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CU Boulder paves the way for start-ups using ‘Licensing with EASE®’ model

A detailed article on CU Boulder’s Licensing with EASE® express license agreement model appears in the November issue of Technology Transfer Tactics. To subscribe and access the complete article, or for further subscription details, click here.

Since launching its Licensing with EASE® express agreement for start-up entrepreneurs in 2018, CU Boulder has seen its number of start-ups “increase dramatically,” according to Brynmor Rees, associate vice chancellor for research & innovation and managing director of Venture Partners.

Prior to the creation of the express agreement, what existed “was case-by-case negotiation, often going through a term sheet, looking at comparable licenses on our own and in national databases and trying to figure out what a fair deal would be,” Rees recalls. “There was a lot of posturing; they’d come in low, we’d come in high.”

Depending on who was in the negotiation, he continues, it could be quite a long process. “Licenses could take one month, or they could take six months,” Rees says. “Now it can take anywhere from a week to two months.”

The university does not require that Licensing with EASE® be used for all start-up licensing, he emphasizes. “If you want to start from scratch and negotiate [you can], but this program is much faster, simpler, easier, and better for the relationship. And it frees our staff to work with the company on other things that are just as — if not more — important.”

What drove Rees and his team to develop such an agreement? “We knew what a fair deal looked like, what an investable deal looks like, and the common terms to use,” he explains. “To go over the same process and negotiate terms over and over is not very efficient. Second, founders often don’t have training in this area; there’s a real power and education imbalance that can strain the relationship and create a feeling of inequality — and leave someone open to getting bad advice or creating conflict of interest issues. Lastly, and maybe most important, as our group started to put more research and efforts into helping founders in many other ways — i.e., creating and growing companies for the accelerator, forming teams for investment capital — spending so much time on negotiations seemed to have lower value, especially when we know what the final deal should look like and so do investors. This a shortcut.”

Rees says his team benefitted from a lot of research on what other universities were doing with express licenses for start-ups. “We looked at probably a dozen or more,” he shares. “We asked if people were actually using their sites. We also worked with a local law firm that often represents our start-ups, and probably five different VC firms, and got everyone’s feedback on what a fair and investable deal was.”

Philosophically, he continues, “we wanted to create and launch a lot of start-up companies. We knew when we started that if we wanted to increase our start-ups by five-fold, it would be overly burdensome in terms personnel time [to use traditional negotiations] and that we’d rather do five times as many start-ups and spend a little less time on deal terms than be stuck on a small number of companies that potentially do not have as a good prospect of being successful.”

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