Oxford University’s procedures – old framework

NB A revised spinout equity policy was introduced in September 2021.

This page describes the previous policy and process, and is provided solely as a reference for those spinouts that are/were in process of formation at the time of the policy change and which may choose to complete under either the old or new policy.

Researcher and University shares of equity in a new spinout company


To reach shared understanding about the equity split between the participating researchers and the University for founder equity in a proposed new spinout company, we work within the following principles:

  1. Decisions about equity are based on the facts in relation to:
    1. The research that forms the basis for the new business and any intellectual property relating to it;
    2. The connection to the researchers’ academic environment and work, and the extent to which the new business will commercialise the outputs of that environment;
    3. The roles that the researchers have played during the preparation of the opportunity, and are anticipated to take after the new business is established;
    4. The institutional practical support and permissions that are provided, including support from Oxford University Innovation (OUI);
    5. The proposals for the spinout management and any equity set aside for managers;
    6. Any other material facts that are relevant to the decision e.g. rights of funding bodies, other institutions or third parties.
  2. The appropriate allocation of equity between the University and the researchers (taken together as a group) is an equal split, where the facts established demonstrate that the spinout will use the University’s intellectual property (see University Statutes and Regulations), generated within the University by members of the University and with broad dependence upon the University environment, and the spinout has developed with University practical support;
    i.e. 50:50 University:researchers, before dilution from any third party investment.
  3. There exists a limited range of circumstances where the University would not expect to share equity in the new business. For instance, where a business is started purely as a vehicle to manage an individual’s permitted outside appointments , or where the new business is entirely unrelated to the area surrounding an individual’s academic work.
  4. In between these limits there is a very wide range of possible circumstances for any new business. The University’s expected equity share will also vary, commensurate with and according to the facts of the case. (see also University Regulations)


The process for determining equity is:

  1. i. Researchers initiate the discussions with OUI about any new spinout company (even when OUI is not directly involved in the company formation ).
    ii. A Head of Department refers a query to OUI in response to a request from a researcher for permission for an outside appointment (see University Regulations for the holding of outside appointments and the conduct of outside work). Such a query may be initiated, for example, when the company appears to use University IP, yet is unknown to the Department.
  2. Oxford University Innovation and the researchers gather and record all the facts about the background to the company; the IP forms and intellectual property due diligence process provide a source for the facts about the research background.
  3. Oxford University Innovation and the researchers consider all the facts identified (principle 1): does an equal ratio between the researchers and the University seem appropriate (principle 2)? If not, what are the key facts that would support an alternative ratio (principles 3 and 4), and what is the proposal for the overall founding (i.e. pre-investment) equity structure? The researchers and Oxford University Innovation discuss, negotiate if necessary and reach agreement.
  4. Agreement is recorded in the Deal Sheet 1, which is signed by the researchers, Oxford University Innovation and acknowledged by the relevant Head of Department. The overall spinout deal is approved by the University’s Director of Finance.
  5. In case of dispute all parties set out their case in writing. There is an escalation process for resolving dispute, involving the University’s Director of Finance and the Intellectual Property Advisory Group (IPAG).

Conditions on the University’s shares

The University normally takes ordinary shares with no anti-dilution provisions, so is subject to dilution from incoming investment alongside the founder researchers.

All shareholders benefit from pre-emption rights.

The University expects the right to appoint a director and to hold certain conventional veto rights to protect its minority shareholding.

The University’s shareholding is managed by OUI after the company’s formation. OUI can invest on behalf of the University after the initial funding round.

University Statute, Regulations and Policy Relevant to spinout company formation

Although Oxford University Innovation is a wholly owned subsidiary of the University of Oxford, the conditions of employment of University staff are a matter for the University, and Oxford University Innovation cannot adjudicate on them.

Nevertheless, we have been given responsibility for presenting spin-out opportunities to the University for approval.

We will make every effort to guide you through the relevant procedures, in conjunction with the appropriate University officers:

Statute XVI part B: Intellectual property

Regulations for the administration of the University’s Intellectual Property Policy

Regulations for the holding of outside appointments and the conduct of outside work

In particular the University’s Statement of policy and procedure on conflict of interest is highly relevant for spin-out activities.

See also the Research Support pages on conflict of interest in relation to research.

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