The UK university spinout ecosystem is flourishing, with 1,116 active companies as of January 2023.
But to further facilitate this growth, British universities should cut down on their equity stakes, a spinout review commissioned by the government advises.
According to data from Beauhurst, between 2013 and 2022, academic institutions took an average stake of 23.9%. For instance, Oxford, the UK’s top spinout generator, owns an average stake of 21.6%, while the University of Manchester and the University of Leeds own higher percentages of equity, at 30.9% and 42.3%, respectively.
The review recommended a 10% or lower stake for software spinouts, which are less IP-intensive and typically require a smaller amount of university support. For life sciences startups, it suggested a higher limit between 10-25%, while equity for hardware and engineering companies should be somewhere between the other two categories.
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