Deep Tech Spinouts: Inside Albion Ventures' Decade-Long Partnership with UCL | Dave Grimm

Why do so few university spinouts make it from lab to market? Dave Grimm, Partner at Albion Ventures, has spent a decade answering this question through a groundbreaking partnership with University College London that's transformed how academic innovations become successful companies.

This conversation reveals the blueprint for successful university spinouts: embedding VCs within academic ecosystems, prioritising pace over perfection, and creating standardised processes that work for founders and institutions alike. Dave shares insights from successful spinouts like Phasecraft and Oriole Networks, plus his vision for solving the UK's Deep Tech scale-up challenge through government procurement and ‘unretiring’ successful entrepreneurs.

Essential listening for anyone involved in university technology transfer, Deep Tech investing, or scaling academic innovations into market-changing companies.

Learn more about Lab to Market Leadership: https://www.deeptechleaders.com

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Podcast Production: Beauxhaus

Transcript

Dave Grimm: 0:00

Building a culture of pace, knocking down barriers. You know, 80 20 rule, moving fast is absolutely critical. And it's not something academic institutions are good at because they, they, they, they value precision in accuracy and, and, um, yeah, I being dotted and t's being crossed. And so pushing through that and pulling hard against that is absolutely critical to every startup and spinout

Chris Reichhelm: 0:28

Welcome to the Lab to Market Leadership podcast. Too many advanced science and engineering companies fail to deliver their innovations from the lab to the market. We are on a mission to change that. My name is Chris Reichhelm, and I'm the founder and CEO of Deep Tech leaders. Each week we speak with some of the world's leading entrepreneurs, investors, corporates, and policy makers about what it takes to succeed on the lab to market journey. Join us. Let me say upfront that University spinouts are fundamental to the success of Deep Tech as a movement. The research, the, the breakthroughs, the innovation that come from academics and researchers are the foundation stones on which deep tech and all its various domains rests. But let me also say that. University spin outs can be incredibly frustrating as well. Not just them as companies, but also the university spin out process in the UK. There's been a great deal of conversation around this, particularly located around stakes that universities take the time it takes for technology transfer offices to actually move through and, and incorporate and spin out companies. Questions around intellectual property and the ownership of that ip, et cetera. So it is a frustrating process and it is a slow process in many cases too, and that slowness impacts the success of spin outs and impacts their ability to move from lab to market quickly. Today I'm delighted to be joined by a partner at Albion Ventures, a guy named Dave Grimm. And Dave for the last decade has been working with Albion and one of the UK's leading universities, University College London. And together they've been fashioning a new way of engagement fashioning in my, a new way of engagement in my view, one that is smoother. One that is a little bit more standardized, one that is prioritizing pace. And I think this is exciting. As exciting as it can be for the spin out administration process. And yet, unless you're willing to look at this process, you can't really have a hope of making it better for young Spinouts. So I wanna get into it with Dave today. I wanna understand what exactly about their program have they done that is leading to the success and the guys are having success. They're producing some really interesting companies. I'll highlight too, Phasecraft and Oriole Networks, both of which have raised a fair amount of money. And, uh, and they've got a whole future of compute portfolio that is very interesting too. So I'm hoping that Dave is gonna get into some of the stuff that they've done to create this more organic, symbiotic relationship that is leading to success. If you're into spin outs, if you care about that spin out process, I think you're gonna love this episode. Let's get into it. Dave Grimm. Thank you so much for joining me.

Dave Grimm: 3:58

Thanks for having me on.

Chris Reichhelm: 4:02

Deep tech investing means many different things to many different people and investors. What does it mean to Albion? Kind of walk me through the history of deep tech and Albion, because they weren't always a deep tech investor.

Dave Grimm: 4:22

Uh, so yeah, I mean, deep tech investing to us is where you invest in sort of a technical differentiation that's gonna last for long enough for it to be valuable in the marketplace and long enough for that technology to be developed to the point where, uh, where that tech, where that will, uh, be valuable. Um, actually we've been doing it without calling it deep tech for many, many years. Um, in fact, it's only deep tech really sort of became en vogue. It was only in the last few years that Deep Tech has become fashionable. Um, but in fact, at Albion we've been trying to back, uh, companies with differentiation for, you know, for decades. Um, so sometimes that would've been technical differentiation that we believed in, um, alongside, you know, founder differentiation or, or market execution differentiation. Um, so, you know, now when we talk about deep tech investing, we're talking about what is there, is there, you know, some patents or is there some technical knowhow, or is there something at the heart of this business that means that we can't just go and get, you know, five in years skilled in the art and go to do the same thing? Um, yes, and that's a very broad definition, but in truth, deep tech is a very broad space.

