Find a template

• Customers, end users and other relevant market players
• Problem or opportunity
• Current solutions
• Estimated market size.

• Description of the proposed product or service
• Value of the proposed product or service compared to existing alternatives
• University IP
• What University IP is proposed to be used in this solution?
• In what ways is the IP protected?

• What is the current readiness level of the technology? Have you proved the concept in the lab? Outside the lab? Have you built a prototype?

This assessment of the technology status should include objective evidence from an expert who isn’t involved in the research or the proposed start-up.

The roadmap to a saleable product or service could include milestones like:

• Proof of concept: measurable proof that your solution solves the target problem
• Proof of value: measurable proof, validated by customers, that your solution solves the target problem better than existing solutions
• Field trial: measurable proof that your solution solves the target problem better than existing solutions in the environment the customer will use it in.

Each milestone should include:

• Target timetable
• Measurable deliverables: what will you deliver to whom?
• Description of work
• Estimated scope and cost of work:
  • Labour cost
  • Material and other costs
• What part of this work will be done:
  • Within the University
  • By the start-up
  • By other parties
• Who will fund this work?
• Who will do the work?
• If new people are needed, how will you identify and recruit these people?
• What are the risks to reaching each milestone?
• What will you do to manage and reduce these risks?

A concise pitch, of the kind described in Find funding, based on the rest of the business plan.

• Customers
• Key players
• Problem or opportunity
• Current solutions
• Estimated market size and five-year forecast
• Market dynamics
• Value chain.

• Description of the proposed product or service
• Value of the proposed product or service compared with existing alternatives
• Validation of your solution’s value (for example, through customer interviews).

• Target customers (and/or acquirers)
• Channel to market and/or acquirers
• Market-share goals and how you will achieve them.

A list of the founders and planned key employees.

List the assumptions implicit in the five-year financial plan, including:

• Product development costs
• Other costs
• Team size
• Market share
• Product price, volume and cost
• Investment required
• Valuation and exit strategy (how will investors get their money back?).

Usually in spreadsheet form and covering five years, the financial plan details:

• Quarter-by-quarter and year-by-year analyses of expected costs and income
• Sources of expenses
• Sources of income: revenue, grants, investment.

The preamble lists the parties to the license agreement. These are:

• the licensor – the University, operating through its commercialisation office or a commercialisation entity
• the licensee – the start-up.

It broadly states each party’s intentions in entering into the agreement.

Defines any terms that have a specific meaning in the remainder of the document.

The key terms of the license rights we give to the start-up, for example:

• Exclusivity
• Territories: worldwide, or in specific, listed countries
• Field and application
• Term: the duration of the license
• Sub-license rights for the start-up, if any.

The University usually takes ownership of enhancements made to the University’s IP by the start-up that can only be used in conjunction with the University’s original (background) IP. We might agree to license these enhancements to the start-up under the same terms as the background IP.

What each party must do before granting the license. This could include:

• Formal incorporation of the start-up
• Formal University approval of the license
• Formal agreement with us about the proposed founders’ participation in the start-up. This includes approval of a conflict-of-interest management plan
• Securing specific funding by the start-up.

What return we will receive from the start-up in exchange for granting these IP rights. Includes specifying when these payments start and how often they are made.

What the start-up must achieve to maintain the license under these terms, based on the start-up’s commercialisation and business plans. Usually includes:

• market milestones
• technology development milestones
• funding milestones
• minimum revenue or royalty goals.

This section also specifies the rights we have if the minimum performance goals are not met – for example, reduction in license scope, or termination.

The start-up is usually responsible for assuming some or all of the costs maintaining the patent portfolio.

We usually give the start-up no assurance that the University’s IP is fit for purpose and does not infringe third-party IP.

The start-up usually assumes all liability for any damages resulting from commercial use of the University’s IP.

We usually want the start-up to agree to joint publicity about the formation of the start-up and its successes.

A mutual non-disclosure clause requires both parties not to disclose the other party’s confidential information (including the University’s IP) to third parties without written permission.

Other relevant terms include:

• Other aspects of the relationship between the University and the start-up. For example, joint research and development.
• In rare cases, we commit to offering the start-up a license to related IP developed by us before offering the IP to other prospective licensees. Usually, we prefer that IP like this is discussed separately.
• We may want the right to audit the start-up’s finances, to make sure that royalty payments to us are complete
• Change of ownership: we usually want to be notified if the start-up changes ownership, for example, through acquisition. We may want the right to terminate the license in the rare event that the new ownership does not align with our principles.

A schedule, or appendix, lists exactly what IP is licensed under the agreement and can include:

• Documents describing the IP – for example, patents
• Internal University reports describing un-patented knowledge
• Documents describing software.

• how much of the start-up each shareholder owns
• the process for issuing new shares
• the shareholders’ participation in the governance of the start-up.

The agreement begins by listing the shareholders, for example the founders and investors.

Any terms that have a specific meaning in the shareholder’s agreement are clearly defined.

This section defines:

• Which shareholders are members of the start-up’s Board of Directors
• What positions the founders hold
• Whether the founders remain members of the Board of Directors if their equity holding in the company becomes low as a result of cash investment
• What mechanism (if any) is used for the Board of Directors to take account of the views of shareholders who are not members of the Board of Directors.

This section defines the process for the issue of new shares, for example, in the event of more investment. It also defines the impact that the issue of new shares will have on the value of existing shares (dilution).

This section defines the process for shareholders to dispose of their shares, and what happens if a founder leaves the start-up or an existing investor decides to no longer be involved.

This section defines any rights that employees (and maybe founders) have to acquire shares in the company when they complete certain milestones, for example employment with the company for an agreed period and/or completion of agreed duties. It defines the process for this, including the process for pricing these shares.

This section defines how the proceeds are distributed if or when there is an exit, for example as an acquisition or an initial public offering. It also defines how this differs for different types of shares.

This section defines the obligations shareholders have to avoid working with, investing in or supporting other companies that could compete with the start-up.

This section defines to what extent the shareholders share in any liability that the start-up could incur. It defines the differences in liability between shareholders who are directors of the start-up and those who are not.

The capitalisation table is the heart of the shareholders’ agreement. It lists how many shares of each type are owned by each shareholder, and therefore what percentage of the company they own.

This section defines:

• Names of Directors
• Process for appointment and removal of Directors
• Directors’ remuneration
• Powers and duties of Directors in setting the direction of the company
• Chairperson of Directors
• Position held by each Director, including executive officers and company secretary.

This section defines processes for:

• making decisions about the direction of the company
• resolving disagreements
• taking, distributing and archiving minutes of Directors’ meetings.

This section defines the type and value of insurance the company must hold to protect individual directors from indemnity.

This section defines the process for distributing profits to shareholders.

This section defines the process for closing the company in case of insolvency. That is, if the company cannot pay its debts.

This section defines when the company will appoint external auditors to review its finances. Government funding bodies often ask for an independent audit at the end of a project they have funded. It gives evidence that taxpayer funding was used appropriately. Our license agreement could also require an audit under some circumstances to clarify royalty payments.

This section also defines the process for appointing auditors, and their duties when appointed.