UCLB and UCL join leading university technology transfer offices to welcome new guidelines on forming software spinout businesses

20 May 2024

USIT for Software Front Cover

A new guide designed to accelerate and support the development of a new generation of innovative software spinouts has been launched by a leading group of universities with backing of major investors. 

The University Spinout Investment Terms Software Guide (USIT) aims to simplify and shorten the process behind universities spinning out new companies, providing direction and advice on creation of software spinouts in areas such as equity share and licensing improvements. 

The guide has been welcomed by UCLB as confirmation of existing best practice. As a leader in this area, UCLB offers bespoke support for software spinouts through Portico Ventures, which helps UCL researchers to establish technology-based spinout businesses in a fast-moving ecosystem, providing an exclusive and royalty-free licence and enabling founders to retain over 90% of equity. 

A key part of any deal is the share of equity – the guide recommends that founders retain 90-95% of equity in their business with university technology transfer offices (TTOs) taking a relatively low 5% to 10% equity share. 

Welcoming the new software spinout guide Dr Anne Lane, Chief Executive of UCL Business said: “With software spinouts – more than many other spinouts that we help set up – speed is of the essence and we are proud to have been using the principles set out in the USIT Guide for some time. This clear framework will help widely in setting expectations on all sides and allow founders to do what they do best – create great software innovations that have real world impact.” 

Beneficiaries of UCLB’s Portico Ventures Programme have included Mycardium, which was founded in 2022. It developed superhuman AI for measuring the heart and a clinically-led laboratory service.

Chief Executive Officer and co-founders Professor James Moon said: “When we founded MyCardium in 2022 as a spinout from UCL after years of research, our biggest motivation was in delivering fundamental improvements in cardiac care, redefining certain diseases and making a global difference. We are now a company of circa 50 people and are growing quickly.

“To take the software and expertise to market, a commercial vehicle needed to be created, and having a straightforward process of agreeing equity splits was key to us progressing at speed and with confidence. That is why the USIT guide is so valuable – it will help the next generation of founders to strike deals with investors and universities quickly and easily.”   

UCL Vice-Provost Research, Innovation and Global Engagement Professor Geraint Rees said the new guide could benefit software spinouts at universities across the UK and abroad: “This guidance is an important next step in building on the success of last year’s industry-wide USIT guide. Once again, UCL, leading investors and other UK universities have come together to create a guide to help university entrepreneurs create transformational businesses, this time specifically in the area of software.

“This guide, along with the original one, has the potential to generate a greater number of deals and greater investment in transformative spinouts. We are determined to build on these successes and maximise the UK’s innovation potential, fulfilling the ambition for the country to become a science superpower which some of the great challenges of our time.” 

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