Tech Transfer eNews Blog

Negotiating VC terms doesn’t have to be a long, contentious affair


By Jesse Schwartz
Published: February 24th, 2021

A detailed article on new guidelines for university-VC term sheets and negotiations for life science start-ups appears in the January issue of Technology Transfer Tactics. To subscribe and access the full article, along with the complete guidelines – and gain access to more than 14 years of archived success strategies for TTOs — click here.

Venture capitalists and tech transfer programs should be closely aligned, since their goals are so complimentary, but that is not always the case when it comes to drafting agreements for life science start-ups. That process can lead to negotiations that are longer and more complicated than necessary, and it sometimes even gets testy between parties who should be eager to work cooperatively.

The result is often higher “transaction costs” stemming from legal bills, more person-hours devoted to the negotiation, and lost time getting a life-saving therapy to market. And there is a real chance of damaging an important relationship when things get too testy.

It doesn’t have to be that way, says Orin Herskowitz, executive director of Columbia Technology Ventures at Columbia University in New York City. If both parties can agree to certain stipulations about commonly accepted requirements, clauses, and definitions, the process can proceed in a much more efficient way that leaves everyone happier in the end, he says.

Herskowitz and his colleagues at Columbia worked with their counterparts at six other university tech transfer offices (MIT, Stanford, Yale, Duke, Johns Hopkins, and Penn) and VCs from six groups (Polaris, Atlas, 5AM, Venrock, RA Capital, and Osage University Partners) to develop a set of common principles that they say can guide negotiations to better outcomes.

“Recommendations for VC/TTO Term Sheet Structuring” provides an overview of the key issues in university life science start-up term sheets, addressing best practices for structuring certain sections such as equity, royalties, and milestones. It also covers some common points of friction around sublicensing, know-how royalties, and diligence.

A companion document, “Recommendations for VC/TTO Negotiation Process Improvements,” addresses how VCs and TTOs can structure the negotiation process to “avoid unnecessary friction, gain buy-in early, and avoid overly long and painful negotiations.” The recommendations are intended to help create “win-win outcomes” when VCs and TTOs negotiate, Herskowitz says.

The universities that worked together on these recommendations each do dozens of start-ups a year, so collectively they have quite a lot of experience in how to complete a successful agreement, Herskowitz notes. But they also have been through the negotiating process enough times to realize that, when working with venture capitalists, they were having the same conversations over and over again.

“Even if we had worked together and knew each other well over dozens of deals, there was almost this theatrical performance we had to go through in the negotiation — as if no one had ever raised the topic of equity before, or anti-dilution, or sublicensing,” Herskowitz explains. “We’d all seen this movie, but we were all pretending we hadn’t seen it before. Instead of just acknowledging that there is a common approach that worked for things in the past and saving our energy for things that don’t work, we were repeating the same conversation from the last time and ending up in the same place.”

On the other hand, when a TTO was working with investors that did not have the depth of experience found in large firms — relatively small VC funds or new investors — Herskowitz says the process of getting the start-up funded could be “torturously difficult.” Unlike the former scenario in which everyone knew the right answer but were dancing around it, funders without experience working with universities really did not have a sense of what is standard and commonly accepted, he says.

That meant every issue in the agreement was up for discussion, Herskowitz says, which greatly prolonged the process and delayed getting the life science inventions to market.

VCs reported that they experienced a similar problem when they worked with a university that did not have a lot of experience in start-up funding negotiations.

“The objective behind this was not just making our own lives easier by establishing some best practices around getting collaborative VC-funded start-ups off the ground, but also to make it easier for smaller universities and less experienced VC to get their deals done as well,” Herskowitz says.

3-months of Technology Transfer Tactics for $29

For the first time ever we’re offering a chance to try us out – and see the value of this one-of-a-kind publication for yourself – with a 3-month subscription at the incredibly low price of $29 (this offer is for new customers only). Click here for complete details.

→ No CommentsPosted under: Tech Transfer e-News

UGA launches express license to streamline start-up creation


By Jesse Schwartz
Published: February 24th, 2021

The University of Georgia (UGA) has become the latest university to launch an express-style start-up licensing program. continue reading »

→ No CommentsPosted under: Tech Transfer e-News

Building A Pitch Deck: How the University of South Carolina’s TCO Assists Innovators in Building a “Fundable” Business Story


By Jesse Schwartz
Published: February 24th, 2021

While your faculty and student inventors are confident when it comes to their invention’s usefulness or capabilities, their pitching skills are often lacking. It can be cringeworthy as a researcher excitedly tells an exasperated investor a long-winded, technology-driven story that does little to address the market need, competition, scalability, time-to-market, and other critical factors for VCs.