Chris Reichhelm: 5:39

But it, it, it, it, it is true. I mean, I can remember. Probably 15 years ago, Albion had an investment in a company called Process Systems Enterprise that we actually worked with. And it was a university spin out from IMP Imperial, I think. And I think we would today. It was ultimately acquired by Siemens from memory, but it was a, it was a, you know, a classic example of the company you've just described. But again, we didn't refer to it as Deep Tech back then. The terms just weren't used and how, you know, in terms of. Do you take a fairly broad view of deep tech today? In other words, are you investing only in particular areas and not others?

Dave Grimm: 6:23

Yeah, good question. Um, so we have two different sort of distinct strategies there. Um, so we have our larger kind of flagship funds and they have quite defined areas of deep tech that we think are the, the most exciting to go after. Um, so those are our future compute energy transition, novel ai. Um, but we also have a university IP strategy where we're going very early in helping create businesses out of IP universities at a very early stage. Uh, and there I think we are willing to sort of look a little bit broader in our scope across everything from kind of med tech and therapeutic through to kind of. Software at the other end, and then sort of hardware sitting somewhere between those two. So, um, in our flagship funds we're a bit more, a bit more defined strategy around three verticals we think are most exciting. And then in our university strategy, we're, we're, we're taking a broader flow of IP and trying to figure out if we can match it to exciting markets.

Chris Reichhelm: 7:17

Yeah. What are the, you know, what are the challenges that you guys find in deep tech investing?

Dave Grimm: 7:29

I mean, there's lots of them. Uh, I think the easy answer here is capital and everyone will tell you there's not enough capital in Deep Tech. Uh, I, I'm not gonna sort dwell on that because I think that's fairly, fairly sort of accepted view.. Um, I think a lot of the time the challenges come down to, um, time, time to get kind of product market fit. Um, time from kind of taking a technology and actually getting into a customer's hands as a technology and then taking it as tech, taking it from being a technology to a product as it's a big old chunk of time, um, and requires a specific dev technological development skillset. Once you've then got a product, you've then got a completely different entity and you don't, don't necessarily need sort of technical, technological, sort of deep understanding at that point in more, you've got execution and commercial understanding. And so there's almost a skillset transition point as well. Um, and where you kind of build those skills and, uh, and experience into the business is kind of an art form, um, because it, it's, it's fairly true that. And most of the investments I've made at the very earliest stages, they're not really, the technology has not proven or advanced enough that you can go and hoover up like, you know, the best domain space, talent in the world to kind of help lead this business forward. So you gotta figure out how do you build a talent pathway, uh, and a hiring plan and get everyone on board with how you grow the business from, a piece of kit on a lab bench to a product being sold to specific ICPs in enterprises. Um, and you can see just the change in dynamic through that journey is, is kind of wild.

Chris Reichhelm: 9:20

Yeah. Yeah. And it's, you know, you, you offer up this distinction just there between the technological part of the journey, which is demonstrating the tech, uh, you know, building it out, and then obviously the commercialization piece. And, um, it, it's in our experience, so few businesses ever really complete trying to prove out their technology proposition and so few get to the point where they're able to articulate that into a value proposition with some meaning and resonance in a particular value chain. And so, you know, are you, are you guys in your portfolio seeing more of those companies make that transition? Or are you seeing the same kind of odds more or less that the rest of us see?

