Tech Transfer eNews Blog

‘Executives into Business’ program offers pay linked to key start-up milestones

By Jesse Schwartz
Published: October 30th, 2019

Northern Accelerator — an innovative partnership among a network of universities in England’s North East — Durham, Newcastle, Northumbria and Sunderland — is driving a stepchange in research commercialization. Connecting academics and business leaders and providing funding and business support, it’s accelerating the translation of outstanding research into commercial opportunities, forming sustainable businesses and creating more and better jobs. Newcastle’s ‘Executives into Business’ program is a core contributor in those efforts.

The program addresses two key stumbling blocks often confounding university start-up creation efforts — finding quality leadership, and the related ability to secure investment.

Newcastle adopted an ‘acceptable management solutions’ policy five years ago. To spin out a business, one of the following solutions must be adopted:

  1. One of the founder academics chooses to leave the employment of the university to become CEO or equivalent of the spin-out and the university agrees that the academic has the necessary skills to be a success in that role; or
  2. The founder academics continue to pursue their academic careers together with an agreed upon (time and terms) involvement with the spinout. The university, in consultation with the academics, identifies and recruits an external CEO.

While the second option was much preferred, funding restrictions meant universities traditionally attracted executives to spin-outs through ‘sweat-equity,’ providing shares in the business for time invested, which is a viable option only for a few candidates.

In the Executives in Business program, Newcastle and its Northern Accelerator partners overcome this problem by offering the executives remuneration in addition to traditional ‘sweat equity.’ The model has proved highly successful, attracting a strong pool of candidate executives from an international base, bringing a diversity of approaches and expediting access to investment.

Under the model, financial reward is available to executives for achieving key deliverables — for example, business plans, commercial contracts, or investment secured — which de-risks their participation. Used alongside sweat equity, this has broadened the candidate pool, improving early-stage access to experienced, high-quality management, which in turn has improved investment readiness.

Through active networking, Northern Accelerator has attracted executives from beyond the region and from outside of the university innovation environment. Potential executives register their interest online via a Dynamic Purchasing System hosted by one of the partner universities. “We look for candidates to articulate their relevant experience, and they are then approved to join the ‘Executives into Business’ candidate pool,” says Roy Sandbach OBE, chair of Northern Accelerator’s Advisory Board.

When a spinout opportunity arises, it is shared with the candidate pool. Candidates can then bid for the opportunity, and applications are reviewed by a panel including tech transfer experts from the relevant university and the academic founder. Northern Accelerator’s funding allows the program to offer executives up to £30,000 in addition to shares in the business, payable on achievement of key milestones.

A detailed article on the Executives into Business program appears in the October issue of Technology Transfer Tactics. For subscription information, CLICK HERE.

Posted under: Tech Transfer e-News

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