The Quick Start initiative is a simplified process that will allow faculty to focus on the development and commercialization of products and is meant to streamline the contract negotiation process. Gone are upfront fees and performance payments so as to encourage the entrepreneurial efforts at Washington University. The Quick Start License is also designed make university startups more attractive to potential investors and should increase the success of the university startups. OTM has created a User Guide to give a better understanding of the Quick Start License. Please also review the Frequently Asked Questions for a better understanding of the Quick Start License. Some of the general terms of the Quick Start License are summarized as follows:
- An exclusive license with right to sublicense
- No payment for past patent costs – future patent costs to be paid by Licensee
- No upfront, annual or milestone fees
- Financial and diligence performance milestones based on a detailed business plan
- No equity for Washington University
- A fixed 2% patent royalty rate on sales of any product(s)
- No minimum annual royalty payments
- A sliding sublicense revenue starting at 15% that steps down to 5% over five years
- A 0.95% “success fee” at an exit event of the company
Washington University faculty and employees (graduate students, post-docs and staff) who are creators of an invention and have interest in obtaining a license from OTM for their startup company can start the process by contacting your OTM Licensing contact or OTM at (314) 747-0920.
In an effort to spur innovation and entrepreneurship efforts in the Saint Louis region; Washington University’s OTM is offering a simple, ready-to-use license agreement for start-up companies based on the university’s patented intellectual property. The license agreement has been vetted by local community leaders, venture capitalists, contract attorneys to arrive at terms and conditions that are deemed fair and reasonable to Washington University and the start-up company. The Quick Start License has a back-end loaded deal structure with no upfront payments, no past patent costs, no annual minimum fees, no minimum royalties, one low flat patent royalty rate and a success fee at the time of an exit/liquidation event. This would allow start-up companies to invest time and effort in developing the university technology.
The primary objective is to streamline the contract execution process for both parties in an effort to reduce the ensuing legal costs and increase deal flow. In order to qualify for this license the below mentioned terms and conditions should be met:
- You are a Washington University employee, a founder of a start-up based on a solely owned patented Washington University intellectual property (Washington University IP) and an inventor on any such Washington University IP
- The patented Washington University IP is the basis for forming the new company
- A detailed business plan is provided to the OTM business manager handling the specific patented technology
- A CEO (preferably a person with experience and not the PI) and an experienced management team with a proven track record is in place to lead the commercialization of the licensed Washington University IP
Quick Start License Approval Process
The use of Quick Start license is contingent upon the submission of a business plan and approval by OTM. Once you have identified the Washington University IP you are interested in licensing, please contact the OTM business manager who is handling the patented Washington University IP. If you do not have an OTM business manager, please contact OTM at (314) 747-0920 to have one assigned to you. Your OTM business manager will keep you updated and request additional information/meetings as required. Please be prepared to submit the following documents for the review process:
- Detailed Business Plan as per specifications provided below.
- From an institutional standpoint: the OTM business manager will co-ordinate the process once the business plan is approved prior to the execution of the license agreement.
- As a Washington University employee and company co-founder you may need to obtain a separate conflict-of-interest approval from the CIRC. This process is independent of OTM and you are responsible for initiating and completing this process.
- The Quick Start license will be executed only upon completion of the COI approvals.
All start-up companies must submit a business plan to qualify for the Quick Start License. The plan must be written by the team (CEO, CBO, key leaders) who will be leading the company with help from consultants/advisors. The business plan serves as a blueprint outlining the company’s vision for the university technology and the commercialization pathway it intends to adopt. This is the centerpiece of the start-up enterprise and therefore utmost care and diligence must be taken in drafting this document and coming up with meaningful diligence milestones. The OTM business manager will contact you if there are additional questions/concerns. The execution of the Quick Start license is contingent upon satisfying any concerns/questions that may arise upon internal review of the Business Plan. While every attempt will be made to work with the start-up to ensure that it qualifies for the Quick Start license, Washington University will determine whether or not a start-up company qualifies for the Quick Start license.
- Company information
- Name of company, address, nature/type of the company organization, and articles of incorporation.
- Name of CEO and founding members and defined roles, number of employees: bio data and role of each individual (employee/consultants/advisors etc.)
- Names of the members of the Board of Directors
- Start-up governance and ownership
- Funding status
- current investors -level of funding provided by each investor, background /track record for each investor
- available funds and projected burn rate
- timeline for fund raising efforts
- financing objectives and plans, valuations
- company pro-forma financials
- R&D development timeline
- include detailed timelines and research and development (R&D) timeline, e.g. therapeutic — IND, Phase I, II, III, NDA filing timelines
- provide diligence milestones in order to arrive at a go/no go decision with respect to the licensed WUSTL IP
- operating plans for R&D
- required partnerships or alliances needed for milestones
- Target market
- Details regarding at least one lead indication/target market
- prevalence, incidence
- unmet need
- target market size : penetration rate, 3-5 year net sales forecast
- projected selling price, gross margins
- Details regarding at least one lead indication/target market
- Marketing strategy
- primary markets
- distribution channels
- potential partners
- competitors: clearly outline the unique selling proposition (product/ service) , potential risks, market entry strategy, SWOT analysis
Contacts and Communications
The primary and first point of contact for Quick Start license at Washington University is the OTM business manager and at the company contact should be the CEO or his/her designate. The Washington University faculty member who is the founder of the company should not be the primary point of contact for the company.
