the birth of a SPINOFF
part 1: an introduction
NOVEMBER 2020
by Giammarco Pacifico, Marta Gaia Zanchi
Since you are reading this Medium publication, you are most probably the kind of person who has always wanted to have an impact on the world. Chances are you have considered becoming a scientist or an engineer working on cutting edge research and development: probably not the most lucrative career in the eyes of your younger self but one that has the potential to truly change the world through scientific discovery and meaningful engineering innovation.
Positive change, unfortunately, is not an inevitable by-product of scientific discovery.
All too often we hear stories of academic research falling short of achieving true utility in society. Patents are written, and sometimes, granted. Lists of publications become pages long. Scientific posters win prestigious awards. All along, those much-desired societal impact outcomes that fueled long years spent in the lab in the first place, remain at best a hope for the future and mostly outside the control of their original researchers.
Not many years ago, scientists were considered unsuited to found and run businesses because their training lacked commercialization skills. Their technologies, seen as powerful hammers for nails that are nowhere in sight. Venture Capitalists that fund high-risk, high-return businesses mostly shared that view; a majority of firms, especially the European ones, did not see early-stage science-based start-ups as an attractive option, simply because the risk-return equation was too hard to compute. There are more predictable and safer ways to make “some” money. In their defense, if navigating science from the inside is difficult, it’s even harder to do it from the outside. The job is not for the faint of heart.
But these misconceptions are starting to fade as more and more scientists have proven able to develop great business skills, coupled with mission-driven attitudes and a deep awareness of society’s biggest problems. Thanks to the rise of countless entrepreneurial programs within tech hubs, scientists also feel more confident to fund their own company or work for a startup.
A 2019 report stated that 75% of academic researchers increased their interest in entrepreneurship within the last 12 months. Attesting this shift, the number of investments in universities’ spinoffs in Europe has gone from 179 deals in 2015 to 335 in 2019 and the overall invested capital has increased by 33% over the same period.
As further evidence of change, the percentage of university spinoffs with respect to the total number of newly created ventures is on the rise. For example, in 2016, only 18% of the Suisse companies came from universities, while in 2019 45% of all the Suisse startups were linked to the two federal universities (ETHZ and EPFL).
Another example is the United Kingdom, where, in 2016 less than 4 % of companies came from research centers, while today 1 student out of 4 runs or plans to start a company, with 70% of them being postgraduates. Meanwhile, the turnover of active spin-off companies from UK universities has quadrupled from £466m in 2002/2003 to £1.84bn in 2017.
Although many tech ecosystems are becoming more supportive and are creating several incentives to foster entrepreneurship from academia, building a startup remains an incredibly hard challenge, that requires a great deal of stamina and relentlessness. But scientists have always been familiar with playing against the odds, one small experiment after the other. So we set out to learn more about how this happens, by speaking with a number of scientists turned entrepreneurs. It just so happens that, at Nina Capital, we know quite a few of these amazing individuals.
We are proud to support brave founders who are applying their own academic discoveries to address compelling needs and change healthcare for good. We know that something remarkable happens when visionary scientists apply the full spectrum of their talents to take the wheel of the process for transforming an academic breakthrough into something that benefits the world. And we wanted to share these stories with you.
Look out for our upcoming posts, in which we explain how turning the next game-changing technology from a lab into a high-impact product available to men and women everywhere has always been the result of a mix of domain knowledge, intellectual curiosity, gut feeling, and being in the right place at the right time, equipped with the right mentors and role models.