US spin-out formation rebounds from slump, AUTM survey finds

The pace of forming academic spin-out companies picked up in the US in 2004 after a two-year slump, according to a survey released today by the Association of University Technology Managers (AUTM). Also, it said, research funding at US institutions rose 7.1 per cent over the prior year.

"Survey results show a continued steady growth in the technology transfer field," said Ashley Stevens, editor of AUTM’s fiscal year 2004 US Licensing Survey Summary, in a statement. "Perhaps the most dramatic survey result is the number of new companies based on academic research that launched in 2004 - almost 25 per cent more than in 2003." He added that the number of new companies reverses declines in 2002 and 2003, when the economic climate made it harder to get early-stage funding.

The survey showed that 462 start-up companies were launched by 191 institutions in the United States and Canada, up 23.5 per cent from the 374 reported by 190 institutions in fiscal 2003. And 74.5 per cent of them remained in the home institution’s own state or province once they were spun out.

A new question on the annual survey found that almost half of the start-up companies in 2004 got their first investments from individuals, with friends and family leading the list of financial supporters. Venture capital supplied less than 20 per cent of the funding for new companies.

There were 67 venture-backed initial public offerings (IPOs) in 2004 that raised $4.98 billion versus the 22 IPOS that raised $1.4 billion in 2003. Mergers and acquisitions also rose with $22.4 billion in transactions in 2004, up from the $12.9 billion in 2003.

Invention disclosures at US institutions rose 8.8 percent over fiscal 2003 to 16,871. The institutions also executed nearly 4,800 new licenses or options, up 6.1 percent over last year. More than two-thirds were with new or existing small companies.

One important measure was down, however: US patents issued. They declined 6.4 per cent to 3,680 from 3,933 in fiscal 2003. The survey said the decline appeared to be "consistent with long-term growth trends."