Should Universities Take Equity in Startups?

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Good day, and welcome to this week’s edition of Techincider.

This week, we're diving into an interesting question: Should it become standard practice for universities to take equity in startups that emerge from their spinout programs?

With ongoing cuts to government funding for higher education (referencing the United States), institutions are already seeking paths toward greater financial independence. At the same time, universities continue to be green area of innovation which is fuelled in large part by public funding. From breakthroughs in health and agriculture to advancements in AI, Social Sciences, DeepTech, research conducted within academic institutions plays a vital role in shaping the future.

Given this, there's a compelling argument for universities to adopt structures similar to global startup accelerators that support long-term entrepreneurial ventures born on campus. By taking modest equity stakes, they could ensure a sustainable return on public investment while reinvesting in future research, talent, and innovation ecosystems.

Of course, implementing such models isn't without challenges, from founder equity dilution to questions of ownership and commercialization and even the fact that innovators pay a fee to be part of the university programs. But as the landscape of innovation shifts, experimenting with new ideas may be necessary to keep universities both relevant and resilient.

What do you think? Should universities act more like VCs, or stick to their traditional academic mandate?

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