Dave Grimm: 10:16

I think, I mean, I think, like you say, the odds are against these companies getting to, um, going to a stage where they already sort of delivering product. Um, I think what's, what we, what we are trying to work on is how we, how we change that paradigm. Like particular how do you, how do you build teams that can, you know, so you can get to a point where you just sell the technology to a, um. To an acquirer and you see a lot of these kind of early-ish tech exits, um, for, you know, values south of a hundred million. Um, I mean that can be a great return if you've got in at the right stage and you know, you're small enough fund to be that work, but ultimately that's not gonna drive, you know, really healthy ecosystem that can grow businesses to scale. Um, and so again, I think a lot of the time we are. Working quite closely with leadership teams and putting talent in and moving talent around to allow 'em to make that transition and where we, where we do that successfully. And it's, it's not an easy thing to do successfully, but whereas it's done successfully, it does make that difference. So putting in a founder that's able to take with this commercial and has the ambition and the hunger, and having designed the capital so you can bring them in, incentivize 'em properly to go and do that massively exciting part of the journey is, is absolutely critical. Otherwise, yes, you're almost certainly setting yourself up for a tech exit. Um, yes, and we do a lot, a lot of that. It comes right back down to the very first foundings of the business. How do you, how do you set up the capital structure of the business? How do you, um, set expectations and how people align for what the journey might look like as it kind of goes from zero to one and a one to 10, 10. Yes. And I think we're now at a stage we've done that enough, we're able to share some pretty cool stories of people's journeys with other founders that starts to help lubricate that thinking.

Chris Reichhelm: 12:17

Yes. Can you share some of those lessons with us?

Dave Grimm: 12:22

I can think of founders that have started the journey. Uh, I, right at the start, we've been able to say, this is the first two years of the journey and what it looks like. We are going to bring in a domain specific commercial leader at this point, and they're probably going to be CEO. Um, you will still be valuable to the business. You'll still look, you know, we're gonna find a way. You'll still be either CSO or CTO going forward, but as we found the business now, we need you to work really hard and take it to this stage in the knowledge that when it gets to this stage, you'll be handling your baby to someone else. Yeah. Uh, for the, it's growth and that we will care for you and ensure that your participation in the future business is, is satisfying. Um, and being able to have that authentic chat like before you've even founded the company, before you, you got a vehicle, um, is pretty critical. I've done that a few times and that's when, when you've seen the best CEO transitions have have been when you kind of put the hard yards in two or three years before you make the CEO transition.

Chris Reichhelm: 13:32

Yes. So that is, so that expectation setting right up front. Yeah. And laying out the journey of the next couple of years. And these founders, I'm assuming, are often technical founders who may also fashion themselves as the CEO of the business too, at that point.

Dave Grimm: 13:52

Yeah. And, and, and quite often because they feel they need to, rather than they're necessarily desperate to. Yes, but they feel like they're coming to the VC community. They need to project a certain type of personality. And so yeah, I like to sort of be quite open with, I'm not, don't think of me as a typical vc. You don't have to sell me a story. Let's get like actually into what, what you want and what we want.'cause you might find that we're more aligned than you think we are.

Chris Reichhelm: 14:22

Yes. Do you feel that gives them a sense of relief?

Dave Grimm: 14:27

Some. Some in some ways, some don't. Some don't. Yeah. Some sometimes it does. Like some, yeah. Some founders really wanna be the CEO for the long term and they don't, they have this message as one they want, so it's not, it's not a one size fits all. And that's hopefully why I think my job is not the automated in the next year or two, is that I think it's much more of an art this bit than a science. Kind of perfect for me. Like can't often get asked particularly, you know, LPs for funds that we're raising to go into universities. I like what, you know, what are you looking for? What's the perfect value team look like? Um, and quite often you're sort of bespoke building something rather than saying, right, I need to look like business and this, because often you can't have like that to start with.

Chris Reichhelm: 15:14

Yes, yes. Are there, but having said that, are there. What kind of features are you looking for in entrepreneurs or in entrepreneurial teams when you're investing?

