University spin-outs are one of the most innovative types of businesses in the UK and play an extremely important role in the UK economy. The "Independent Review of University Spin-out Companies" released on November 21, 2023 put forward a series of policy recommendations to promote the development of university spin-outs. In order to make full use of the UK's advantages in higher education and scientific research output, the government will accept some of the recommendations from "Independent Review of University Spin-out Companies".

University spin-out companies refer to companies whose core patents, technological achievements or other scientific and technological achievements originated from universities. Some spin-out companies continue to be held part of the ownership by universities; other spin-out companies were established based on the internal intellectual property rights of the universities, but universities have completed their exit through the sale of shares or intellectual property rights.

On November 21, 2023, the British government released the "Independent Review of University Spin-out Companies" co-led by Oxford University professor Irene Tracey and venture capital expert Andrew Williamson from the Cambridge Innovation Fund. According to the review, university spin-outs are one of the most innovative types of business in the UK, with funding invested in university spin-outs having grown almost fivefold since 2014. Between 2021 and 2022, 176 university spin-outs raised £5.3 billion in investment. However, many spin-outs are started without knowledge of past successes and lack systematic guidance, resulting in low efficiency and slow development. The review report provides for the HM Treasury and the Department for Science, Innovation and Technology a set of best practice policies that have been endorsed by many investment experts and university professors, aiming to guide the two departments in assisting the creation and development of university spin-out companies.

On November 22, 2023, the HM Treasury issued an Autumn Statement, accepting some of the recommendations made in the "Independent Review of University Spin-out Companies", including:

1. Establish a £20 million fund to support the establishment of more spin-out businesses based on university academic research;

2. Accelerate the establishment of university spin-out companies and promote the standardization of the establishment process;

3. Protect the equity held by founders in university spin-outs: It is recommended that a market norm of 10-25% university equity for a life sciences spin-out; for spin-outs with software-only IP that is easier to work around and less capital intensive to develop, deal terms should be much lower, with university equity stakes 10% or less;

4. Launch a new venture capital scholarship program, similar to the Kaufman Scholarship in the United States, to cultivate “world-leading investors” for venture capital funds.

The HM Treasury hopes that through these initiatives, researchers from British universities can successfully start and develop innovative companies in the UK, making the UK the best place in the world to start university spin-outs.

The biotechnology company Oxford Nanopore established at Oxford University in 2005 is valued at approximately £1.7 billion now. It is regarded as a typical success story.

Chancellor of the Exchequer, Jeremy Hunt, said: “Innovative, globally competitive businesses like Oxford Nanopore are making a huge contribution to our economy. It’s critical that we harness this potential and give universities the tools they need to translate cutting edge research into exciting UK businesses that start and grow in the UK.”