Starting a spin-off company
The establishment of spin-off companies is increasingly becoming a key mechanism of technology transfer.
Spin-offs are start-up companies whose main activities are based on the formal transfer of research results originating from the university or university college. This transfer can take different forms (e.g. a license agreement or share capital participation) depending on the specific case. In recent years, about 30 of these start-up companies have been formed from within the Vrije Universiteit Brussel. A privileged relationship between a lab and a spin-off company is beneficial to the growth of the company, and certainly in its early stages. These agreements can refer, for instance, to rights on future results generated in the lab, the use of equipment and technical support, and the financial conditions for these facilities.
Setting up a spin-off is an iterative process, during which one has to constantly (re-)evaluate earlier decisions based on new information. Nevertheless, some fundamental steps have to be taken and intermediary milestones reached in order to successfully progress towards incorporation, as depicted in the figure below.
If you’re interested in establishing a spin-off, contact VUB TechTransfer to talk about your idea. It is an adventurous and complex process, during which you’ll need the support and advice of as many skilled professionals as possible.
Drop by @ VUB TechTransfer: Every researcher who is considering a spin-off is welcome, even if the project is just at an idea stage. VUB TechTransfer loves to act as a sounding board even at the very beginning of the process. Just send an email for an appointment.
Know thy business: It is not sufficient to have a unique technology. Being a business implies that you produce something for which people are willing to pay. Stop thinking only about technology and start asking: Who are our customers? What is their problem? How do they solve their problem today? Why is our solution better? Many more questions will need to be answered as we move along.
Know thyself: Entrepreneurship is not for the timid. It will require drive, intelligence, perseverance, willingness to learn, nerves of steel... But it is worth it.
Team up: Researchers must be aware of the fact that starting a spin-off requires a far wider skill set than is traditionally needed in research environments: business strategy, finance, sales and marketing, human resource management, negotiation skills, to name but a few. Most often a team of people from varied backgrounds (scientific, business) is required to bring together the required skill-set.
Get business training, now! If you are a science/engineering researcher you will need some business training. Do it as soon as possible, to widen your horizons early on. The VUB offers a wide variety of educational programmes on entrepreneurship. VUB TechTransfer strongly encourages potential spin-off entrepreneurs to (have) follow(ed) some form of business training.
VUB TechTransfer and you: VUB TechTransfer is there to help you thoughout the process of starting up a venture. But that is where we stop. You and your team will need to make it effectively happen: write the business plan,get the funding, run the business... In collaboration with the educational team "Technology Entrepreneurship" VUB TechTransfer organizes yearly "(Advanced) Starter Seminars" aimed at introducing business and entrepreneurship to young professionals. During 3-hour evening sessions in the first semester students and researchers are introduced to the main dimensions of entrepreneurship: defining a viable strategy in a complex business world, finance, marketing, IP rights, HR... Recent graduates may have followed this programme during their studies, as it is now part of a range of Master programs at the VUB.
Funding a start-up is yet another challenge entrepreneurs will face. VUB TechTransfer can show the way to different funding schemes offered by public authorities and commercial investors.
The aim of the “LAUNCH” programme is to turn scientific research results into concise applications through start-up businesses in the Brussels Capital Region. Every project’s finality is the economic valorization of research results by finetuning and launching a marketproof product, procedure or service. Support lasts for two years and can be renewed for one year. During the first two years, financial support covers the researcher’s salary, working costs, education and business support. During the third year additional funding is foreseen for economic assistance. More information on the Innoviris website.
VLAIO "Innovation Mandates" (Innovatiemandaten)
VLAIO (Agentschap Innoveren en Ondernemen) Innovation Mandates allow experienced, high-level researchers to significantly contribute to the industrial valorization of scientifc research results. Both the relevance of the project for Flanders’ economic tissue and the candidates’ insights into valorization matters are crucial. Innovation mandates provide support to postdoctoral researchers who wish to deploy active efforts to achieve the effective transfer, the exploitation and the utilisation of their research findings, either through a collaboration with an existing company, or a new spin-off company to be established. More information on the website.
Depending on the required amount (which itself depends on the planned activities), one can choose from various sources of funding:
- the so-called 3F’s: family, fools & friends;
- Business Angels;
- venture capitalists;
- interuniversity Qbic Fund (VUB, UGent, UAntwerpen);
- financial institutions;
- government initiatives.
By systematically providing support to research with economic potential as well as encouraging entrepreneurship within the university, the Vrije Universiteit Brussel can currently pride itself on about 30 spin-off companies, in a variety of sectors.
- GIELEN, Frank. 2007. “Financieringsmechanismen voor starters”.
- NDONZUAU, Frédéric N. et al. 2002. “A stage model of academic spin-off creation”. Technovation.
- RASMUSSEN, Einar. 2004. “The university spin-off process”. NCSB 2004 Conference.
- RICH, Stanley R. and GUMPERT, David E. 1985. “How to write a business plan”. Harvard Business Review.
- SHANE, Scott. 2004. Academic Entrepreneurship. University Spinoffs and Wealth Creation. Edward Elgar Publishing Limited.
- U.S. Department of Energy. Industrial Technologies Program. 2007. “Stage Gate Innovation Management Guidelines (V. 1.3)”.
- VAN DUN, Paul. 2009. “Spinning out in Leuven”. Presentation at BioSCENTer (29 April 2009).