Start-Up Launchpad Blog

From Academia to Market - Creating the University Spinoff - December 10, 2012

Google.  Gatorade.  MRI Imaging.  What do these seemingly unrelated products have in common?  They all have roots in intellectual property developed and are owned by universities. Look no further than our own state universities for such success stories. Have you seen the commercials for the nutritional drink Ensure containing Revigor?  Did you know that Revigor is a composition used to increase muscle mass that was developed by Iowa State spinoff Metabolic Technologies?  Have you ever used buffered aspirin or eaten Rolaids?  Both were created at the University of Iowa.

America's universities are conducting ground-breaking research in biotechnology, agriculture, engineering, software and medicine.  But how do professors, grad students and researchers transition their research to a company with a commercialized product? Much like any startup business, hard work, significant time and sacrifice will most certainly be required.

But creating a university spinout has an additional layer of complication. Most non-university startups are built around intellectual property that the company owns and can exploit simply to advance the company.  Conversely, university spinouts almost never own the intellectual property that forms the core of the company. Instead, they must license the intellectual property from the university.

These licenses define the terms of the deal with the university and govern the ways in which the startup can use the technology and at what cost. Because of the importance of the license agreement, it is paramount that startups understand the terms.


Many university innovators find themselves having created valuable intellectual property, but have no idea how to commercialize a product or start a company.  Iowa universities recognize startups as an important part of state economic development and have put an increased emphasis on providing business mentorship through their research foundations and the John Pappajohn Centers. The universities can also facilitate connections with local service providers, such as accountants and attorneys, who can help you understand the financial and legal terms of your license agreement.