Dave Grimm: 15:31

Yes. There's sort of, anyways, there's a few different archetypes that, that we like. Um, my sort of favorite one is, is Mark Albion's favorite one too. I remember he said this on a podcast about university spinouts well over a decade ago, which is you kind of want your professor. You are a PI and academic leading our worlds on your research, then you wanna pluck one entrepreneurial hungry person outta his group who understands the technology enough, but is not, you know, has not become, become a career academic, kind of young and hungry. And you can build those two things together. They often really excellent, excellent foundation savings to the business. And you can get that. And, uh, that's one, that's one to, to really try and engineer. Um. The other, like seemed successful from the early stages is, um, if you bring in, uh, if you've got, you've got an academic who's world class in their field, and you can bring in a domain expert who's built a business before in that space and who's going back around to do it again, that works quite well. Uh, and that actually could be done if the, if they've been successful on their first time round. Because more their risk appetite goes up a bit because they're willing to go and do something a bit mad because they don't need it to be, you know, don't need it to secure their, their, their children's future or whatever it is. Uh, and so you can bring them into idea is exotic and exciting enough you can bring them. Um, so that's another, um, another quite, quite good sort of foundation stage of a business. Um. And then you have the, you can have academics who are entrepreneurial enough to, to get out there and start, create a business and run it. Um, quite often there's a time limitation on that one, but that, that's quite nice when you've got that because you haven't got, you haven't got lots of leadership mouths to feed at that stage. You can set up the capital structure such that, um, you know, they can do some time and that it can be taken forward and out, uh, once they, enough technical progress that you can bring in. Sufficiently high quality, but high caliber level of, of domain expertise website.

Chris Reichhelm: 17:46

Yes. Yes. I imagine that for some of those repeat entrepreneurs, motivation's quite an important feature to be looking at there.

Dave Grimm: 17:55

It all comes down to personality type and drive and hunger, and it's, um, it's definitely something in Europe and in the UK where something culturally that makes that a lot more difficult for us than, than it does for our us.

Chris Reichhelm: 18:10

I think so

Dave Grimm: 18:12

give an interesting kind of example of this. Um, we had a semiconductor businessin our portfolio. Um, and we were looking to bring in new leadership. Uh, and very specifically we wanted to bring in someone from the West coast who was part of the kind of Silicon Valley flow. Um. My initial instincts was this is gonna be a, it's gonna need an enormous amount of energy and drive. Um, you know, this person's gonna have to be, you know, jetting backwards and forwards from San Fran to the UK and then out to Asia because, you know, semiconductor very global in that respect. Um, and so, you know, in my head I was like, this needs to be someone in their kind of thirties, forties, like who's got just loads of energy and, and, and time for this. We went to a specialist semiconductor recruiter in the US. And, uh, you know, the first few profiles they showed me, they were all 60 years plus. And my reaction was, ugh, these guys are just not gonna be up for it. These guys are not gonna have the energy. And, um, the recruiter said, give them chat to 'em. See what you think. And I was kind of blown away by, some of them Very successful um, already, you know. Made comfortable lives themselves and yet they were very keen to go around and spend another 15 years doing the hard grind at fif at 50 or 60. Um, I mean, I think in the UK I think the majority of our successful entrepreneurs who are in their sixties are not looking to CEO their next business. Um, it's something about the US kind of culture and uh, um. American dream means that then it's kind of so ingrained that it seems to me that you work until, until the very last moments, and you're very happy to do that. That that's, you know, a huge boost to that ecosystem because they, that that recycling of talent and that, you know, um, flywheel that you need to build a really successful venture ecosystem just has a lot longer to spin in the US than just

Chris Reichhelm: 20:20

so do we need to do we need to acknowledge that in the UK and Europe? You know, what is more likely, are we gonna change the behavior of the entrepreneurial ecosystem over here and say, and you know, are they gonna start unretiring, so to speak? I think there was a, uh, an article it's been doing the rounds of sub of Substack or LinkedIn, someone calling, it was, um, it was the CEO of health sake. Calling for a Torsten, calling for the unretiring of Europe's entrepreneurs so that they can get back into the system and apply the lessons that they've learned to, uh, to, again, to make Europe great again, so to speak. I, is that more likely, or is it more likely that Europe and the UK's entrepreneurial talent will retire at their first win and we need to adjust to that?

