The Elephant in the Room: Is Oxford’s IP Policy Still Too Restrictive?

For years, Oxford’s approach to intellectual property (IP) in spinouts has been a topic of whispered conversations at networking events. No one wants to bell the cat, but Oxford University Innovation (OUI) has often been the elephant in the room, while Oxford Science Enterprises (OSE) is the big cheese in the corner.

At the heart of the debate is a simple question: has Oxford really reformed its spinout IP policies enough to compete in a global talent market, or does it still risk scaring away founders and investors? With the stakes higher than ever, and competition for talent only increasing, it’s worth digging into how Oxford’s policy evolved, how it stacks up against its peers, and whether the changes go far enough to keep the UK’s top university competitive in the high-stakes world of academic entrepreneurship.

From equity split to founder-friendly?

In the early 2000s, Oxford was notorious for claiming relatively large equity stakes in spinouts - often taking up to 50% ownership before a company even sought external funding. The justification was that Oxford, under Statute XVI, owned all employee (and even some student) inventions, so it was entitled to extract value. This led to some particularly egregious cases where founders, after raising seed and Series A rounds, were left with less than 20% of their own company - an unattractive proposition for both entrepreneurs and investors.

The breaking point came in around 2021-2022 when a survey found that Oxford had the lowest founder satisfaction rate in Europe for spinouts. The criticism reached a fever pitch, and in 2021, the university overhauled its spinout equity model, cutting its standard share to 20% across most spinouts, with founders retaining 80%. For IP-light spinouts, like software-based ventures, the split could go even further in the founder’s favor at 90/10.

On paper, this move was a dramatic shift - an attempt to align with best practices from institutions like Cambridge, Imperial, and MIT.

The OUI-OSE dynamic

Oxford’s commercialization landscape is shaped not just by OUI but also by Oxford Science Enterprises (OSE), a £850M venture fund that holds an automatic stake in every Oxford science spinout. When a new company is formed, OSE takes 50% of the university’s 20% share - meaning that OSE automatically gets a 10% stake in every science spinout.

This setup is unique among university-affiliated venture funds. While OSE has played a massive (read: critical) role in funding and scaling Oxford’s spinouts - boasting investments in over 80 companies, including Vaccitech (which co-developed the AstraZeneca COVID-19 vaccine) and Oxford Nanopore Technologies - its dominance has also raised some concerns. Unlike Cambridge, where a mix of investors bids for deals, Oxford’s early-stage ecosystem is largely dominated by a single investor. This has led some to argue that OSE’s early ownership stake and privileged access to Oxford’s pipeline discourage a more diverse investment landscape and could lead to lower valuations.

A counterfactual (‘what would have been’) is not useful or practical: but for sure what is clear is the ecosystem would benefit from a more diverse pool of private capital to back founders coming through.

How Oxford compares to its peers

The 20% equity model is an improvement, but when stacked against leading global universities, it could still be on the high side. Here’s how Oxford compares:

• Cambridge: Averages around 10–12% equity, with lower stakes (5%) for software ventures and a higher range (20%) for deep tech.

• Imperial: Switched to a “Founders Choice” model in 2017, where founders can opt for either a 5% university stake (non-dilutive) or a more traditional 30% stake with added university support.

• MIT & Stanford: Typically take ~5% equity for an IP license, allowing founders to maintain near-total control of their companies.

• ETH Zurich: Takes zero equity in spinouts, instead structuring deals around royalty-bearing licenses, which has helped it produce over 540 spinouts with minimal friction.

Given this backdrop, Oxford’s 20% standard share - while a major step forward from its old 50/50 model - still feels slightly hefty, particularly for founders who compare their situation to more flexible models at peer institutions or accelerators.

Is Oxford still too restrictive?

Despite these reforms, some founders and investors argue that Oxford’s policies remain rigid. One issue is that the 20% stake is (relatively) fixed, rather than tailored to different industries and tech stacks. Cambridge, for instance, applies a sector-specific approach: software companies, which rely more on talent than patents, see a 5–10% university stake, while deep tech firms dealing with patented technology land closer to 20%.

Oxford’s one-size-fits-all model means that while it’s an improvement for biotech spinouts, it may still be too aggressive for software-based companies, where universities typically take much smaller stakes. This rigidity could be pushing potential Oxford spinouts to base themselves elsewhere - like Cambridge or even the U.S., where IP licensing models are more favorable.

What’s next?

Oxford has undeniably made progress, but if it wants to retain top talent and attract world-class investors, there’s still work to be done. One potential route is to reinforce the differentiated model - as per Cambridge - lowering stakes for software ventures and keeping the current model for deep tech. One issue I have with this mental model is ensuring that it doesn’t not slow down rounds - velocity of fundraising being so important; so a differentiated model without being a case-by-case model is the sweet spot. Fast, clear, but differentiated between software, deeptech/hardtech and life sciences.

Another route would be to encourage private capital - or seed new funds - in the ecosystem to facilitate early-stage investing and activate entrepreneurial pathways. There are emergent players in the ecosystem that are supporting entrepreneurs - like Zero Founders Network, Nucleate, Oxbridge AI Challenge, Oxford Seed Fund, and others. We’re also seeing private funds start in the city (e.g., Acclimate Ventures, Oxford Impact Capital) or thrive from more established bases (e.g., Oxford Capital). Supporting these to grow will help thicken the ecosystem - improve it’s ‘biodiversity’ so to speak, all to the benefit of founders.

If Oxford truly wants to lead in global innovation, it can’t just settle for ‘better than before.’ The universities it competes with - MIT, Stanford, ETH Zurich - continue to move toward more founder-friendly models. Oxford needs to consider its’ practices relative to others competing for global talent.

Oxford’s IP elephant may not be the 800 pound gorilla it once was, but it’s still in the room. To me the question remains whether Oxford will make the next move before its founders do.