INSIGHTS / News

SETsquared is a unique enterprise partnership between the six leading research-led UK universities of Bath, Bristol, Cardiff, Exeter, Southampton and Surrey. Our mission is to turn innovation into thriving business, maximising the impact of our combined £600m research portfolio and driving social and economic impact through supporting academics, students and regional businesses.

To date, we have collectively created over 200 spin-out companies, supported over 5,000 entrepreneurs working in the most challenging fields of science and Technology, and helped businesses raise over £4bn in investment and funding.

Since SETsquared was founded over 20 years ago, multiple Government-endorsed reviews have sought to address how leading universities can optimise commercialisation and create larger numbers of more successful spin-outs.  Several studies have compared the UK environment and performance against international comparators, and most have found that in the context of our public university system, a less mature VC ecosystem and limited commercialisation resources, we are competitive with our international peers.  Nonetheless, forward-looking consortia like the SETsquared Partnership are ambitious to grow routes to market for transformative knowledge generated by our institutions.

Our pioneering hybrid incubators for spin-ins and spin-outs, Innovate UK’s ICURe programme and SETsquared’s Research England-funded Scale-Up programme have developed a very large network of companies in our R&D ecosystem, which may offer a solution to the question of equity shares which the Review has sought to address. We contend that a large, open, and vibrant market of investors may be a better solution to determining a fair price – indeed, a market price – for spin-out equity, providing more follow-on capital and fair spin-out valuations. This more liquid market would incentivise universities to spin out more businesses more easily, and this is a key part of our shared vision.

Recognising the concerns of investors and acknowledging the need for clearer, more transparent commitments concerning deal timescales is important. Translation of research and commercialisation of technology takes time, and a broad perspective is needed to understand and balance the value drivers and needs of universities, founders and investors together. For example, reductions in university equity stakes, if taken in isolation, could reduce levels of re-investment in translational research and proof of concept funding – hindering rather than supporting the growth of innovative businesses. Increasing the availability of currently low levels of translational R&D grants and investment would help us to develop more value rather than spinning out companies too early.

SETsquared is already committed to making progress in this area. To this end, we are delighted at the success of our recent collaborative bid into Research England’s Connecting Capability Fund. ‘IMPACT-IP’ is a programme designed to transform capacity and capabilities across our Tech Transfer and Commercialisation teams, including far deeper collaboration with the investment ecosystem and our regional university peers from outside of the SETsquared Partnership, developing and sharing best practice in support of the wider HE sector.

In conclusion, the SETsquared Partnership is pleased to support the current Spin-Out Review as an important step in helping us to achieve a greater impact, taking our research further and making the world a better place.

If you are from investment, professional services or University commercialisation and would like to engage in the IMPACT-IP programme to support the transformation of research and technology commercialisation.

Read the full Spin-Out Review

Find out more about IMPACT-IP