US-focussed guide on many aspects of spinout companies including planning, founding considerations, licensing and legal: University Spinout Founder's Handbook
Rundown of activities, news, resources and more in the Australian ecosystem - by Gary Visontay of Right Click Capital: Australian Startup Resources For Founders & Investors
In the context of commercialisation, spinouts and startups are both based on University IP, but the University typically holds equity in a spinout whereas a startup may have licensed the IP on purely financial terms (such as royalties and annual fees). Startup also more commonly refers to any early-stage high-growth company whether related to a University or not.
Both startups and spinouts associated with Monash (staff, researcher, student or alumni) are supported by the Generator, Monash University's central startup hub.
The University IP Policy governs revenue sharing and all revenues from commercialisation of IP are split evenly between the team of creators, the department/faculty and the University (typically a 1/3rd 1/3rd 1/3rd each) - the revenue share can be affected by joint ownership, funder rights and other factors, see full policy for details.
When a spinout company is wound up, the licence from the University will lapse with that company but the IP will still be owned by Monash. As a result, there may be opportunity for Monash Innovation to seek a new commercial partner.
Please check out the portfolio page for an up-to-date list of recent spinouts.
Spinouts are complicated, time consuming and not every technology is suited to starting a company so the decision needs to be properly assessed as part of the commercial evaluation. This will typically involve the Monash Innovation commercialisation lead, the New Ventures team, creators, external advisors and more.
The Creators of the IP can play many roles in a spinout company, from none at all, through being a passive collaborator, informal advisor, formal advisor or founder.
It is common to see a Creator take on a role such as Chief Technology Officer in a spinout, but in practice they may be involved at any level from researcher to CEO depending on the various stakeholders (such as investors) and what is right for the company.
Spinouts require significant effort on behalf of the founders, the Monash Innovation team and any other stakeholders involved to get them off the ground. It is typical for founders to work long hours and weekends in order to prove the technology, get traction in the market and raise capital to make the spinout a success.
This refers to a situation where a conflict arises for an individual between two competing interests, which are often, but not exclusively, interests of public duty versus private interests. Conflicts of interest may be reasonably perceived, potential or actual. Conflicts of interest can involve financial or non-financial interests of the staff member and the interests of a business partner or associate, family member, friend or a person who has or has had a close personal relationship with the staff member. Please ensure you follow the Monash procedure on managing COI.
Before you go and spend any time or money of registering a company based on Monash owned IP, you must first speak with Monash Innovation to understand the processes and clarify both the IP and ownership.
In addition, you should seek legal guidance to help you understand the different corporate structures in Australia, negotiate your shareholders agreement and design an appropriate constitution.
You can find a series of free templates to see what may be required here: https://www.allens.com.au/sectors-services/services/allens-accelerate/accelerate-startups/
Put simply, equity in a company ("shareholder equity") represents ownership of a share of a company (hence "shares"). In the most simple example possible: if you have 50 shares of a business with 100 shares (and no debt), you would have 50% equity.
Getting the equity split right at the beginning of the company formation is crucial to the success of a business. Please speak to a member of the Monash Innovation team for more information. If you want to understand more about the factors that go into equity allocation in startups, check out this article.
A licence agreement will be put in place to give the spinout the ability to use the IP from Monash. There are numerous terms in this licence that can also include equity. The exact structure will depend on the type and value of the IP being licensed into the spinout as well as the respective contributions of the founding parties. Here's a general guide on university equity stakes in spinouts [link].