OSE Response to Treasury's Independent Review of University Spinouts

As a company focused on building transformational businesses out of Oxford University, we welcome the findings of the Treasury’s Independent Review of University Spinouts. The review comes at a critical time where the UK’s spinout policies have the potential to accelerate the country’s ambition to become a global science superpower. By supporting the growth and success of spinout companies, we all have the potential to drive societal impact, transform lives globally, and fuel economic growth.

At OSE, we have seen firsthand the key ingredients it takes to build a thriving spinout ecosystem and are encouraged by the continued collaboration between government, public institutions, and the private sector to get this right.

Specifically, we are supportive and agree with recommendations in the report that call for:

Innovation friendly university policies

  • We see a huge benefit in universities adopting policies to encourage innovation and are pleased that the report recognises the vital role of Tech Transfer Offices (TTO) in creating successful commercial spinouts.
  • In our own experience at Oxford University, the TTO already operates advanced policies which have improved efficiency and accelerated timelines. OSE and OUI (Oxford’s TTO) have agreed on standard terms for spinouts which include term sheets, investment documents and intellectual property licenses. When OUI works with other investors on spinouts, these terms are available as an off-the-shelf option.
  • Our team is also supportive and was engaged in the development of the University Spinout Investment Terms (USIT) Guide, a collaboration between the investment community, universities, and tech transfer offices, which provides best practices and advice for creating spinouts and is referenced as a resource in the report.

The role of university affiliated funds in helping spur spinout creation

  • We welcome the recognition of dedicated university funds to drive spinout creation, support the growth of spinout ecosystems, and increase the flow of investment into universities and their local economies.
  • Since being founded in 2015, OSE has been a key contributor in building Oxford’s innovation ecosystem. OSE has raised £853 million of capital solely dedicated to Oxford spinouts and during this time the average annual number of spinouts created has increased by three-fold and the total annual investment in Oxford spinouts ten-fold. Additionally, OSE has attracted over 200 new investors into the Oxford ecosystem and added over 55,000 sq ft of state-of-the art lab and start-up space.
  • Both Oxford University and OSE welcome new investors and additional capital into the Oxford ecosystem at all stages. We are the university’s preferred IP partner, but founders have complete freedom to determine how their IP is commercialised and to select their preferred investment partner(s).
  • At OSE, we also support our spinout founders beyond just funding. We help spinouts develop their commercial strategy, build the right management and board teams, plan and achieve business milestones, and provide access to the right startup and lab space to grow their business. We’re the first cheque in and support our company’s every step of the way to exit.

Government reforms to support scale up capital are welcome

  • OSE is an advocate for continued government focus on bringing in new capital to support the development of early-stage companies across the UK. We recently signed the Treasury-backed BVCA Investment Compact, focused on encouraging collaboration between venture capital managers and pension investors, to enable greater investment into the UK’s Science and Technology sectors.
  • We also welcome government initiatives to support early-stage companies, including through the R&D tax credit scheme, and investment schemes which attract capital to growth companies.

The report also acknowledges the need for a collective approach when it comes to making sure there is support and knowledge sharing among all university spinout ecosystems across the UK. OSE continues to engage and advocate for knowledge corridors between spinout ecosystems seen through initiatives such as our collaboration with Birmingham University’s accelerator PHTA announced earlier this year.

We look forward to continuing to build on the recommendations of the report and work alongside our partners including Oxford University, academic founders, government and the investment community to make sure we are putting the right support in place to build successful companies of the future.