1.
How much Equity Universities
take in Start-ups from IP
Licensing?
Historical data
Hervé Lebret
November 2013

2.
NB: this was not an easy exercise and I would not claim it is mistake-free.
You should read it as indicative only, hopefully it is accurate!
Indirectly related with Equity sharing through 200+ start-ups - October 2013
www.slideshare.net/lebret/startup-equity

3.
Lessons learnt
Assuming the data are accurate:
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Universities own about
 10% at creation or
 5% post –series A (average: $5M)
 Universities keep a 1-2% equity stake at exit,
 Worth a few $M (Median is $1M)
With an average of $70M VC investment,
And market value in the $1B range (Median is $300M)
Royalties are in the 1-4% range.
Median values are as important as Averages.
All this is consistent with information in Appendix

4.
Appendix
Concept & Examples
http://www.startup-book.com/2010/06/15/university-licensing-to-start-ups-part-2/

5.
General concept
“The license issue fee typically ranges from $10,000 to $50,000, but can be as high as
$250,000 for an especially promising technology that is close to market. Royalty rates
are typically 2% to 5% but can go as high as 15%.” […]
“Recently, licensing managers have begun to take equity in start-up companies in
combination with, or in place of, license issue fees or royalties. In a typical arrangement
the university takes a 5% equity position in the company in place of the license issue
fee.”

6.
More considerations
http://www.techmonitor.net/tm/images/d/de/04may_jun_sf7.pdf

7.
Stanford University
http://otl.stanford.edu/about/brainstorm/1203_equity.html

8.
Carnegie Mellon

9.
Massachusetts Institute of Technology
MIT Typical Terms
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Exclusive
Field of Use: Limited
License Issue Fee: $25 - $100K
Royalty: 3-5%
Minimum annual royalty: escalates over time
Equity: 5% after significant funding
Patent expense reimbursement
http://acscinf.org/docs/meetings/234nm/presentations/234nm62.ppt

10.
Caltech