In short, your inventors need your guidance to break down the invention and pitch it in a consumable way that doesn’t dwell on scientific minutia, and hits the critical factors investors care most about. Clarity and market focus are key, and that’s where the TTO is invaluable.

The University of South Carolina’s Technology Commercialization Office has guided hundreds of inventors in the start-up creation process, and as part of that process they provide seasoned mentoring on pitch deck creation and presentation. Tech Transfer Central’s Distance Learning Division has tapped the leadership team at UofSC’s TCO to bring you this practical, skill-building webinar: Building A Pitch Deck: How the University of South Carolina’s TCO Assists Innovators in Building a “Fundable” Business Story, scheduled for next Wednesday, March 3rd.

For complete program and faculty details or to register, click here.

Also coming soon:

→ No CommentsPosted under: Distance Learning, Tech Transfer e-News

Study finds gender is the biggest determining factor in start-up fundraising


By Jesse Schwartz
Published: February 24th, 2021

A recent study by researchers at Santa Clara University (SCU) finds that, for start-up founders, gender has the greatest impact among factors that determine access to funding.  And, you guessed it: Women end up with the short end of the stick.

“Companies with male CEOs receive greater funding across all continents and U.S. start-up hubs compared with companies with female CEOs,” the study reports.

The researchers examined 48,000 start-ups across 20 different industries including healthcare, data, energy, advertising and gaming. According to the study, male-only teams attracted more funding in 19 of those industries.

Mixed-gender teams were also found to perform well — as long as they were led by a male CEO.

The study serves as a reality check to the assumption that start-up fundraising will grow increasingly progressive as general awareness of gender bias grows across the industry. If anything, the situation has only gotten worse, the authors argue.

“Compared with 2019, the first quarter of 2020 saw a decline in the proportion of deals made with female and mixed-gender teams and funding allocated to female teams,” says the report. “In the third quarter of 2020, funding given to female-only teams dropped to 1.8% with mixed-gender teams receiving just 11.1%.”

As a solution, the authors recommend that VC firms create mandates to invest in female-led companies, which would likely require the firms to hire women as partners and leaders.

“Investing in women-led, mixed-gender teams should allow investors to benefit from the performance boost of gender diversity, while helping to correct the long standing bias against female business leaders,” the authors write. “Investors with expertise to lead early stage deals applying such practices can further reap the benefit of early investing, receiving large equity in promising deals.”

Laura Lenz, partner at the firm OMERS Ventures, says she’s seen a few signs of positive change. Having spent more time at home because of the pandemic, some of her male colleagues have expressed a new appreciation for the dual role their wives play in both working and taking the lead at home.

“Maybe one of the enduring shifts we will see as a result of the pandemic is a more equitable split between men and women at home,” Lenz says. “In the meantime, I will do my utmost to ensure my door is always open to female founders — and in fact any under-represented founders. I’m a firm believer that being inclusive will make me a better investor and contribute to my ability to drive outsized returns.”

Source: Forbes

Empowering and Supporting Women and Underserved Populations in University Innovation and Entrepreneurship is a distance learning program featuring detailed guidance from leaders at two of the most successful university programs designed to bolster inclusiveness and diversity. Click here for details.

→ No CommentsPosted under: Tech Transfer e-News

Boston start-up based on UW and Fred Hutch research raises $70M to advance novel gene therapy


By Jesse Schwartz
Published: February 24th, 2021

A Boston-based biotech start-up has raised $70 million to commercialize a groundbreaking gene therapy for a range of conditions including cancer, autoimmune disease, and infectious diseases. continue reading »

→ No CommentsPosted under: Tech Transfer e-News

Yale student group to launch “all-inclusive” start-up incubator


By Jesse Schwartz
Published: February 24th, 2021

The Yale Entrepreneurship Society (YES), a student group focused on promoting entrepreneurship at Yale University and beyond, is launching a new project aimed at unifying the entrepreneurial community on campus.

The YES Startup Incubator will provide students with the resources needed to launch and grow start-ups. The program will offer free software programs, one-on-one mentorship from alumni in relevant industries, networking opportunities and other services.

