Hickson review on university-investor relations: Legal comment

Improving access to finance and entrepreneurship skills for university spin-outs are among the key recommendations in a new independent report into the relationships between universities and investors. 

UK Research and Innovation (UKRI) has published the report, titled Deepening university-investor links and authored by Tony Hickson, Chief Business Officer at Cancer Research UK, following his review of Britain’s research and innovation sector.  

UKRI has said it will use the report to develop a vision structured around seven key themes:

• Explore expansion of proof-of-concept and pre-seed funding.
• Work with the British Business Bank, the National Wealth Fund and institutional investors to unlock new flows of pension capital.
• Support universities to integrate entrepreneurship into their teaching and staff development
• Promote harmonised intellectual property and equity frameworks and encourage clear, published policies.
• Back shared services and sector-specific accelerators to build investor-readiness.
• Align interventions with regional strengths: innovation is everywhere, and opportunity must be too.
• Work with partnerships to expand specialist training in deeptech for investors and bring international best practice.

Nick Smee, Partner specialising in intellectual property at UK and Ireland law firm Browne Jacobson, said: “The UK’s higher education sector has for many years faced challenges with turning its world-class research activities into successful commercial ventures that can in turn drive revenue streams for the universities. 

“The Hickson Review’s recommendations appear to be sensible and, if implemented, could begin to turn the dial on spin-out activity across priority sectors outlined in the Industrial Strategy. 

“Many of these are across similar themes included in another independent review published under the previous government in November 2023, however, so it’s vital that we now see tangible steps taken at government level to drive changes in access to funding.

“Universities and founders regularly tell us one of the biggest challenges that spin-outs face is gaining access to finance from external sources to not just get ventures off the ground, but to sustain them through the scale-up phase. 

“The review identifies deeptech in particular as an area where small drip feed investment rounds harm spin-out prospects, with expansion of specialist deeptech capital access being a key recommendation.    

“In countries like the US, unlocking pension funds has increased investment flows into domestic businesses. UKRI proposes to work with the National Wealth Fund and British Business Bank, which along with government pension reform will help to unlock pension capital for spin-outs. 

“Just as the Post-16 Education and Skills White Paper says research funding will be realigned to the Industrial Strategy and encourages collaboration between universities to maximise these opportunities, a similar direction of travel looks likely for UKRI support of spin-outs, with shared technology transfer offices getting yet another mention.

“It’s therefore crucial for higher education institutions to consider how best to tap into the revised areas of support and access to investment, in order to build a successful spin-out ecosystem.”