Sunday 20 October 2013

University spinouts can prosper but we need long term financial instruments


Danny Fortson declares that turning university science projects into big companies is mostly impossible [Imperial needs to pick more winners, 13 October]. Yet the widely reported acquisition of Spirogen - a UCL spinout - by AstraZeneca for $460m last week shows that substantial returns to investors are possible from university research.

The lesson to be learned from such successes is that the most transformational university spinouts will need much longer than ten years of support to succeed - Spirogen for example was founded in 2001. The dearth of long term capital to support business propositions on such a timescale, reflects a market failure. 

If we are to truly realise the potential of our world class research environment, investors, inventors and entrepreneurs need access to new types of financial instruments that can facilitate, rather than constrain, our scientific innovation over a much longer time horizon. In the meantime we will need to rely on the vision and endurance of a small number of inventors and investors to buck the current trend. 

A version of this was published as a letter in the Sunday Times

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