in mind: it aims to allow UCL staff to take their ideas forward with greater independence in return for a greater share of the reward. It also allows for first time researcher-entrepreneurs to benefit from UCLB’s 25 years of experience in establishing successful spinout companies via the tailored-UCLB support track. In both cases, a host of tools and guidance materials have been developed by the Portico Ventures team for researchers to explore and make use of.
A first step to any commercialisation activity is for UCLB to ensure that the IP required by the spinout is properly disclosed and that ownership rights and revenue sharing are agreed with all contributing inventors / creators / funders before it can be licensed to the spinout. Existence of such IP due diligence and the subsequent ‘clean’ IP licence from UCLB is usually examined by investors particularly experienced venture capitalists prior to making an investment, as well as by potential acquirers in the future. This is because they are seeking to ensure there will be no contest of IP ownership rights in the future for what would be considered the company’s core IP, essential to the development of a successful, defendable technology business. To understand the UCL staff intellectual property rights policy and the full terms of the non-royalty-bearing Portico Ventures licence, contact the programme team.
Access to UCL support
While founders take the lead, Portico Ventures allows them to access UCL Business and UCL Innovation & Enterprise resources through our support framework. This includes information on funding sources for market studies and proof of concept, templates for legal and financial documents, networks of experts and potential service providers in fields such as tax, legal advice, accounting and visas, links into the wider London entrepreneurial and investment ecosystem. For full details on the support we provide, have a look at our dedicated page.
Recognition as a UCL spinout
All Portico Ventures companies will be promoted as UCL spinouts through our website and our networks. Companies will also receive a support toolkit, detailing how they can make the best of the wider UCL entrepreneurial ecosystem.
Where to start?
If you already have a business idea, use our confidential form to start a conversation. We aim to respond and arrange a meeting to further discuss your plans within two weeks following this first submission.
A programme of communication to selected departments across the faculties of Engineering, MAPS and the Bartlett is being arranged over the coming weeks and months. If however you can’t wait and would simply like to find out more, please contact us.
What support is available?
While researchers are the driving force behind Portico Ventures spinouts, the programme still aims to provide them with the documentation and the networking they need to succeed. Our businesses have access to a host of templates, guidance notes and contacts that they can rely on at every step in their spinout journey.
How does it fit with UCL and the wider ecosystem?
The UCL ecosystem
UCL has a long history of entrepreneurship and spinouts. Its business arm – UCLB – has been turning exciting technologies into successful businesses for over 25 years. Its list of spinouts includes the likes of Puridify, Satalia, MediaGamma, Autolus, Space Syntax, Chirp and many more. Businesses supported through Portico Ventures receive full advantage of UCLB’s experience in spinning out successful businesses, the close relationship with the UCL Technology Fund and connectivity to the wider London investment ecosystem.
For ideas that are still budding, UCL provides a variety of innovation development and proof of concept funding schemes as well as entrepreneurial training through UCL Innovation & Enterprise. Portico Ventures works in partnership with UCL Innovation & Enterprise and encourages applicants to make the most of the funding, accelerating and learning opportunities it offers.
London’s Global University: taking advantage of the capital’s ecosystem
London has one of the most vibrant entrepreneurship ecosystems in the world; Portico Ventures aims to take full advantage of UCL’s location and networks across the capital, referring our spinouts to London’s wealth of accelerator and incubator programmes, its dynamic VC and business angel communities, as well as the capital’s excellent networks of mentors and experts.