INSIGHTS / Blog

Beyond the Golden Triangle: How SETsquared Universities are delivering spin-out excellence

Spin-outs are a hot topic at the moment – and for good reason. With the Government’s interest in them at an all-time high, spin-outs have been recognised as essential engines of growth, innovation, and economic prosperity. These companies, built on groundbreaking research and ideas born within our universities, offer a unique opportunity to transform academic excellence into tangible real-world impact.

In the Government’s quest to drive economic growth and increase GDP, spin-outs stand out as a compelling solution. The numbers speak for themselves. DealRoom and HSBC Innovation Banking reported that in the first three quarters of 2024 alone, UK spin-outs attracted £10.1bn in venture capital investment – a staggering figure for a collective that only accounts for 2.53% of the UK’s high-growth companies.

By turning cutting-edge research into market-ready products and services, spin-outs not only fuel economic growth but also foster high-value job creation, often drawing in global investment whilst cementing the UK’s reputation as a leader in innovation. However, the journey from academic discovery to scalable enterprise is far from straightforward.

The current landscape for spin-outs, while full of promise, does come with its challenges. Ensuring that the necessary services, infrastructure, and capital are in place to support these companies as they grow is a critical priority. However, these hurdles also present exciting opportunities for innovation and collaboration. UK universities are teeming with groundbreaking ideas and cutting-edge research, laying a strong foundation for impactful new ventures with the potential to deliver world-changing impact. The question we should be asking is not just how to help promising spin-outs get off the ground but how to provide them with the tools and resources to scale, thrive, and compete throughout their entire lifecycle.

The South West has fantastic opportunities, and that’s what attracts investment

Traditionally, the universities within the UK’s Golden Triangle – Oxford, Cambridge, and London – have been synonymous with spin-out success, dominating the innovation landscape for decades. However, in recent years, universities outside this cluster have been making significant strides, challenging the long-held monopoly on spin-out excellence.

At the University of Bristol, for instance, we have an impressive pipeline of spin-outs gaining traction. Cutting-edge advancements in quantum technologies and the health tech space show that Bristol’s spin-out ecosystem is flourishing, and in the last couple of years, this momentum has been further amplified by increased Government backing. Policy initiatives and funding schemes have provided crucial, whilst the University itself has stepped up its efforts to help guide entrepreneurs through the process. These successes are a real testament to the strength of regional innovation ecosystems like ours, where resources and support are combined to rival the traditional powerhouses from within the Golden Triangle.

What’s particularly exciting at the moment is the visible shift in investor behaviour. Investors are no longer focusing exclusively on the Golden Triangle for spin-out opportunities. There is a growing appetite to explore high-potential companies from across the UK, and the success stories emerging from the SETsquared universities have played a pivotal role in diversifying the investment landscape. The more successes that emerge – be it a new sustainable solution or a transformative biotech breakthrough – the more confidence in and interest the regional ecosystem generates. Success breeds success, and it’s creating a virtuous cycle that ensures a steady flow of promising spin-outs ready to scale.

Bridging the gap in training and market validation for new entrepreneurs

For our spin-outs, preparation is everything when it comes to attracting investment. A solid foundation of market validation, business planning and strategic direction is essential, and programmes the ICURe (Innovation to Commercialisation of University Research, have been instrumental in helping teams build that foundation.

ICURe’s market validation framework is key – empowering academic teams to test their ideas in real-world markets before committing to the spin-out process. It’s an extremely popular programme and has almost created a bottleneck where places on the programme are highly sought after and as a result, competitive to secure. Whilst it’s fantastic to see such high demand, it also highlights a gap: there is a need for additional training and support initiatives that complement ICURe and make market validation and venture-building activities more accessible to a broader range of prospective spin-out teams.

The need goes beyond simply replicating ICURe. Instead, the goal needs to be to expand the availability of tailored programmes that provide similar benefits, including hands-on market exploration, mentorship, and structured guidance. Many spin-out teams – particularly those new to entrepreneurship – struggle to know where and who to turn to. What’s missing, perhaps, is a streamlined, user-friendly approach to support that ensures teams know what programmes are available, how to access them, and which ones best align with their needs.

Promising developments are already underway in the social sciences sector. Programmes supported through initiatives like the Aspect Network – a national network dedicated to social sciences commercialisation – are delivering structured support tailored to shape opportunities. These programmes offer a sort of ICURe-equivalent for social sciences, arts and humanities spin-outs, providing the venture-building process needed to turn research-driven concepts into viable businesses.

That’s where the SETsquared Partnership really comes into its own. Pooling talent and resources from across the six universities, if specialist advice isn’t available at their local centre, the connections are already in place to make signposting onto another efficient and effective. This collaborative nature is not only beneficial for the company. Improved awareness trickles down into the investor community too, allowing them to keep a watchful eye over prospective new opportunities and start having those all-important conversations quicker.

The recent announcement of SETsquared’s partnership with investment firm QantX has generated a new wave of excitement across the innovation and entrepreneurial community. This collaboration introduces a proposed £300m spin-out-focused investment vehicle, which is set to transform the funding landscape for early-stage ventures in the Southern and South West region. By providing a substantial injection of patient capital, the initiative aims to address one of the most pressing challenges faced by spin-outs: access to long-term, supportive funding that allows for additional innovation and growth.

By focusing on deep tech propositions, this investment vehicle will seek to de-risk high-potential ventures for the broader investment community, encouraging more investors to engage with transformative yet capital-intensive technologies. The result is a win-win scenario: entrepreneurs gain the resources and support needed to bring their groundbreaking research to market, while investors benefit from more attractive and less risky opportunities.

Alongside this, the IMPACT-IP programme is also set to revolutionise the way that companies spin out of our universities. By introducing a comprehensive suite of standardised playbooks, templates, and resources, the programme aims to streamline the spin-out journey, removing many of the barriers that can slow progress. These carefully designed tools are intended to eliminate the often lengthy and complex negotiations that have traditionally created friction between Technology Transfer teams, investors, and founders. With the simplification of key milestones such as intellectual property (IP) agreements, licensing frameworks, and equity structures, the IMPACT-IP programme will create a more transparent, predictable, and efficient pathway for all stakeholders involved.

Advice for those soon to spin out

If you’re at the beginning of your spin-out journey, the Technology Transfer Office (TTO) or the Research Commercialisation Team should be your first port of call. These teams are instrumental in guiding researchers through the complexities of the due diligence process. Whether it’s assessing the commercial viability of your research, navigating frameworks, or connecting you with potential investors, these experts are there to ensure you’re set up for success.

The spin-out ecosystem also thrives on connections. From industry-specific events to pitch days and workshops, there is a packed calendar of opportunities to meet like-minded innovators, investors, and mentors who can help you on your journey. Attending these events isn’t just about visibility, but rather about learning from others, building partnerships, and gaining critical insights that can shape your venture’s direction.

With that, one of the most valuable resources in the spin-out journey is the experience of others. Bristol’s existing spin-out companies are a treasure trove of insights, lessons, and advice. Talking to founders who have been through the process can provide a clear understanding of what to expect, what to prioritise, and how to navigate the inevitable challenges that will arise along the way.

Get all of the insights from the discussion on the landscape for spin-outs in 2025 in our full Investment Future Insights report.

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