National Survey of Research Commercialisation - Australian ...

NATIONAL SURVEY OF RESEARCH COMMERCIALISATION
C) EQUIT Y
For the purposes of this survey, equity was defined as having an ownership interest in a
company acquired by an institution — for example, through stock and rights to receive
stock.
The survey sought information from institutions about their involvement in starting new
companies and taking equity in those companies.
The Association of University Technology Managers in North America has observed
(Association of University Technology Managers, 2002) that:
A willingness on the part of academic institutions to foster creation of new companies and
to license their inventions to such new companies is important because it is frequently the
only way to develop very forward-looking ideas…Start-ups rarely have a positive cash flow
during their first years of operation; therefore, taking equity in such start-ups partially in
lieu of cash fees is an important technique to conserve the company’s cash for investment
in product development.
Specifically, the survey sought information from institutions about the number of
start-up companies in which the institution held equity that were operational as of the
last day in Year 2000.
Table 17: Start-up companies — equity held as of the end of Year 2000
Universities Medical Research Institutes CSIRO Total
A) Number of start-up companies 82 6 35 123
B) Number of start-up companies with equity 65 4 9 78
C) B/A a 0.79 0.67 0.26 0.63
a
B/A = the ratio of start-up companies with equity to total start-up companies
The values for these ratios indicate that universities, medical research institutes and
CSIRO, taken together, held equity in just over 6 of every 10 start-up companies formed
as the result of licensing or assignment of their technology:
universities held equity in almost 8 of every 10 of their start-up companies;
medical research institutes held equity in almost 7 of every 10 of their start-up
companies; and
CSIRO held equity in almost 3 of every 10 of its start-up companies.
INSTITUTIONAL EQUIT Y
The survey sought information from institutions about the value of all equity holdings
as at the end of Year 2000. The term ‘equity’ refers to the ownership interest in a company
acquired by an institution — for example, through stock and rights to receive stock.
Table 18: Value of all equity holdings as at the end of Year 2000 ($’000)
Universities Medical Research Institutes CSIRO Total
Value of equity holdings 71,774 17,435 29,808 119,018
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