Perspectives Report #3: The University Is an Early Co-Founder
We asked tech transfer offices at five leading universities how they turn deep-tech science into companies. Edinburgh, Waterloo, Toronto, PSL and EPFL run different models. Their perspectives reveal how much work can happen before a spinout meets its first institutional investor.
Many investors assume a spinout means early science, an academic team and a complicated cap table. These five universities described something different. Their strongest spinouts arrive with technology validated through grant funding, a deliberately assembled team and early signals of market demand.
In deep tech, where development timelines are long and technical uncertainty can be expensive, that's a meaningful head start.
Grants can prove the science before investors arrive
One of the most valuable contributions universities make is absorbing technical risk before venture capital enters the picture.
The University of Toronto calls this approach cap-table efficient. Its internal and external grants fund technical validation without diluting founders. By the time a spinout is formed, its technology may already have undergone years of research and grant-funded validation.
Waterloo takes a similar view for low-TRL technologies. Many climate technologies start early, so the office prioritises non-dilutive and partnership-led routes to raise technical readiness before venture capital arrives.
This matters for investors. The less equity founders need to sell to prove the underlying science, the more capital can eventually go towards commercialization and scale.
The founding team is rarely the lab team
Exceptional researchers don't necessarily have experience building companies, raising capital or selling to industrial customers. The strongest university programs recognize this and actively help assemble teams with complementary expertise.
Edinburgh Innovations connects researchers with experienced commercial founders, while PSL uses grant funding to test potential founding teams over six to twelve months before incorporation. Toronto similarly brings in seasoned executives who can translate validated research into manufacturing and commercial roadmaps.
The founders themselves reinforced the value of this support. Alexis van Wesemael, CEO of Exora, described how PSL backed the project from TRL 1 and helped structure its leadership team. Joseph Burchell of CGEN Engineering credited Edinburgh's spinout process with providing credibility during early grant applications, industry discussions and investor conversations.
For a first-time founder, having experienced people navigate patents, grants, licensing and company formation can save considerable time and avoid costly mistakes.
Market validation starts before the company exists
Technical validation and a strong team aren't enough if customers won't buy the product.
Waterloo tests demand through customer interviews, pilot discussions and industry outreach before incorporation. EPFL similarly looks for pilot collaborations as the clearest marker of industry pull, and cautions against treating regulation as proof of market demand.
For first-time founders, early exposure to customers and commercial constraints can save time of developing technology that struggles to find a market.
A university on the cap table isn't necessarily a red flag
University equity stakes often make investors nervous. But the institutions we interviewed offer a different perspective.
Waterloo argues that faculty equity can represent ongoing value through access to talent, laboratories and future IP. PSL sees university ownership as a signal of institutional support, potentially accompanied by shareholder loans.
The question isn't simply how much equity the university holds, but what value it continues to bring.
The Endgame view: think of the university as an early co-founder
A university can act as an early co-founder through its tech transfer office or enterprise hub. These teams help researchers navigate challenges that would otherwise take months to figure out independently: assembling a founding team, securing grants, protecting IP and building industry relationships. When that support is substantive, university equity can represent genuine value rather than simply dilution.
The models differ by design, and this is a map, not a ranking. What they share is a commitment to balancing technical and commercial expertise and keeping a keen focus on market and execution. And there is still a gap. Without industry and commercial experience, the best technology sits on the shelf and eventually runs out of funding. That is the part we work on. We invest where the technology has to go from first pilots to first commercial contracts, and we connect these companies with industry. One of our own portfolio companies, Everbloom, is built on an exclusive license to university IP.
A breakthrough in the lab doesn't guarantee a breakthrough in the market.
The best universities plan for that from the start.
Thank you to Lizzie Withington (Edinburgh Innovations), Scott Inwood (University of Waterloo), Jennifer Fraser (University of Toronto), Thibaud Pitaud (Université PSL), and Bea Arnold and Simon Gallo (EPFL), and to the founders who told us plainly what worked and what slowed them down.
