The rules of the game for entrepreneur-consultants

Ethos: The Spirit of the Game

What the external entrepreneur-consultant can, or should be able to, expect of the University/Knowledge Transfer Office (KTO):

• We will give you first sight of our IP pipeline, and assist with locating resource to exploit it
• We will look at getting you going or investigating exploitable projects, where there is an appropriate fit, but will not pay you full whack, and will look to get you off our books asap
• We will assist you in finding sufficient resource to support yourself and the project
• We will look to maximise your 'up side' and other incentives, and prospects of a return within the agreed parameters, and not to 'nickel and dime' you
• We will allow, and encourage, you to pick projects that you want to work on - not allocate projects that we want you to work on, so that you can control/determine the likelihood of gaining resource investment and return
• We will attempt to give you a spread of projects so as to spread risk and improve the chances of increased up side
• We will support you with other skill sets and introduce complementary supporting team members when the project requires it
• We will give you autonomy to work in the way that you work, as long as you cover all the bases and you accept that when you 'hook a fish' the university will want to engage a team around you.

What the university should be able to expect of you, the consultant:

• You will provide very early engagement with, and assessment of, projects for free, as a quid pro quo of your ability to get sight of our pipeline
• You will not 'nickel and dime' the university over equity and cost
• You will not bog the university down in detailed legal haggles and contracts prior to the generation of any real value - trust is key. There will be a template consultancy contract, but all legals will be done 'just in time' and not before
• You will remember, not withstanding your own interests and those of your academic/other partners, that you have been engaged as a consultant by the university, paid by and had other remuneration from the university, and you will look to retain the interest of the university in all negotiations
• You will keep the university aware of developments against key milestones and via such light project management and online systems that the university uses
• You will share risk on the project and not expect the university to eliminate all economic risk for you, indeed you will assist the university in finding alternative resource to support your engagement
• You will remember that ultimately this is a university-based collaboration and that it is not your project

Getting the right balance of incentives. No 'coin-operated' consultants

CC BY-NC-ND 2.0 JISC infoNet

If, as a consultant, you are not prepared to risk share on projects, especially if you are acting as lead business developer or proto CEO (precursor role to a Chief Executive officer or MD), then you are probably not the right person for this job.

The university will engage you, where the fit is right, with some small resource, in order to get you and the project off the ground, and to help 'to pay the mortgage', so to speak. Importantly, the University and the KTO will work with you to access external funding streams and resources to continue the project, and crucially to cover your business development costs. The KTO will not expect all of this to be done on a contingency basis - it will share the risk.

However, critically, if this early stage avenue of work from the University becomes sufficiently rewarding in its own right for you as a consultant, then the process is not working. The University will deliberately wish to see that you are kept slightly 'underfed', lean and hungry to seek more return from elsewhere. However, if you are inclined to 'down tools' as soon as the university consultancy cash stops flowing, you are probably the wrong candidate. So please do consider this before engaging with this community and marketplace. From the university perspective we will be looking for evidence that you have (been prepared to) engage with others on this basis.

Different forms of return

For the university there is a basic principle: the more cash you as a consultant get or expect from us, the less equity you will get. The more cash you draw in from others, the more equity or royalty you will get (within set parameters). The university will seek to define basic parameters on equity and royalty share - that are consistent with existing inventor share policies - so as to create certainty, to reduce haggling, and to provide consistency across universities operating similar approaches.

Ideally, with a successful project you will migrate from small fees directly from the university, to larger fees generated via externally-funded university POC projects, and then to royalty, equity or other company fees, or maybe salaries.

The university will pay serious attention to assisting consultants locate and target various external funding sources and will look to reward consultants that assist in the attraction of external resource, particularly grant funding.

Just-in-time legals, minimum haggling and maximum trust

The KT 2.0 process is designed to make the experience rewarding for you both in a material and an intrinsic manner. It is also designed to reduce transaction costs. Consequently, if any consultant is inclined to haggle every detail from the consultancy contract to the head of terms on their deal, they are probably not the right person for this process. The university will not be running to solicitors frequently and we don't expect consultants to.

In fact, if you want things to move quickly - more quickly than universities often work - the university will look to you to you to do some of the work on the terms, legals and heads. Many of these have been crafted and designed already to make them robust, clear and easy to use. You will be encouraged to download these from the Innovation Network, and start to complete these for review and agreement, or otherwise, by the university.

The KTO and university will approach this in a just-in-time fashion. If there is no value on the horizon over which to contract about, we will not be interested in highly hypothetical outcomes. We will start to put in place heads of terms when the project appears to have promise. These heads will be standard and consistent. If as a consultant you are in line to close a deal we will copper-bottom these before the deal is done. These terms will be determined by the university with which you are working but efforts have been made to make this consistent with other institutions adopting a similar approach across institutions.