Dave Grimm: 21:22

That's a huge question. Um, I think it is. I think because of a lot of our talent has spent time in the us I think you're seeing more and more, more and more talent willing to go the second time, third time around. You also, you know that you also get, uh, a few that have had quite short cycles and therefore able to get back into ecosystem and help. Um. I can, I think for instance of, um, Ian Hogarth, I know very well. Yes. You know, successful ex founder, um, I'm still, you know, very young. And so you the imagine value, he's now into the ecosystem across a number of different. But that's, but the value E is adding, and that's a great example, but the, I think the value Ian's adding is kind of different. He's serving as investor and kind of government advisor a little bit, and he's, he's doing a lot of different things, but not necessarily wearing the CEO pat and getting back into the fray. Yeah, that's, that's true. Um. I could absolutely see him and, and those like him doing that, I think, I don't think that's a, he wants to retire type problem. I think that's more like the opportunity to be a really great actor as a funder in, in the, in the UK and Europe is differentiated from that in the us. Um, and so I think he's serving a purpose that needs to be fulfilled. I think were, were that, were those. Already felt like, would imagine he would be probably CE something. Yes. Yes, yes, yes. No, that's right. I think so. I think the point is us making with Ian is kind of, there are those that have gone through the cycle quicker enough. Um Yes, yes, they, yes, that's true. To go again. That's true. No, that's absolutely true. Increasingly so. Increasingly so I think, yeah. Talk a little bit about, uh, the UCL fund that you've been and a very important part of, I think since it's, since it's founding. That's right. Um, you, yeah, no. Share with us a little bit about that. Uh, what was it initially set out to do? There have been lots of university funds that are out there, there still are. What did you guys set out to do with UCL? What's been achieved in the, in the time that, uh, in the time that this has been in place? Yeah, I could question. I think that's it. What we set out to do and what maybe differentiates us from some of the other efforts is that we wanted to kind of have a kind of harmonious, um, molding of a VC in sort of knitted into the fabric of the university in a way that made us a good actor for everyone. Um mm-hmm. I think for a long time, deep tech theses is sort of. Uh, approach universities and either sat too far away and just said service, like good companies. And then they've, you know, turned up once a month, looked at the IP flow and gone Well, those isn't a great company yet, so I'm not doing anything. There's certain, many examples of funds that have been raised. Universities that have not deployed because they're not, not close enough. Um. Or, uh, you know, there's a lot of antagonism between the VC and the university because they are very different entities and they don't see eye to eye on a bunch of different things. Um, and, you know, each has their own perspective, but it causes a mistrust from the university and the vc. And the vc, you know, doesn't, doesn't hold the university in regard. Intervention operates separately to it. But I think we wanted to see if we could build a fund where we solve some those problems and actually put. Like a VC that was their kind of friend to everyone in the heart of the university that allowed to sort of break the mold of, of, um, IP and innovation, not quite gaining the right profile or the right, um, formation in order to attract VC money. Uh, so we actually got much closer to the tech transfer office and the university and the departments than I think as you've typically seen before. Um. And we tried to sort of broker, um, you know, thoughts and, and programs and investments that didn't achieve everyone was a sour taste in their mouth. Um, and I actually ended up working very well. So you, I, I think people in the tech transfer off the ECL still, you know, respect us and, and. Uh, take on board our views about how much equity they should be taking, how fast things should be moving, all these things that we have opinions on. Equally, we are not out there telling the world that universities are awful places and bureaucratic are awful and slow and, uh, unable to see their job properly. So that's an unfair characterization of them too. But you often hear from the VC community. So I think we've managed to kind of build a world where we really understand each other, and that's led to us being able to. A much more kind of trusted partner of the university, and that means we've been really deep in all of the IP flow, all the conversations with academics, trying to build stuff, actually. As vc, this is how we think we should do it. And being trusted for that opinion. That's why was to create companies and create ventures at the heart of the university in a manner that means that they've got a chance to become a global category leader. But otherwise, they would never have got off the shelf. That IP would've, would've, would've rotted there because, you know, the tech transfer officer wanted to do it one way. The VC community would've seen it differently. They would've fought, they would all assumed it was everyone else's fault, and the opportunity would never have escaped. Yeah, so proud of of that, that relationship that we've built. This is, this seems very unusual, and I'll use the word unusual because there have been lots of funds around universities that have been trying to build those very same type of relationships and indeed many funds that claim, they do have those kinds of relationships. But you get further into the, into the academic ecosystem, and then