Best Spinout Terms of Europe Universities
For the past several weeks I’ve been digging into standard spin-out policies of UK and European university tech transfer offices (TTOs). Tl;dr - The system is broken. Rent-seeking equity grabs, hyper-opaque IP terms, and glacial negotiations are far too common. What’s become clear to me is that this much of this inefficiency stems from a simple lack of information on both sides. Founders and TTOs alike are often unaware of what today’s venture benchmarks actually look like and continue operating with an outdated view of the world. While there’s been encouraging progress recently, we’re still working from a deeply flawed baseline. At Fly Ventures, we’re heavily invested in the long-term success of the European tech ecosystem and universities play a vital role in that future. So I’ve decided to share what I’ve learned. Sunlight, after all, is the best disinfectant.
As a first step, my teammate Julian and I set out to gather TTO standards across the bulk of Europe’s top technical universities. This turned out to be more challenging than expected—largely because their terms are anything but standard. Chronic ambiguity and a “case-by-case” approach are alive and well in the hallowed halls of higher education. But we persisted, with plenty of manual sleuthing and a little help from GPT-4o Deep Research. Without further ado, here’s where the chips fell:
Top UK / EU technical universities
Methodology
For this ranking, we focused exclusively on the standard equity terms that TTOs take for their respective spin-outs. While there are several important elements in a spin-out agreement (IP exclusivity, patent reimbursement, royalties) equity is without question the biggest sticking point for early-stage investors, so we kept things simple. We also found far less publicly available information on those second-order topics—so little, in fact, that meaningful cross-university comparison wasn’t possible. To be clear, those items are important, but in my experience, they tend to be far less challenging to negotiate.
I should also add that in parallel I’ve begun collecting feedback from the VC community through an ongoing survey. While I’m not yet at critical mass, the early signal is clear—equity is the issue.
Tiers were relatively straightforward, based on the expected standard equity take at incorporation. As a tech VC, I focused on “IP light” software norms to keep the comparisons apples to apples. In general, the equity norms for IP-heavy or life science startups are about 2x those of software, which aligns with what I see across US universities. I also adjusted for relative clarity—if TTO guidance was opaque, I docked them a tier. The breakdown is as follows:
S: <5% equity
A: 5% - 10% equity
B: 10% - 15% equity
C: 15%+ equity / undisclosed terms (“case by case”)
You can find some greater detail on the standard equity norms as well as the relevant university TTO link in this spreadsheet.
Reflection
To be clear, I am not against university equity ownership. Far from it. It is unquestionable true that one of Europe’s greatest technical advantages is the strength of its university system and the talent magnet it creates. I also believe it is important to properly reward and incentivize universities for taking the kinds of technical risks that funds can’t. Without financial upside, the sustainability of the system is called into question—and that’s something no one wants.
What I take issue with is the scope of what’s being demanded as “market standard”. If any VC issued a term sheet requiring premium equity, plus licensing fees and royalties, and then took more than three months to negotiate, that fund would be radioactive in the market within a week. That’s triple dipping, and it’s wildly inappropriate. As a full-time VC, I’m in the founder service business, and these norms are anything but. That might be fine for Shark Tank / Dragon’s Den, but not startups.
If a founder makes a conscious, well informed decision to have their university take 20%+ of their company, then fair enough. But they should absolutely know how that will be received by prospective investors—and the setbacks it will create. If we want Europe to fulfill its innovation potential it starts with treating founders like founders.
This is an ongoing effort. If you think we missed or incorrectly labeled any terms please feel free to reach out and include the public-facing policy.