Executives into business

University spin-outs, like other high tech start-ups, face numerous challenges. One critical success factor is quality of management, not least because this is crucial in securing further investment. Recognising this challenge, Newcastle University adopted an ‘acceptable management solutions’ policy five years ago. To spin out a business, one of the following solutions had to be adopted:

• One of the founder academics chooses to leave the employment of the university to become CEO or equivalent of the spin-out and the university agrees that the academic has the necessary skills to be a success in that role

or

• The founder academics continue to pursue their academic careers together with an agreed (time and terms) involvement with the spin-out, and the university, in full consultation with the academics, identifies and recruits an external CEO to run the business.

While the second option was much preferred, funding restrictions meant universities traditionally attracted executives to spin-outs through ‘sweat-equity’, providing shares in the business for time invested, which is viable only for a few candidates.
Northern Accelerator overcomes this challenge of attracting experienced, talented business executives and does so during the pre-incorporation phase, allowing them to work with the university and academic founders to set up a strong viable business. Northern Accelerator offers executives remuneration in addition to traditional ‘sweat equity’ (shares in the business for time invested). This has broadened the candidate pool, improving early-stage access to experienced, high-quality management, which in turn has improved investment readiness.

Please speak to your university’s technology transfer team in the first instance. 

A typical application might be structured around the appointed Executive undertaking development of the business plan, securing investment and commercial contracts. However there is flexibility to consider other activities related to incorporation and future success of spin-out companies.

To comply with funding requirements, Newcastle University has developed a Dynamic Purchasing System (DPS) framework which potential executives need to register on. Once registered they become part of a pool of candidates. The DPS is open continuously for new candidates to join and Newcastle University procurement team can provide support to help candidates work through the application process.
When an opportunity arises, i.e. a spin-out is ready for a CEO to take the business forward, the opportunity is shared with the candidate pool as a tender. Candidates can then bid for the opportunity and applications are reviewed by a panel including technology transfer experts from the relevant university and the academic founder. This allows the university to select and appoint the most appropriate candidate.

To find out more and join our candidate pool, please email northern.accelerator@durham.ac.uk 

We’re keen to develop a strong pool of candidates with as diverse a range of backgrounds and experience as possible, therefore we’re not prescriptive about the experience you need to have at the stage you register for the pool. We look for candidates to articulate their skills and experience that they feel would make them a strong CEO to lead a start-up spin-out business.
Tenders are issued for specific opportunities to all candidates in the pool, and at that stage the tender documentation will clearly state any specific experience required for that opportunity, for example any particular industry knowledge or experience.

Northern Accelerator’s funding from the European Regional Development Fund and Research England’s Connecting Capability Fund allows us to offer executives up to £30,000 in addition to shares in the business.
Executives are offered remuneration in addition to traditional sweat equity. The amount of equity offered to the incoming CEO is negotiated and will differ in individual cases.
Executives are paid on delivery of key milestones. While this is negotiated in each individual case, milestones typically include production of a viable business model, university approval, completion of spin-out legals and raising seed capital.

Northern Accelerator universities have a strong innovation pipeline, with much untapped potential. The business opportunities that arise are not only commercially exciting, but have the potential to make a real impact on our society. Executives therefore have access to unique opportunities based on world-class research, and those opportunities have already passed the due diligence required to get university approval as a potential spin-out.
Executives will also have access to Northern Accelerator’s innovation assessment support, as well as a strong network of technology transfer representatives and investment opportunities.

Talented business executives bring the spin-out enhanced access to networks, business experience and investment routes, and as your Northern Accelerator executive will be recruited during the pre-incorporation phase, they’ll work closely with you to set up a strong and viable business from the outset.
For academics, a Northern Accelerator executive brings added support to realise a real-world societal and commercial impact from your research.