“We’re really trying to create a sort of self-sustaining ecosystem, a really unified ecosystem of entrepreneurship at Yale,” says YES Startup Incubator lead Clark Klitenic. “There was no centralized location of resources… no clear unified community of Yalies supporting Yalies, which is ultimately what we’re setting out to do.”

The program will be open to ventures at all stages of development, from potential ideas to late-stage start-ups. According to Klitenic, it will also reach beyond the undergraduate population by engaging with the School of Medicine, Yale Law School and the School of Management, with the overall goal of becoming an “all-inclusive community” for anyone passionate about launching a business.

“We’re all about just making opportunities more accessible for students,” says Matthew Nam, YES director of internships. “We know that to break into entrepreneurship, you have to have all these skills … and maybe starting something from scratch, you don’t know where to start. So we’re really equipping students with those tools by connecting them with some alumni who will show them the ropes.”

Source: Yale News

World Benchmark Report 2019/2020: Data, Insights, and Best Practices from Business Incubators and Accelerators is now available. This new 5th Edition features 364 university, private, and corporate programs from 82 countries and 509 locations worldwide. Click here for details.

→ No CommentsPosted under: Tech Transfer e-News

U of Warwick start-up aims to transform cell storage and transportation


By Jesse Schwartz
Published: February 24th, 2021

A start-up from the University of Warwick is developing a technology that could change the way cells are stored and transported. continue reading »

→ No CommentsPosted under: Tech Transfer e-News

The Technology Transfer Book of Best Practices


By Jesse Schwartz
Published: February 24th, 2021

The Technology Transfer Book of Best Practices is a must-have 729-page resource that’s chock-full of how-to strategies and case studies covering the most critical challenges facing tech transfer professionals. It offers a cost-effective way to zero in on proven best practices in every key area impacting your TTO. With this comprehensive report you’ll boost your program’s results with critical success strategies implemented by the world’s top TTOs.

Available in both print and electronic download, The Technology Transfer Book of Best Practices is packed with over 190 detailed articles filled with tips, tactics, ideas, expert guidance, and nuts-and-bolts solutions for TTOs.

For complete details including a complete table of contents or to order, click here.

→ No CommentsPosted under: Tech Transfer e-News

Newcastle start-up raises £1M to revolutionize the way cells are grown in a lab


By Jesse Schwartz
Published: February 24th, 2021

A Newcastle University start-up aims to make it less expensive and more efficient for scientists to grow cells in a lab. continue reading »

→ No CommentsPosted under: Tech Transfer e-News

Ohio U licenses out rare earth mineral technology to American Resource Corp.


By Jesse Schwartz
Published: February 24th, 2021

Ohio University (OU) has entered into a license agreement with American Resource Corporation, a socially responsible supplier of raw materials, to advance novel technologies related to rare earth mineral processing and graphene production. continue reading »

→ No CommentsPosted under: Tech Transfer e-News

UW-Madison start-up seeks to democratize big data


By Jesse Schwartz
Published: February 24th, 2021

A startup from the University of Wisconsin (UW)-Madison has developed a platform that makes data science accessible to anyone. continue reading »

→ No CommentsPosted under: Tech Transfer e-News

Comings and Goings


By Jesse Schwartz
Published: February 24th, 2021

Judith Cone, vice chancellor for innovation, entrepreneurship and economic development at the University of North Carolina (UNC), will retire after more than a decade of service to the university.

Cone joined UNC in 2009 as special assistant to the chancellor for innovation and entrepreneurship. Since then, according to a university statement, she has helped create a strong foundation of innovation and entrepreneurship that will remain a top strategic priority at UNC after she has left office.

“Judith has distinguished herself as an invaluable leader, continuously seeking to strengthen an intentional culture of innovation and entrepreneurship on campus and in our communities,“ the statement reads. “Her leadership resulted in the first comprehensive innovation roadmap for Carolina, crafted jointly with the UNC Board of Trustees, senior leaders, alumni, faculty, staff, students and community members. This roadmap set the stage for the adoption of innovation as a key pillar in the university’s strategic framework.”

Upon Cone’s departure, UNC associate chancellor Michelle Bolas will take on additional duties in innovation, entrepreneurship and economic development while the university seeks Cone’s successor.

“Judith has built a talented team,” the university says, “and they will continue to advance the initiatives and programs that she inspired at Carolina.”

Source: WRAL TechWire

→ No CommentsPosted under: Tech Transfer e-News