Steve Brierley didn't have to negotiate intellectual property rights when he resigned from his academic position at the University of Cambridge to create a start-up. But he was still happy that he had founded his tech company there and could benefit from the broader benefits of the enterprise.
A former senior research fellow in computational mathematics, he launched Riverlane in 2016 to help correct the high level of errors made by quantum computers. Today, with 100 employees spread between Cambridge, Boston and San Francisco, it is well placed to evaluate and compare the value of the university's links to entrepreneurs.
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His experience explains why a large number of European startup hubs are based in or linked to academic centers across the continent. “The challenges are about scaling, engineering and implementation: how to turn ideas into technology,” Brierley explains. “I realized I would never be able to solve this problem in academia; We needed expertise including chip designers and engineers. Being at the heart of a field in which Cambridge is one of the leading research organizations means you are exposed to many of the best ideas.
He attributes his decision to move into business in part to advice from veterans of Cambridge's tech ecosystem – including entrepreneur and venture capitalist Hermann Hauser – as well as the wider support the university offers to start-ups.
Brierley found that he was able to hire staff, offer training courses to postdoctoral students, and receive funding from the university without excessive pressure to make a quick return on investment.
“I asked the vice president of innovation when he wanted his money back, and he said, ‘The university is 800 years old. Take your time!'' he joked.
Riverlane is an example of what Andrew Williamson, a business investor and managing partner of Cambridge Innovation Capital, calls “deep tech” or knowledge-intensive companies. These benefit in particular from co-location with strong academic centres.
“There is a growing realization that, when you think about a public UK company, the growth will come from 21st century industries: artificial intelligence, quantum computing, advanced therapeutics,” he notes.
“Typically, these startup hubs will have one or more major academic institutions working to generate intellectual property,” Williamson notes. “It's rare to see an ecosystem develop in the middle of nowhere.”
Even when technology companies like Google engage in quasi-academic research and publish papers, he points to the power of Stanford and Berkeley universities in San Francisco Bay as “anchors.”
“You need the right mix of skills and capabilities in your startup management team,” suggests Williamson. “Stem campuses provide strong technical capability combined with people who understand marketing: product development, sales and marketing, operations, supply chain, finance and regulatory issues. Our best startups have this diverse mix.
Williamson, along with Erin Tracey, vice-chancellor of the University of Oxford, published a UK government-commissioned review into startup universities last November, which called for additional funding, business training for academics, and the development of more standardized business terminology.
But the review also found that many positive conditions were already in place. Of the 620 business founders surveyed, two-thirds said they would not have gotten off the ground without IP created at universities – citing support including filing and managing patents and access to facilities and equipment.
“Universities are the centers where the most exciting and complex technologies come from,” says Ananay Aguilar, president of TenU, a network of 10 leading technology transfer teams at American and European universities. “They graduate students with knowledge. More recently, they have intentionally become ecosystem builders, providing land.” “And service providers. Then investors come.”
Comparisons with the US sometimes suggest that the commercial terms for emerging universities are less attractive in the UK. However, Aguilar points out that the differences are often misinterpreted. Although the two systems may take different approaches to dealing with equity interest, dilution requirements, or royalty payment terms, “you will generally end up at the same point.”
Although academic centres, including Cambridge, remain among the strongest places for university-linked start-ups, others have seen growth in recent years. This includes networks created between different institutions, such as SETsquared – an alliance between the universities of Bristol, Bath, Cardiff, Exeter, Southampton and Surrey.
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Andrew Rae, director of impact research and development at the University of Bristol, sees growing interest from investors. “Traditionally, you couldn't get venture capitalists out of London, but in the last five years there has been a significant movement of investors at all stages across the UK,” he says.
He points to successful startups he has nurtured at his university, including InductoSense, which detects corrosion in pipes, and Fathom, developed by a professor as a flood model, and recently acquired by reinsurer SwissRe. The university has no stake in Fathom, but it emphasizes the wider benefits to the community through the contribution of its founder, the creation of local jobs, and the wider contribution it has made to the community.
However, access to growth financing remains an obstacle. Bristol has begun investing directly in some of its startups. But Rae says the UK's biggest challenge is getting widespread support once it succeeds. “Why can't we have more investors like in the US, and why can't we keep more companies in the UK?” Asked.
Elsewhere across Europe, Williamson sees strong “deep tech” centers linked to universities in cities including Paris, Berlin and Munich. There are also centers more commonly associated with “soft technology” companies without direct technology transfer, such as at the Stockholm School of Economics.
Its SSE business laboratory, like the center in Bristol, does not typically facilitate technology transfer, both because its expertise is in business rather than science, and because Sweden has a “professor privilege” system that awards patent rights to academic developers rather than to the institution to which they belong.
Andreas Johansson, its director, says the lab's contribution is usually through coaching and mentoring potential founders among its students, although it has also started investing directly alongside external partners through a venture fund. He points to successes including his role in nurturing Klarna, the successful payment and shopping platform.
“You have to manage expectations – everyone thinks they're going to be the next unicorn,” he says, reflecting the growth in interest among students in startups. “But there are few things in life that can teach you as much as entrepreneurship. And even if they fail, as long as people come away with the entrepreneurial tools, we see that as a win.”