you hear very mixed reviews. Um, uh, uh, with a number of them. And it's also, you know, and it's often with, you know, a similar set of complaints, stepping on toes, um, uh, this inability to, to determine ultimately if the investors are there to support the academic community, or if the investors are there to help develop outstanding companies. And there's a difference, there's a distinction there. And that's always a, you know, a, I imagine that's a, a very fine line to walk. What has, in your experience, and you know, you're a, you know, you're a a guy that's well known in the ecosystem, what has made it different for you guys? Why have you guys been more successful in doing this than other funds? I think. One thing that characterizes Albion through and through, I think our, our ING partner, Patrick, with others, is kind of sticking a long term view on things. So in each deal you can fight and kill for an extra percentage. You can, you know, you can push your agenda here and there, but if you're trying to, if you, if you've got a sort of, look, this has to work over a 20 year view. We're not gonna go and just get two or three deals and burn our bridges and go, because we, we really believe in the long term. Um, value of what we are doing, then, you know, you, you're approaching it with an magnitude of, you know, patience and humility, uh, which are not characteristics often found in VCs. Um, uh, and we've had to really double down on, you know, emphasizing those characteristics at times. And, uh, you know, there are times when I found it extraordinarily hard, um, to interface with a public institution. And, you know, there are million different ways that universities can be very frustrating partners to deal with. Um, and I'm sure they might sort the same thing about me as a, as a sort of private, from the private sector. Um, but I think we've all sort of committed to patience and, uh, you know, open communication and taking a long term view. Um, and we've hired for that. The people we have in the front, you know. Were diplomatic with the way we, we, we work with the, the Dean University and we, everyone is in it to build a, a 20, 30, 40 year success story. Um, and that, you know, Albin has been around for 30 years. We intend to be around for at least another 30 years. Um, you know, everything about the way our partnership works and the way that our hiring works and the way our culture is, is set up for the long term. I think that is really very unusual in the BC world, and that's why we've been able to bring that. Um, attitude and culture to this, and it's made it work. And have you gotten the alignment, say, at the top of UCL, at the top of the institution so that, because creating that alignment throughout the institution obviously makes it much easier for you to be able to do your job. Yeah, I mean we, we, we relationships throughout the university. Mm-hmm. Um, it's funny though, like UCL and I think all universities in some extent are, are quite a nasty places. Often doesn't really matter what the person the top thinks anyway, because, you know, it sort of gets lost through a whole bunch of different powers, directors and stuff. So it's more, it's not just having the people at the top, it's much more about having. Worked with people who were in the doers at the university who were getting stuff done, um, and getting them to understand, you know, spending time educating them. This is why we're setting up like this. This is why, you know, with the cap tructure, the cap table structure should look like this. And we, you know, believe us that know this will be a good a I'll give you maybe an example of how that played out really, really well. Um. Quite early on, we could see that there was an issue with the way that software was being dealt with at the university. So universities in the UK predominantly have made their money historically from sort of life sciences or at least physical science, but mainly life science investments, and now. It is not uncommon that the cap tables and structured look very different from the rest of the E ecosystem. So you see founders on very small percentages and investors on very large s, and there's a different kind of mindset and you go through enormous outcomes. So small percentages kind of can work for founders in those, in those scenarios, but it absolutely doesn't work in a software spin out. So when you're, there's been lots of talk about this in the press and a place when you're taking 30% of a software spin out, um, you're pretty much killing it from the, from the moment it starts. Um, and so what you would do, the ultimate effect of that is that software's quite easy to walk off with. So if you're gonna start a software business from a university, what you do is you leave the university with your laptop and then you start your business. The university gets nothing. And actually the, the, the, the, the spin out or the what, what would've been a spin out suffers because it loses access to a whole lot of talent that typically they can bring it. Um, so we had this conversation with UCL that went on for a while because it takes, it takes time to kind of change fairly, sort of bureaucratic public institutions at times. But, um, just saying, look, you know, from a software perspective, you shouldn't be trying to, um, take huge stakes. And what happens is you get. Large stakes in two or three businesses and the rest disappear, or they don't start, you'll be far better off taking, you know, small smither, single digit low dig, low single digit percentages of every software business, which you make it so attractive and so easy to do and so small that everyone will just do it automatically. You'll get lots of small Smithers, and ultimately your return will probably be better. Um, and we did that. We, so