It might be a recent outcome from your research, or becoming aware of a business need that you have the skill to fulfil, or a chance discussion with a complementary-minded soul that sparks the idea. However your spinout journey begins, it’s never too early to come speak to us!
Disclosure and IP due diligence
Speak to the team about your idea
It might be a recent outcome from your research, or becoming aware of a business need that you have the skill to fulfil, or a chance discussion with a complementary-minded soul that sparks the idea. However your spinout journey begins, it’s never too early to come speak to us! You can either contact your Portico business manager in UCLB or directly submit your business idea through the dedicated form on our website. No need to pull together any advanced documentation at this point, but there are a few key points to mention when contacting us: what research/ software/ methodology your spinout idea is based on and what type of challenge your solution would tackle.
If you are not sure about the commercial viability of your idea, speak to our Ambassadors in Computer Science (discover them on our website) or come along to one of the Portico Ventures introductory events.
After an initial discussion with the Portico Ventures team, you will need to disclose the IP the spinout may require. Information on papers written on the topic, colleagues that may have contributed and the funding that has supported it will need to be covered.
We will then undertake initial due diligence to ensure we can license the IP cleanly into your company. Further information on how the IP was developed, the funding contracts you might have held while working on the technology or the IPR arrangements you established with your collaborators might be needed, so gather as much of the relevant information as you can at the start of the process. Portico Ventures aims to contact disclosing researcher-entrepreneurs within 2 weeks of their disclosure submission.
Joining Portico Ventures
Portico Ventures Key Terms
Following our IP due diligence, we will advise you of your eligibility to join Portico Ventures. We will explain to you the key terms, highlighting any important conditions in the IP licence. For example:
- Intellectual property rights: UCLB will provide an exclusive licence for the IP the new business requires to develop and sell the product/ service. The licence will not cover connected IP or IP that is developed within UCL after the granting of the licence. While the spinout will have exploitation rights, the IP will remain the property of UCLB. Any new IP and results developed by the spinout based on the UCLB IP shall be owned by the spinout; and it will also be entitled to apply on its own for patent protection anywhere in the world.
- Consideration: In exchange for the licence, UCLB should be allotted shares representing 6% of the shareholding, non-dilutable through the first £million of funding. A further minimum of 10% of the shareholding should be allocated to an option pool to incentivise initial employees and non-execs.
- Confidentiality: both sides will be bound by confidentiality obligations and will not be permitted to disclose the licensed IP to third parties (including as part of patent applications) without express approval of the other party.
- Commercialisation: the spinout will be under an obligation to exploit the licensed IP following a list of agreed milestones.
- Insurance: the spinout will also be required to take out an insurance policy and maintain it during the term of the licence plus 6 years after the agreement’s end. This is to protect the spinout, its customers and the University from any liability resulting from your business activities.
Once accepted on the Portico Ventures Programme, your company will be an official UCL spinout. This comes with the added benefit of being able to introduce yourself as a spinout and being promoted through UCLB channels.
Pre-business plan work
Proof of Concept (PoC)
Before you take your idea to users or investors, it is typical to prove your research idea can be done practically by progressing to a proof of concept. This crucial step will allow you to transform your lab work, algorithms or datasets into a product/service that demonstrates how your idea would work in practice. For example, you could create a version of a ML-enabled platform, software based on algorithms you have developed or a machine vision application for a specific industrial need. The goal of the PoC is to demonstrate that your idea works in the real world, outside of a lab environment.
Depending on your specific field and application, a PoC might require considerable amounts of time and funding. If you have undertaken some preliminary work in the field, leverage it for either grant or private early-stage funding. Potential sources for this include UCL pre-commercialisation grants and PoC funding from the UCL Technology Fund. The funds could be used for (further) technical development, but also to consider initial business modelling and market application.
While you might have a good idea for a product/service, you will need to make sure that there is a market for it. Your solution should, from the beginning, respond to a clear need through mechanisms that fit the realities of its intended users. For example, any application trying to improve financial trading will have to take into account the regulatory context, as well as the complexities of the IT infrastructure and decision-making processes in this industry. Moreover, the benefits your idea can realistically bring need to be greater than the money and effort that would need to be invested to develop and deploy your solution. Also keep in mind the need for the solution to work alongside/ integrate with legacy systems, which can slow down deployment considerably. Finally, consider the impact of your solution on other people in the customer organisation, who may be resistant to the change your product may represent for their existing way of working and how you can prepare for such resistance.
A market study can be a great way to understand whether a) there is a market for your product/service, b) whether it is large enough, c) what its characteristics and key requirements are, d) who your customers and e) who your competitors would be. These are key points that your business plan will need to address and that any potential investors, co-founders or acquirers will need to know before supporting your initiative. Market studies require expert knowledge of the industry you target, so it is advisable to either secure an expert through your own network or others. UCLB has a good network of market experts and experience in managing market study contracts, so we can advise you on how to scope and manage these contracts. Furthermore, funding for market studies could be secured through UCL Innovation and Enterprise grants. However you decide to secure further industry knowledge, come speak to us about non-disclosure agreements if your conversations are likely to touch upon the inner workings of your technology.
A successful spinout will require excellent scientific knowledge and technical skills, but also a specialist understanding of the industry(ies) targeted, experience with product development, sales, business and financial skills, networks in, or at least an understanding of, the routes into supply chains and the investor community. While some of these skills could be sourced within your research team, you should also consider external (non-academic) options.
Researcher-entrepreneurs may find it beneficial to partner with co-founders from the world of business, often from the specific industry their product would target. This would strengthen the spinout by complementing the skillset through the addition of product management and financial knowledge, while also freeing up the researcher’s time for higher value-add activities. Investors look more favourably on a diverse executive team over a team made up exclusively of highly specialised academics.
Portico Ventures could support you in configuring a founding team structure; you can also explore industry networking events or past research collaborations with businesses when considering co-founders or early team members.