Spin-Off types

Entrepreneur driven spin-offs

Entrepreneur driven spin-offs find their origin in entrepreneurial researchers who want to leverage a commercial interest in their research results and want to value this interest through a spin-off. Typically it involves small spin-off companies that are consultancy and service oriented, and use some university know-how that is licensed - not transferred - to the spin-off.

To lower the threshold to start up, the spin-off company will be able to use university facilities at affordable rates. Furthermore, it will be investigated if the entrepreneurs can get a temporary part-time assignment in their department. As such a bootstrap approach becomes feasible.

Typically, the university will have no stake in such companies, and the financial reward for the university will be limited to a royalty.

Entrepreneur-driven spin-offs are typically self-funded and get indirect support through preferential access to university infrastructure and part-time assignments. They often focus on consulting activities, or lab and test services.

Technology driven spin-offs

Technology driven spin-offs are based on proprietary technology of the university, in which the university has invested heavily, which is the result of technological and scientific breakthroughs that may be the result of years of basic research.

The startup of such spin-offs is usually a complex and lengthy process that requires substantial financial means. The incorporation of the startup can be proceeded by an incubation stage within the university’s research department to develop an industrial proof of concept, necessary to perform early market tests and to convince venture capitalists (VC) to invest. Such spin-off companies usually require a management team with the appropriate industrial experience to complement and to coach the often technology focused researchers/entrepreneurs.

Typically the university will give exclusive access to its technology in return for shares and/or royalties. As this type of spin-off will be VC funded, it will be exit driven, leading to economic returns for the university through its ownership stake and through royalties.