Currently, OSI looks for innovation from the Math, Physical, Life Sciences, Medical Sciences, Computer Sciences and Engineering divisions of Oxford University.
It’s never too early to reach out. In most cases, we’re a spinout’s first investor – and often we meet before a business plan has been written or a management team has been assembled. Reach out even if you’re not sure that your idea is fully polished – we’re ready to help.
We’re eager to hear from academics, post docs, PhDs and undergrads at or connected to Oxford University.
Engaging is as easy as reaching out, and one of our principals will be happy to meet with you over coffee or at the pub.
Our focus is on world-beating intellectual property that can demonstrate a sustainable competitive advantage. A good indication of sustainability is platform potential – IP that can extend beyond single product.
Our spinouts tend to cluster into Biotech, Cleantech, Healthcare and Technology.
If you have a vision for the future that fits outside these categories, we still want to hear from you.
It’s common that at a spinouts’ earliest stages, the founders might not have a clear idea of how to acquire customers or navigate a particularly complex aspect of operational development. Our team works very closely with the spinouts, and when we don’t have an answer, we tap our our robust network of investors, academics, industrialists and service providers that will.
We use our network to give you access to the right people at the right time – whether that is an advisor, investor, subject matter expert, potential board member or customer.
Our investor-base has been selected not just for their ability to provide financial support to businesses, but also operational and strategic assistance. We have strong investors from many sectors and geographies and their insights should prove invaluable to our companies.
Businesses are built by people. We’re in the process of setting up an aggregated job board with job opportunities throughout our portfolio.
Our companies sit across a broad range of disciplines and industries and stages, and we help them find advisors. If you’d like to learn more about advisory and due diligence opportunities, please fill out this short form and we’ll be in touch.
Our capital-base is deliberately large and in a company structure rather than a fund structure. This permanent capital base facilitates the patience we need to let our investments mature.
This also means that, assuming corporate development is proceeding well, we can provide spinouts access to future capital. We hope that this knowledge will both empower entrepreneurs to aim for truly world-changing impact but also allow their day-to-day focus to be on building their business instead of fundraising.
Our investments are catered to match the specific needs of each company.
So far, we have invested £100k – £10mn but expect to invest multiples of this in our most successful projects.
Having a large capital base means we don’t have divestment requirements and will manage positions to maximise value. We believe that many companies seek access to broad capital markets at too early a stage but ultimately such independence is often demanded.
This will vary in each case, depending on the needs of each company. OUI work with the founding academics to negotiate these terms.
We want our academic partners to be aligned with our investors and are committed to ensuring a fair stake is held by the IP generators. As part of this, we favour ordinary shares, not preferences to make investments in companies. While other investors may take preferred shares – entitling them to fixed dividends and certain rights that aren’t shared by founders and others – we prefer to align ourselves for the long-term.
In addition, we strongly believe that OU’s stake in spin-outs is both fair and an essential part of the ecosystem’s strength. We will not invest in any business where we feel that stake has been unduly diminished.
OSI currently does transitional and seed rounds, with follow-on funding (Series A) reserved for companies we’ve seeded or, in exceptional circumstances, previous OU spinouts.
We tend to lead our investments because we value the impact an active lead investor can make. We like to dedicate ourselves to building with the founding team.
Similarly, in follow-on rounds, we prefer to lead as this enables us to dedicate the resources required to maximize the impact of a successful investment.
That said, we fully recognise that other funders can improve businesses through strategic knowledge and insights. We will always be willing to invest alongside other partners as long as they add to the business outcome and share our patience and focus.
While OSI is in partnership with OU it has no exclusive rights to provide capital to new businesses. We believe this approach is essential for a thriving ecosystem and anticipate, with our success, competition to invest to increase.
We have to earn our right to partner with business ideas. Though we feel our structure and capital-base position us well for this, we know that our role within the ecosystem depends on investing wisely and constructively over time.
Given this, there will be instances where companies are successful despite OSI not having funded them. We welcome that reality, though we will continue to strive to spotting them with better accuracy.
Academics or entrepreneurs should not be dispirited if it doesn’t work out with OSI. OUI work with academics to ensure they understand the full range of options available and provide expert advice both in dealing with OSI and other investors.
We want to be actively involved in developing businesses. Based on that desire and the range of opportunities that we typically see, it will be very unusual for us to invest initially in later-stage opportunities.
‘Failure’ in some cases is inevitable. Like academic work, lots of good business ideas turn out to require more iterations than expected or simply turn out to be ‘learning experiences’ for a better idea in the future. While we are committed to managing this process openly and transparently, it is important to recognise these situations objectively and promptly if capital and time overall are to be used optimally.
In practice, each of these situations will be slightly different, but we want to avoid the stigma of failure in all cases. To build an ecosystem of intelligent risk-taking, the ‘fear of failure’ has to be minimised. In our view, this is best done by accepting and learning from it rather than denying its possibility.
We are ready to work with academics multiple times on occasions and will not worry at all if previous investment propositions have proved unsuccessful.
OUI is a division of OU that is responsible for ensuring that IP coming out of the university is handled properly and that the interests of academics are looked after during the process of commercialization. OSI works closely with OUI, investing in the spinout companies built on this IP, bringing forward a strong financial and business network to support them.
There are several principals and a process used by the University to guide an equity split for emerging spinouts, which you can read in detail here. In general, when a spinout uses “intellectual property generated within the University by members of the University and with a broad dependence upon the University environment, and the spinout has developed with University practical support” the equity split is 50:50 University:researchers, before dilution from any third party investment.
There are, of course, exceptions and a wide range of possible circumstances for any new business. These considerations are part of the process for determining equity.
For OSI, our ownership stake reflects our commitment to dedicate time and resources to helping founders build the spinout.
A start-up is a business, usually carried on through a limited company, that has just started-up. A spin-out will look very similar but the crucial difference is that a spin-out won’t just be owned by its founder(s): it will also have a minority shareholder which is quite often a university or other higher educational institution.