Using university labs after spinout; sponsored research agreements

1. Core idea and who it's for#

A spinout rarely leaves the lab the day it incorporates. The equipment is there, the knowhow is there, and commercial wet-lab or cleanroom space is expensive. So most deeptech companies keep working with their parent university for one to three years. The main principle is that every use of university resources by the company must go through a written agreement . Without one, you risk three things:

• muddying who owns new IP;
• breaching the professor's conflict rules;
• putting the university's charitable or tax-exempt status at risk, which makes TTOs nervous and slow.

There are four routes, from lightest to heaviest:

1. Core-facility or fee-for-service use. The company pays per hour to use instruments, or pays university staff to run routine tests. The university usually claims no IP in the results.
2. Incubator or lab lease. The company rents bench space in a campus incubator, under a facilities-use agreement.
3. Sponsored research agreement (SRA). The company pays the university to run a defined research project, usually in the founder's old lab. New IP usually belongs to the university. The company gets a licence or an option to one.
4. Collaborative grants. STTR or SBIR in the US, Innovate UK or KTP in the UK, BIRAC or DST schemes in India. The university is a funded partner, and the IP terms follow the grant rules.

Who this is for: founders who need to keep using their old lab or its equipment, and want to do it in a way that keeps IP clean, keeps the professor compliant, and doesn't slow down fundraising.

2. Evidence: how universities actually structure this#

Using resources without an agreement is prohibited almost everywhere. The University of Iowa's startup guidance is typical. Employees may not use university staff, time, supplies or equipment for an outside company. Startups may not use university lab space

without an approved agreement (Iowa). Missouri's guidance says the same, and adds that startups in university space generally need an equipment rental agreement as well (Missouri).

Core facilities are open, at a price, and the IP terms can be favourable. Iowa lets facultyowned startups use core facilities, with institutional users getting priority and fees set by the company's status (Iowa). Berkeley's Research Infrastructure Commons packages this for companies. Its core-facility access, routine-services and startup lab-lease agreements are fee-based, and on their terms the university does not claim ownership of IP or materials the company generates (Berkeley RIC). For a startup, this is often better than an SRA: you pay more per hour, but you own what you make.

In a sponsored research agreement, you pay for the research, and the university usually keeps the IP. Unlike a federal grant, an industry SRA has no default rules, so ownership, publication and access to results must all be negotiated before work starts (CASRAI). Many US universities now publish tiered SRA menus. Ohio University's is a clear example:

Source: Ohio University TTO. Iowa State runs a similar three-option menu (Iowa State).

Overheads are a big part of the cost. Industry SRAs usually carry the university's full negotiated indirect (F&A) rate, which often adds 50–60% or more on top of direct costs at US research universities. Oregon's "Strategic Investment Rate" for sponsors who want IP assignment or a pre-negotiated exclusive licence is the government F&A rate plus 75% (Oregon).

Startup-specific terms exist, so ask for them. Michigan publishes a standard term sheet for SRAs with its own licensed startups. It says it will typically discount its standard licence terms when a startup has funded a substantial part of the research behind an invention (Michigan Innovation Partnerships).

3. Method: choose the lightest route that works, then negotiate the clauses that matter#

Step 1. Sort the work into types. List the work you need done in the next 12–18 months and classify each item:

• Routine measurement: characterisation, sequencing, imaging, test runs. Use core facilities or a fee-for-service agreement, and the company owns the data.
• Engineering and development done by your own staff: process scale-up, prototyping. Use an incubator lease or a facilities-use agreement with your own employees on site, and the company owns the results.
• Open research questions that need the professor's group: new mechanisms, new materials, basic science. Use an SRA, and accept that the university will own new IP subject to your option.

The common mistake is putting everything under an SRA. You then pay full overheads and give up ownership of what is really development work.

Step 2. If you need an SRA, negotiate these clauses.

• Scope. Keep the statement of work narrow, so what isn't covered stays clearly yours. Option to the IP. Get an exclusive option on all project IP within your licence's field. Better still, pre-agree that new IP is added to your existing licence automatically on the same terms, as an "improvements" amendment. This avoids a second negotiation for each invention.
• Option period. Usually 6–12 months after each invention is disclosed. Make sure it starts from disclosure to you, not from the date of the invention.
• Publication. A review window of 30–90 days for patent filing, with no veto over publication. Students' theses are protected (2.13).
• Background IP. Make clear which existing university IP you need, and that it is covered by your licence.
• Overheads. Ask for the startup or SBIR/STTR rate. Some universities discount F&A for their own licensees, or for small budgets.
• Conflict plan. If the professor holds equity, the SRA will usually need a conflictmanagement plan with an independent monitor, and students may need a co-advisor. Budget the time for this.

Step 3. If you lease space or use facilities, check:

• the term (often 1 year, renewable) and how much notice you get before eviction;
• the IP clause (the university should claim nothing in your employees' work);
• insurance and health and safety training;
• access for non-university employees;
• whether university staff can work for you on site. They usually can't without a consulting agreement.

Step 4. Keep the paper trail clean. Use separate notebooks, separate data repositories and separate purchasing. Company staff should not run experiments for the university, and university staff should not run experiments for the company, unless an agreement covers it. Investors' due diligence will ask for these agreements.

