After working hard for many years, saying goodbye to an H2020 project can be hard. This is especially true if you have achieved good results when you are left wondering how to expand and exploit them further. Luckily, the project doesn’t have to end with the H2020 funding. In this post, we want to go over a very special case of exploiting a project’s results: turning your project into a spin-off. We want to help those of you that are, like ourselves, within an H2020 project that is finishing and have produced some results that are close to the market.
#1: Is a spin-off the right step?
Spin-offs are one of the main paths for transferring knowledge from academia to the industrial sector. However, they are not the only way. Patents, for example, are another way of exploiting results. And, if you want to fund a company, spin-offs are only one model of company. It could be a private limited company, a start-up, a co-op… So, before launching a spin-off, you have to consider the multiple options at hand. Most Universities offer information and counselling on these topics through their Business and Transference Units. These are some of the questions you should ask yourself before continuing:
- How close is my project or technology to the market?
- The idea might work on a small scale, but… is it scalable? Does it have a market that is big enough to sustain the company?
- Who will be my clients? Who will be my investors? Who will be my partners?
- Is a spin-off the right structure for my company? Or would it be better to fund a company that is not related to the University? In this last case, am I legally allowed to do so?
However, if you want to do a first quick check, Dr Arda Isildar left a very useful checklist in his presentation “How to spin-off a research project”.
Weigh these questions carefully, draw a business plan and, if the numbers add up, go ahead!
#2: Changing the mindset: from academia to business
Although spin-off companies may come from academia, their inner workings are very different. The H2020 project Merlin (that supports researchers, SMEs and startups across Europe in getting their innovations ready to the market) organised a while ago a session in Spanish called “How to launch a spin-off in Spain and not die trying”. In it, they identified some struggles that are common for researchers that start their own spin-off. For those of you that don’t speak Spanish, we summarise here some of their points:
- Reaction times are very different between academia and the private sector. Suppliers, clients and even the workers of a spin-off are used to quicker times than those of academia.
- Think about what could go wrong and prepare for it. The experts at MERLIN have found that researchers are often overly optimistic when estimating the time needed to reach the market. Afterall, a spin-off is bringing a new technology to the market. Something that no one else has offered before. And being a pioneer comes with risks that can slow down the initial plans. So have this in mind when drawing the business plan.
- Apart from being overly optimistic about the time needed to reach the market, the experts in MERLIN highlight another common flaw: undercapitalisation —or underestimating the amount of resources needed to develop the technology. So, when asking for funding, do not sell yourself short.
All said, starting a spin-off is an adventure in and of itself. But by keeping these points in mind, you are more likely to have the amount of funding necessary to succeed.
#3 Getting the funding you need
If you are already familiarised with the H2020 environment, the European Comission also offers excellent funding sources for spin-offs. A good example is the Fast Track to Innovation (FTI) Programme for innovation ideas that need the last push before shaking up the market. However, most of the funding for spin-offs at a European level come from Flagship projects and other H2020 initiatives. To stay tuned and don’t miss an opportunity, portals like EU Start-ups gather all the information.
If you look at a local level you will be able to find incubators, accelerator platforms and science parks that offer funding, guidance and support to spin-offs. The best option in this case is to get in contact with the Transfer or Business Unit at your University or Research Centre.
We hope that you have fin these tips useful and, if you know of any other resources, please leave them in the comments!