"ETH takes an equity stake in spin-offs, usually two percent." 👍 ETH Zürich now offers some of the best terms for spinoffs in Europe thanks to their new Equity and Licensing Policy. Very happy to have played a small part in this thanks to Vanessa Wood and Frank Floessel. 🇨🇭 Other European universities should take note. European deeptech would be much better off with universities creating less friction for spinoff founders, and a big way for them to create less friction is via offering healthier terms. https://lnkd.in/emdx87jp
The 2% sounds great, but if I read correctly only seems to be for the general support and brand of ETH, before IP is negotiated. ETH Zürich could you share the full details to be able to learn and compare how ETH is supporting spin-offs and startups? From the article it states “Vanessa Wood: It’s also important to note that the two percent is the baseline value. A Spin-off that needs to license or acquire intellectual property rights from ETH can do so in exchange for equity, since early-stage companies are typically cash poor”. So besides understanding if the baseline 2% is fully dilutive, what are the average equity % (or the equivalent royalty %) that ETH takes for their IP and is this standardized or an negotiation process? Great to learn from your updated procedures for the Netherlands.
Agree — valorisation and incubation are the foundation of scalable European deeptech: world-class R&D deserves world-class spin-offs: 💡 Typical terms for Dutch university spin-offs: • 📊 University equity stake: typically 5–20% at incorporation, based on IP value and support. • 📃 Licensing: access to IP via exclusive or option-to-license deals. • 💰 Royalties/milestones: sometimes in addition to equity, common in medtech/pharma. • 🤝 Founders agreement: required — clarifies academic founders’ roles, time, and governance. • 🧑🔬 Scientist-founders: often part-time or advisory due to university roles. • 🏢 Incubators & TTOs: support legal, finance, and business dev (e.g. YES!Delft, UtrechtInc, Novel-T). • 💶 Pre-seed: via university funds (e.g. UNIIQ, TTT) — ticket sizes €50–300k. TNO kennisbank sociale innovatie TU Delft | Strategic Foresight & Innovation YES!Delft Technische Universiteit Eindhoven UtrechtInc Novel-T Leiden University Centre for the Arts in Society (LUCAS) Startup Utrecht Region Amsterdam Science Park - Science & Business organisation Amsterdam Creative Entrepreneurs (ACE) Collective BRAVENTURE Leiden University Medical Center Radboud University Brightlands StartupAmsterdam Techleap HighTechXL
That's very reasonable. As a founder I wouldn't even mind if it could be increased further if the startup keeps using university facilities. This way both startup and university are aligned on longer term goals
There is no way a 5% equity stake in a spinoff causes hurdles. This is a false narrative. Nor an even larger stake that’s fully dilutable straight off. I’ve seen incubators in Europe who do little more than give small six figure checks and provide guidance get way more. Personally I think a lifetime of federal research in a well stocked lab with the freeedom to spend time on whatever is interesting for years, and then when something serendipitous happens having the university quickly fund the IP… That’s worth a lot. Just because people don’t want the university to gain value doesn’t mean that’s rational. Without putting out terms, I see zero connection between equity stakes and success raising funds.
The article indicates that 2% is just a baseline and does not include any IP transfer or support. A comprehensive deal, such as those offered at Eindhoven University of Technology , will come at extra equity cost. This is also fair - university spin-offs benefit not only from research results and IP, but also from exceptional facilities and expertise, and access to talent.
I especially hate royalties and non equity that cannot be diluted. Simplicity is king. A small equity chunk 2-3% in the beginning is the best way indeed! Well done
Quote: “ETH takes an equity stake in spin-offs, usually two percent. What considerations lead to these participations? Wood: The founders of ETH Spin-offs benefit from the knowledge and experience they gain during their time working in the research team at ETH as well as from the support that ETH offers its Spin-offs.” I never understood this. If someone goes to work for UBS/Swisscom/Google/… don’t they take “the knowledge and experience they gained during their time at ETH”? But only when people take the risk of building something from scratch, then ETH benefits? If they go the more traditional and safe path not?
Transparency in the process is always appreciated!! Even in the US ecosystem which produces some fantastic university spinouts with (mostly) reasonable terms, I have heard so many stories of the negotiations taking over a year, costing founders tens of thousands in legal fees just to support discussions (let alone the license itself) and being lied to about timelines and what was negotiable or not. There are always going to be nuances to each technology that need to be honed, but having a fair, transparent starting point can accelerate this and help both parties bring more innovation to commercialization.
„European deeptech would be much better off with universities creating less friction for spinoff founders, and a big way for them to create less friction is via offering healthier terms.“ Amen to that!
I would say that depends on which country in the EU you are talking about. In Sweden, not only universities take no equity at all, they also give you all the IP of every invention you make, help you financially, as well as with business strategy, and they also sponsor your business expenses such us traveling, consultancy (IP, R&D, etc). Honestly, you want a good example on how universities should handle startups - look at Sweden. 🇸🇪 🥂