Step 5. Plan to leave. An SRA that lasts too long becomes a dependency: the company's core know-how sits in a lab it doesn't control. Aim to move core development in-house by seed or Series A. After that, use the university for genuinely exploratory work.

Worked example (illustrative)#

A quantum-sensing spinout needs three things in year 1:

• about 200 hours on the university's cleanroom and SEM, for device fabrication;
• bench space for two company engineers;
• a research project in the founder professor's group on a new diamond-defect material.

Cost of each route:

The company negotiates the SRA under the university's startup term sheet:

• Any project IP is added automatically to its existing exclusive licence in the quantumsensing field, with no new upfront fee, at the licence's existing royalty.
• Publication review is 60 days.
• The professor's conflict plan names a department colleague as monitor.

By contrast, putting device fabrication under the SRA too would have cost overheads on top of $30,000, and the university would own the fabrication process improvements.

4. India / US / UK differences#

India#

• Campus incubators are the main route. Incubators at IITs, IISc, CSIR labs and C- CAMP usually give access to central instrument facilities, often at a member rate below the industry rate. Use the incubator's facility agreement rather than informal lab access.
• Sponsored or consultancy projects. Run them through the institute's industrial consultancy and sponsored research office, for example IIT Madras's IC&SR. Overheads on industry projects are usually lower than at US universities. Read the institute's IP clause carefully: many default to institute ownership, with a licence to the sponsor on negotiated terms.
• NISP asks faculty to keep institute research separate from startup work, and lets startups use institute infrastructure under agreed terms (NISP summary deck).
• Government grants. BIRAC and DST grants where the institute is a partner often set the IP terms. Check the scheme rules before you sign the agreement with the institute.

US#

• STTR requires a research-institution partner. The small business must do at least 40% of the work and the institution at least 30%, and the two must sign an IP allocation agreement before the award. It is the most common non-dilutive way to fund an SRAlike project. SBIR and STTR were reauthorised through 30 September 2031 by a law signed on 13 April 2026, after a six-month lapse (Crowell & Moring). See 13.08.
• SBIR allows universities to be subcontractors on a smaller share of the work. BayhDole and the funding agency's rules then govern inventions.

• Tiered SRA menus are now common, for example at Ohio, Iowa State, Michigan and Oregon. Ask the TTO for its startup tier before negotiating from a blank page.

• Conflict-management plans are usually needed when the PI holds equity. Expect review by a university committee, which can take 1–3 months.

UK#

• Collaborative R&D. Innovate UK grants and Knowledge Transfer Partnerships (KTPs) fund company–university work. The grant terms and a collaboration agreement set the IP, often based on the Lambert Toolkit model agreements.
• Catapult centres and university core facilities provide access to equipment at commercial rates, usually with the company owning the IP.
• The university often holds equity in the spinout. A spinout SRA with its parent university is a related-party transaction. Investors will check it is at arm's length and that new IP flows into the spinout's licence. The Independent Review encouraged clearer, faster processes for this (see 2.07 and 2.10).

5. Scripts, mistakes, related playbooks and sources#

Scripts#

Asking the TTO for startup terms:

"We're a licensee of the university and want to fund about $120,000 of follow-on work in Professor X's lab. Do you have a startup tier or term sheet for sponsored research? Could new IP from the project be added automatically to our existing licence?"

Separating development from research:

"Most of what we need is fabrication time and measurement, which we'd like to run through the core facility under the standard external-use agreement, done by our own staff. Only the materials question needs the group's research expertise, so we'd like to keep the SRA narrow and limited to that."

Negotiating overheads:

"This is a seed-stage company spending its own seed funding. Is there a reduced F&A rate for licensed startups, or for projects under $150,000? Alternatively, could we structure part of this as an STTR?"

Common mistakes#

1. Informal use of the lab after incorporation, with no agreement. This is the most common diligence red flag and creates doubt about who owns the IP.
2. Everything under one SRA. You pay full overheads and give up ownership of development work you could have owned.
3. An option with no pre-agreed terms. Each new invention then needs a separate negotiation. Ask for automatic addition to the licence, or pre-set terms like Ohio's tier 2.
4. Ignoring the professor's conflict plan. The SRA stalls for months in committee.
5. Staying dependent. The core know-how stays in the university lab past Series A, and investors see a company that can't operate on its own.
6. University staff working for the company without a consulting agreement. This breaches their employment terms and confuses inventorship.

Related playbooks#

• 2.07 Licence terms
• 2.10 Negotiating with a university
• 2.12 Professor as co-founder
• 2.13 Students and postdocs as founders
• 2.15 Licensing from government labs
• 13.08 US SBIR/STTR
• 14.10 The seed data room

Sources#

• Flexible options for sponsored research, Ohio University TTO
• Flexible Solutions, Iowa State University
• Industry research process, University of Oregon
• Certainty at Michigan and the startup SRA term sheet, University of Michigan
• Applicable policies for startup companies, University of Iowa
• Startup company resources, University of Missouri
• Berkeley Research Infrastructure Commons, UC Berkeley
• Industry-university research partnerships, CASRAI
• SBIR/STTR programs reauthorized after six-month lapse, Crowell & Moring
• National Innovation and Startup Policy 2019, summary deck, MoE Innovation Cell and AICTE

The worked example is illustrative. Its rates and costs are assumptions, not quotes from any university. Last checked November 2026.