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What’s a fair share? The LifeScience Foundation and research institutes establish framework for dealing with spin-offs

Should public research institutes and universities receive equity in start-ups founded to commercialize their intellectual property? And if so, how much? These questions are often hotly debated during the founding of start-ups, costing a huge amount of time, and often resulting in a lot of bad feeling. Together with a number of research institutes, the LifeScience Foundation has therefore developed a position paper that clarifies these questions for the signatories, defining a framework and creating transparency. Thirteen institutes have already signed the paper, including a number who are not members of the foundation.


The signatories commit to the following in their dealings with start-ups:
 

  • Start-ups will be actively encouraged and supported
    Here the goal of transferring inventions into applications for the benefit of society is paramount, not the support of individuals. An institute can decide on other forms of utilization, if these appear to be more promising.
     
  • Shareholdings of 10 to 20% are appropriate
    Combined with licensing conditions that are market conform and optimized for start-ups, dilutable minority shareholdings create fair and legally sound starting conditions. They comply with international best practice.
     
  • Research institutes and universities with equity in start-ups need access to professional investment management
    Research institutes must undertake to fulfil their responsibilities as shareholders, including being able to act quickly and competently in the event of a further financing round or sale. This task may also be assigned to a service provider.
     

Details can be found in the position paper, which can be downloaded here:  
 

Read the position paper (available in German only)