Frequently Asked Questions
1. Who qualifies for the Quick Start License?
If you are a Washington University employee, a founder of a Startup based on a patented (solely owned) Washington University intellectual property (WUSTL IP) and an inventor on any such WUSTL IP.
2. I am a Washington University employee and a co-founder but not an inventor on the Washington University IP. Will my company qualify for this license?
No, you will not qualify (please refer to question 1).
3. I am a Washington University employee, an inventor and a co-founder but the Washington University IP is jointly owned with another university. Will my company qualify for this license?
Yes, but only if the third party is willing to accept the terms and conditions of the Quick Start License.
4. I am a Washington University employee and an inventor but not a co-founder. Will the company qualify for this license?
No (please refer to question 1)
5. I am a Washington University employee, an inventor and a co-founder of a company that has executed a license with Washington University previously. Can I re-negotiate the terms of the previous license?
No, you will not be able to re-negotiate the terms of the previous license.
6. What happens if an inventor wants to start a company but his fellow Washington University co-inventor(s) do not?
The Washington University inventors will need to resolve this issue independent of OTM. The formation of a Washington University start up should be agreed upon by all inventors.
7. Who do I contact to discuss the Quick Start License?
Please call OTM at (314) 747-0920 and you will be connected to the appropriate business manager. If you already work with an OTM business manager, you can contact him/her directly.
8. Is the Quick Start License negotiable?
No, the terms of the Quick Start License are fixed and if not acceptable, a more detailed and time consuming exclusive license agreement template will be used.
9. I have a few edits to the Quick Start License; what do I do next?
This agreement is intended to not require edits. However, if there are specific concerns you may discuss it with your OTM business manager. Please note that a request for additional edits will slow down the execution process because OTM will need to involve the Office of the Executive Vice Chancellor & General Counsel to review and comment on any such edits.
10. I do not have a business plan, can I sign the Quick Start License and submit the business plan later?
11. I am uncertain what the diligence milestones are at the current time point; can I provide them post-execution of the Quick Start License?
No, you will not qualify for the Quick Start License. The diligence milestones should be part of your business plan.
12. What are the salient features of the Quick Start License?
In order to expedite and simplify the contract process and lessen the burden on startup companies, the Quick Start License template has a simple deal structure with one flat royalty rate, a low success fee at the time of liquidation/IPO (initial public offering), waiver on all past patent expenses, no upfront fees, no annual maintenance fees and no minimum annual royalties. However, the licensee will be responsible for all ongoing and future patent costs post-execution of the Quick Start License. Washington University will be in control of the prosecution process but the licensee will be copied on all relevant correspondence and have time for comment.
13. Will I be able to license copyrights, software or unpatented technology under this license?
No. Under this license you are able to license only patented technology. A non-exclusive license to tangible research property and technical information is also included in the Quick Start License to the extent that such a license is needed to practice the licensed patent rights.
14. Why are the non-financial and financial diligence requirements important?
The diligence requirements are critical checkpoints that ensure that the Washington University startup is working diligently towards commercializing the licensed technology. This metric can also be used to track and monitor the progress of the licensee throughout the term of the agreement. This licensing consideration is of paramount importance to the university.
15. What is a Success Fee?
Success Fee means the rate that will be used to calculate the amount that Licensee shall pay to Washington University upon a liquidation event or Initial Public Offering (IPO). The success fee rate for the Quick Start License is 0.95%. Please note that this provision shall survive the termination or expiration following the 5 year anniversary of the Quick Start License.
16. What other approvals are required for the Quick Start License?
OTM will confirm that appropriate conflict of interest approvals are obtained prior to the execution of the Quick Start License. If the company is located outside of the United States, OTM may need to obtain an export control waiver.
17. Where can I find a copy of the Quick Start License?
Please see the forms box at the top of the page.
18. Are there scenarios where a quick start license would not be appropriate to use with an otherwise qualifying start-up company?
Yes. In addition to meeting the described criteria for a quick start license, examples where the terms of a quick start license would not be appropriate may include license requests that involve
(a) a patent application that has been filed as a non-provisional, PCT, or foreign filing;
(b) multiple patent estates that could give rise to distinct product families;
(c) 2 or more distinct patent families;
(d) jointly owned intellectual property.