Out of the Lab: From Academia to Business
Metta talks to Anne Roberts and Alasdair Mort, co-founders of MIME Technologies, about their startup journey and university spinout process
World-class universities in Europe and in the UK have incredible academic talent, working away at some of the world’s biggest challenges. These universities have the potential to create immensely successful spinout companies. Some of the largest sectors in the UK are pharmaceuticals, research tools, and medtech. However, due to a lacking entrepreneurial ecosystem like the one you can find in both Silicon Valley and further afield in the United States, on this side of the world, we are often discouraging academic entrepreneurship through excessive bureaucracy and unfavourable spinout terms.
Of the 116 venture capital-backed European unicorns that exist, only four are university spinouts, according to a recent Financial Times opinion piece by Nathan Benaich, General Partner at Air Street Capital. This low number reflects the lack of investor-ready startups coming from academia and that universities still have a long way to go in understanding how to best support entrepreneurship. Some argue that the commercialisation process isn’t broken and that it comes down to the nature of university research e.g. risks and regulatory hurdles.
At Metta, we’ve worked first-hand with incredible university spinouts, disrupting the aerospace sector and beyond, including UK Aerospace Accelerated portfolio company MIME Technologies, a medtech startup from the University of Aberdeen. I was delighted to sit down with co-founders Anne Roberts and Alasdair Mort to discuss their startup journey, the skills needed when moving from academia to business and what could be improved from an ecosystem perspective to ensure more spinout success.
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MIME Technologies at the University of Aberdeen
Anne and Alasdair reflected on their experience at the University of Aberdeen, a positive one, where the technology transfer office (TTO) team was always there and ready to help. The university supported the initial formation of the company, provided free access to intellectual property (IP) guidance through their patent attorneys, and funding from the commercial department at the later stages of their research, among other things. The credibility associated with the university and the network was a significant factor too.
Anne: “As we go forward, the association with the university as a university spinout has helped aspects of credibility in the early days, having early discussions with potential clients or the entrepreneurial competitions when you’re very young and trying to make that early traction, to get some cash in the door to start the company off, being associated with the university was very positive.”
The MIME team told me that the University of Aberdeen has the same share structure as the other shareholders in the business.
What can we improve in the ecosystem?
Academic founders are often faced with red tape, bureaucracy and long delays. More crucially, the lack of transparency in IP negotiations and unfair spinout terms, hinder progress. Universities in Europe and in the UK often ask for equity shares of 25 per cent upon founding, and this number can go up to 50 per cent at some institutions. Meanwhile, in the United States, the share of equity rarely goes beyond 10 per cent. Universities, that claim such a large share of the startup’s equity at its very formation, are harming the founders ability to attract talent and funding.
Anne: “One of the challenges of being a university spinout is that generally the universities tend to have a share in the company and that needs to be at the right level. It may put investors off if the university has too high a share. From MIME Technologies, we negotiated that shareholding, acceptable to both parties, and average for Scottish university spinouts.”
At a strategic level, what these soon-to-be spinout companies need from day one is commercial support. Within universities, talented academic individuals with bright ideas will have a hard time making those ideas a reality without commercially-minded members on their team that are able to drive the business forward.
How to gain business acumen
Founder mentality and resilience are key to startup success. As a founder, you have to be prepared to work long hours and pivot your business to achieve product-market fit. Besides the mindset you need when you’re starting a business, commercial know-how is one thing that can’t be overlooked. The MIME team shared the importance of understanding how the business world works and the skills they gained on the HIE Pathfinder Accelerator and the Enterprise Fellowship at the Royal Society of Edinburgh.
Alasdair: “One of the most pivotal things for us was the entrepreneurial mindset, looking at business model canvas methodology, or running lean as much as you can. We got that through the Highlands and Islands Enterprise because they ran their Pathfinder Accelerator programme […] And that was three or four months of really intense, weekly, going through every aspect of the business model canvas and thinking about the market and everything else to do with the business.”
As you spinout and move out of the lab, where should you be looking to next? Depending on what makes most sense for your startup stage, an accelerator could be the right fit. Incubators, accelerators, and startup support programmes exist to help take your business off the ground and support you through mentorship, introductions to industry and financing. The Metta team met Anne and Alasdair on the ATI Boeing Accelerator programme and we were delighted to play a small part in their journey.
Anne: “I’ve seen a massive difference in relation to the networks that we’ve created having been on the Boeing programme. That programme, specific for aviation, really, really connected to what we do. But I think, even then, we needed to come on to that programme with an agenda. For us, we wanted to finish the 12 weeks having some form of airworthiness testing that we can show clients how the product performs in the air.”
Advice from the founders
The MIME team have come a long way over the last 6 years. I asked Anne and Alasdair to share their biggest piece of advice for academic entrepreneurs that want to embark on the startup journey. What should be the top priority in the early days of starting your company?
In this episode, we talked a lot about building your team, hiring the right people for your business, and how to maintain a good co-founding relationship. Ultimately, it comes down to who you have around you.
Alasdair: “Build the team. You could have a fantastic product, lots of IP, and a fantastic kind of opportunity but if you don’t have that team around you, that is quite an eclectic team, thinking holistically about both having R&D experience but [also] the commercial stuff that’s appropriate for the stage right as a company. There’s no point having someone come in who’s had a billion dollar company before and you’re trying to work on a very kind of small scale to begin with. Mine would be — build the right team to begin with.”
The beginning of your startup journey is about learning from those who have been there before, paying attention to the feedback from investors and having an open-mind.
Anne: “Someone told me once that you need to be prepared to drink a lot of coffee, sit down and speak to people. That’s something that we did a lot of in the early days, not just in industry but also with investors. Be prepared to listen to the feedback that you’re getting from them and be prepared to absorb or even adapt, because you may start to see a pattern in what they’re saying, if they’re feeding you back the same thing, and it’s something that you haven’t got quite right in your company […] don’t be of a particular mindset that you’re going in one direction and one direction only because the startup journey is really not that, it’s like drawing a squiggle on a page, you go in every direction before you go forwards.”
Thank you to Anne and Alasdair for sharing their spinout journey on Metta Talks.
Spinout.fyi, an initiative of Air Street Capital, is an effort to crowdsource and openly publish spinout deal terms across every university. Wherever you are in the world, if you’ve gone through the spinout process, please share your experience!
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