Dear Mr Philips,
Thank you for your request under the Freedom of Information (Scotland) Act 2002 [FOISA]
regarding spin-out companies.
Please find the answers to your itemised questions below:
‘1. How many spin-out companies has the University formed in the past five years
and how much did it cost the University to create each company?’
Seven spin-out companies formed by the University of Strathclyde have commenced trading
during this period: Ateeda Ltd, PSI Electronics Ltd, D3 Technologies Ltd, Elimpus Ltd,
Appshare Ltd, Smarter Grid Solutions Ltd and AsraNet Ltd
The University of Strathclyde invested a total of £120,000 from its Commercial Development
Fund in these spin-outs. The Commercial Development Fund operates through the utilisation
of ring-fenced commercial income.
Further information on other costs incurred has been given in response to question 2 below.
‘2. Could you provide me with a breakdown of costs incurred by the University for
each spin-out company formed within the past five years? This breakdown should
include: - legal costs involved in the formation of each company; - salary costs for
any University employees responsible for the formation of each spin-out; and – any
other overheads involved, i.e. bonuses for said staff, consultancy costs,
accommodation and travel costs.’
In addition to the figures given in question 1 above, the University of Strathclyde has
incurred costs of approximately £135,500 for the protection of intellectual property rights
(IPR) licensed to the spin-out companies. This is an approximate figure as in some cases
some of the IPR has been licensed to a number of companies in addition to the spin-out
company on a non-exclusive basis. As part of the agreement which the University of
Strathclyde concludes with any licensee, the payment of ongoing IPR management costs is
met by the licensee. For the avoidance of doubt, the University would have incurred some, if
not all, of these costs irrespective of whether a spin-out was being formed, as it has a duty of
care to public funders of research (especially the UK Research Councils) to protect and try
to exploit IPR generated in projects funded by these sources.
A total of £10,696 has also been incurred for specific external legal advice.
‘3. Could you also provide amounts of all income earned from University spin-out
companies within the same five-year period, excluding equity/shares held by the
University in those companies?’
We have assumed that this question relates to the spin-out companies referred to in
question 1 above. For the same 5 year period, the University of Strathclyde received royalty
income totalling £100,840 from these companies.
‘4. If you can neither provide the costs nor the quantifiable amounts of actual income
can you provide me with the justification for such expenditure from the public purse?’
See answers given above.
We have also noted above that the expenditure on spin-outs by the University is from a
mixture of ring-fenced commercial income and public sources.
The University of Strathclyde’s rationale for forming spin-out companies is broader than
income generation. Spin-out companies tend to take some years to reach sales and
profitability and therefore any income to the University from the activities of the spin-out
company may take some time to materialise.
‘5. How many spin-out companies have registered actual sales and how many of
these companies are trading at a profit? Could you please provide details of profit
and loss accounts for these companies? If none of these spin-out companies have
made a profit, can you provide me with justification for continuing to spend public
funds in this area?’
The University does not require full accounts from spin-out companies, and so we do not
hold the information required to answer this question fully. This information is available for a
small fee from Co
mpanies House - http://www.companieshouse.gov.uk/
‘6. What is the ratio of costs incurred by the University to income earned by each
spin-out company formed? Does this represent good use of public funds?’
The University does not hold this information as yet. We can only properly judge the ratio
once we have reached the end of the income earning relationship; i.e. at the point at which
the University of Strathclyde no longer earns any income from the spin-out company.
‘7. Have the University's Vice Chancellor, Pro Vice Chancellor responsible for
financial matters, Secretary of Court, Director of Finance or any of the University's
governing bodies ever called for an investigation/review regarding the cost to the
University of creating spin-out companies? If so, could you please provide me with
the relevant details/reports?
To the best of our knowledge and belief no such investigation/review has been called.
‘ 8. What level of legal/business qualifications do the people responsible for creating
spin-out companies possess? If they do not possess such qualifications, is the
University going to take any action against the Director of Human Resources for
appointing these people, bearing in mind that it is public funds being used here?’
Those involved in the support of company formation are professionally qualified and
experienced, with appropriate academic,
business and legal qualifications. However, the
companies are not created by the University. The University supports the process. All spin-
out companies are advised to take on their own legal and financial representation.
The University of Strathclyde has a formal process and procedure for the formation of spin-
out companies involving various members of staff depending on the nature of the proposed
spin-out. The process is to determine whether it is in the University's wider interests for a
particular technology or activity to be commercialised via a spin-out company.
Details of the University of Strathclyde’s Research and Innovation services are given at:
http://www.strath.ac.uk/ri/
‘9. Are the University's managers with financial control for spin-out companies
required to keep a record of all expenditure? If they are, are they required to report
this to the Secretary of Court or Director of Finance? If so, could you please provide
me with the relevant details/reports?’
It is important to stress that the University of Strathclyde, by virtue of its Spin-out Company
Policy, at no stage exercises control over spin-out companies in which it holds shares.
Therefore, no University managers exercise financial control for spin-out companies.
The office responsible for the management of the commercialisation of the University of
Strathclyde’s research output, and which deals with all pre-formation aspects of spin-out
companies is Research and Innovation; for information on their activities, see:
http://www.strath.ac.uk/ri/
Regular reports (which include information on spin-out activity) are provided by the Director
of Research and Innovation to Senior Officers of the University and to the University of
Strathclyde Court on a periodic basis.
We hope that this information is of help to you,
Yours sincerely
Freedom of Information Office
University of Strathclyde
The University of Strathclyde is a charitable body, registered in Scotland, number SCO15263
Copyright:
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holder.
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