we in instituted a program. We got signed off at ECL started Motion, which was basically a 5%, uh, deal for any, any software start. The very first startup that took that deal, uh, was a, a medical technology software startup. They took that deal and it meant that their spinout process was, uh, know a third that the length click would've been otherwise.'cause otherwise they'd dive into these deep negotiations and it all gets better and it takes, just, takes forever Anyway, it moved it so much faster that they spun out very quickly and they were fortunate enough to be in touch, spin out in time to win quite a big grab, otherwise they would've missed. Um, and then insulted, you know, not on the back, the thick end of a hundred million. Inside three years, university made, still owned basically 5% of that business as it sold. And you know, that was a big payout back to the computer science department, back to the university, uh, and a business. Otherwise, if they had tried to take more or they, even if they had, don't have the same amount, but they've negotiated for longer, that business may well taken a different course or at the start the tool, you know, when they start to see those little wins and start to see how that works. And you get a lot more sort of hearts and minds. Um. You can start to see, you start to get a bit more trust from the institution. You know, over the last decade we've built up, you know, really sort of deep levels of trust. Well that's, I mean, that's an outstanding result. And if only we could get the rest of the leading universities in the UK to follow suit. Think, think it, it is direct. It is direction travel. It is it's direction. Like, and, and certainly on the software side, you see more and more in the, in that real hardware is more difficult. Yes. Yes. Tell us about, uh, the insights you've gained or lessons learned from the spin out process, uh, and, you know, including the, you know, the process of spinning out these companies, incorporation and so on, and, and then also, uh, you know, supporting startups in the early days. What kind of, what kind, you know, what should people take away, uh, uh, you know, from your experience? I wanted people to just remember one thing from this conversation. It would be about pace from the off. Um, so there is a, a mode which is, um, you've got some technology in, in a universities of ip, and then there's a patenting process and that takes a while and then you've got your patent. And so. There's a sort of, oh, well we've got the patents who are protected. And so then it can take a, you know, let's think about starting the start. We're gonna negotiate the start cap table that we're gonna take our time. You, before you vote, 18 months to two years has kind of slipped by while, while it got going and you know, uh. There's a false security in the fact there's a patent there that makes people think, oh, we can, we can, you know, it's better to take our time and get this right. And, um, because we've got this kind of moat, which will, which will last for 20 years. So if it takes two years to fund a business that's marginal, um, and I always give this example to. Universities when I'm talking to 'em is that Apple patented the click wheel in 2004. So you are, I think you are on this as my to remember, the iPod with the little, the clicky wheel, um, song selection, pre pretech screen. So patented that in 2004, finished a bunch of patents for, it's like it getting a 2005 and then they launched the iPad Touch and the iPhone in 2007. Those patterns became basically worthless. They actually out innovated and destroyed the value of their own patents, which is the right thing for them to do. Um, but you know, you could easily have been an academic patenting it and thinking, oh, I've got this great way. Now I've, you know, you know, I've got, I've got all this time and protect you from one very specific attack vector, which is someone doing exactly the same thing as you. There are many, many ways people can do something which destroys the value of what you were trying to do. And so taking your time or being slow in the first, first case is, is, is a false. It is false security and patent. So you need to build an idea of pace and execution to the business from the, and then it, the problem with that sort of slow process is it builds, it doesn't build a culture of PAC and execution. It builds. A culture of dotting the i's and crossing the T's and you know, you don't have to read any of the most kind of, uh, la tones in, in VC and entrepreneurship sort of writing to say that isn't, that isn't, you know, the right way to execute. And so, um, yeah, building a culture of pace marking down barriers. Yeah. 80 20 rule moving fast is absolutely critical and it's not something academic institutions are good at. They, they value precision in accuracy and, and, um, you, I being dotted and t's being crossed. And so pushing through that and pulling hard against that is absolutely critical to every startup. Every now. Yes. Do you get the sense that changes afoot and that they're taking these, they've accepted the desire to ch for a change of behavior. Sorry. They've accepted the need. This change of behavior and that they're doing something about it. I think, I think the leading lack of dairy institutions, I think like in London, know there's, you know, across Imperial and others. I see, I see a lot of that attitude, a lot of ex acceptance mean, certainly on the kind of cap table stuff. I think there's been some strong positive movement there. Um, the pace thing is a harder one, I think. I think there's next, there. I think it's an acceptance that, that that's needed, but actually how you do that when you have some complex structures, legal departments, um, and incentivization structures, which