University spinout fundraising: a simple readiness guide

Map the asset before you make a pitch

Start an IP map. IP means rights in ideas and work. List patents, know-how, data, code, materials, and marks that matter.

Name the owner of each item. Add the source file, people who made it, fund link, and open point.

Do not say the firm owns an item until a record shows this.

The UK review calls IP checks an early step in a spinout. It also says you should record checks on know-how before a licence. [1]

School rules can change the result. Michigan says work made with its funds or tools often goes to the school. This is one school rule, not a world rule. Read your own rules and deals. [4]

• Asset: patent, know-how, code, data, material, or mark.
• Owner: firm, school, founder, or other party.
• Proof: disclosure, patent file, deal, or source record.
• Open point: the question, owner, and due date.

Make the licence easy to read

Put the signed licence, option, or term sheet in the data room. Add a one-page summary. An option is not a signed licence. Say which you have.

At Stanford, a startup plan can cover the product, market, time, team, funds, and other means. The plan helps set licence terms. [2]

Terms can cover use, exclusivity, fees, shares, royalties, goals, and patent costs. Your terms may differ. These are good points for your summary. [2]

Show the limits too. Say what the firm may make, use, sell, or sublicense. Say where and for how long. Get legal help on terms that affect the raise.

• Document status and signing date.
• Rights given and limits on those rights.
• Cash, shares, royalties, goals, and patent-cost duties.
• Next approval, due date, or condition.

Plan the people and the conflict review

A founder may also teach, do research, advise, or work for a school. This can cause a conflict. A conflict is not bad conduct. It is a fact to share and manage.

Make a role sheet. Give each person’s firm job, school job, time split, pay, shares, lab use, and approval path. Keep school work and firm work clear.

Stanford tells the school when an inventor is a founder, share owner, or adviser. Its conflict review runs with the licence talks. It must end before a licence is signed. [2]

Your school may use a new process. Do not say a review will pass or end on a set date. Show the state now and the next step.

• Person and both roles.
• Firm time, school time, and outside work.
• Shares, pay, and use of school space or tools.
• Disclosure date, review owner, and next decision date.

Raise for the next proof step

Do not ask investors to pay for a vague move from lab to market. Name the one risk the round will test. It may be build work, safety, a pilot, a rule path, or buyer need.

Tie the use of funds to the test. State the job, cost range, owner, result, and date. Put the cash view and cap table with it. A cap table is the list of share owners.

An NSF SBIR or STTR bid has set rules. The firm must meet rules on size, ownership, work site, and project lead. STTR also needs a research partner and set budget shares. These rules are for the scheme, not all raises. [3]

Investors can ask: what new fact will this cash bring? Give the answer, saved proof, and any limit. This may help a talk. It does not get you funds.

• Risk left: the point not yet proved.
• Work: the test or build that addresses it.
• Proof: result, file, or choice to save.
• Limit: what the result will not prove.