maybe don't reward the upside so much as just avoiding the downside. Um, you know, those things, those things are difficult and, you know, putting in place a different incentivization structure in a university public body is complex and so there are some. Underlying structuring challenges, which means. That's never easy. And that's, I go back to the thing that we built with UCL means that we understand that, right? So I can go to, yeah, the tech transfer office or to the university say, I understand this is why it is, but we need it to look like this. So how can we figure out a, where to get through it rather than just shaking, got this and all and saying, well, yeah, um, you know, it isn't working and you know what you do, you just need to do your job faster because there's not, that's not a really expectation of a public institute. But also demonstrating that the alternative leads to success like you did with this medical software startup. So if you, if you go down this path with us, look a really good example. This is what can happen. And then of course they've got to create the association between the pace that you identify and that win. So if that, but. Given that, uh, you know, the government, you know, that grant wouldn't have come forward had they not incorporated in the time that they needed, then you know, it, you know, one could surmise that the rest wouldn't have followed, uh, or would've been less likely to follow. But that, you know, it's an education process and they need to see some precedent as well that if we move faster. If we're willing to be more entrepreneurial in our own dealings and move these out, or at least create a set of standards, that means that a lot of this is boilerplate. Yeah. And so we can move really fast and uh, and then, you know, and that may be the best way of supporting these young companies when, when they spin out. You hit the nail on the head on the standardization though, like, 'cause that really does help with pace. Um, yeah. And you know, that, that require, that requires a lot of buy-in from a lot of different people at universities and takes time and energy, but it's absolutely worth it. And yeah, something that we, we record a lot about, not time at ECL. Yeah. And in the wider university cases. So It is, it is slowly coming, um, certainly soon you day. Have got some interesting programs, try do similar things. Baptist Choice, other bits and pieces. Um, you know, there are, there is a, a recognition of this and I think the closer that the universities are to the BC ecosystem, the more that like trusted bridges have helped rather than antagonistic, like fish shaking. I think the valley chance you've got of everyone moving and accepting slightly different paradigm to get things done. Yes, yes. Let's, um. Let me switch tack, uh, a bit. If you don't mind. Let's take a step back and look at kind of UK deep Tech, generally speaking, and, uh, and, and its progress. We are, and this will be no surprise considered, generally very good at the fundamental invention and, uh, uh, and, and innovation. Uh, and, and, and perhaps getting to a kind of a, a good pilot. Um, TRL six or seven and then, you know, we have that valley of death to get to a commercial grade first of a kind and we really need to be ramping up commercialization efforts. And then generally we see a lot of fallout there, so we're re so all of that is a long way of saying we're really good at the early stage stuff. We're less good at the growth stage stuff. And we had this issue, we've had this issue for as long as I've been in the UK 31 years. Uh, we had it in software. And, uh, and now you know, we're, you know, we have it in Deep Tech even more, and you can understand why we'd have it in Deep Tech more because it's far more complex. It involves a lot of operational challenges, manufacturing and scale up challenges, new materials and the like. What, you know, funding is a huge challenge for us, and I'd like us to talk about that too. About what you think can happen to unlock. Additional funding, but putting funding aside right now, what are some of the other challenges that you see holding us back, preventing us from being able to scale more of these businesses? Yeah, good. Good question. Um, so firstly, I would say I don't think it's ambition quite often. He sits, well, you know, the founders here don't have the sort of ambition of, of, uh, of the US and therefore they don't build these huge companies and they're willing to sell out and all that stuff. I think that is actually just a function of they're not big enough capital. Like if you go out to raise money and the market is only willing to put 10 million in as opposed to put 40 million in, you have to scale your ambition to what the market can fund rather than, um. Rather than sort of try and try and shoot for the move when you haven't got enough money to actually get to, to, to achieve what you need. Um, and so I think we have some very ambitious founders, but, um, I wasn't allowed to mention funding as the main reason, but like I would say, uh, funding that lack of funding. Just sort of tailor the ambition that founders have and they quite rightly sell out when they can't raise more money, or they certainly, or they tailor their business to reach a point where they can sell because they know they can't raise hundreds of millions. Dave, thank you so much for joining me today. This has been a lot of fun and really, really interesting insights, and I thank you for your time. Thank you. Find me enjoyed. It's been really, really great to chat. You've been listening to the Lab to Market Leadership Podcast, brought to you by Deep Tech Leaders. This podcast has been produced by bowhouse. You can find out more about us on LinkedIn, Spotify, apple, or wherever you get your podcasts.