From academia to start-up: how to build a successful spin-out


Jim Naismith is Founder and Technical Director of GyreOx, a biotechnology company recently set up with investment from the UK Innovation and Science Seed Fund (UKI2S). He is a global leader in chemical biology and the inventor on all of GyreOx’s patents. Jim is also Director of the Rosalind Franklin Institute, a joint industry / academic enterprise based at the Harwell Research Campus, and Professor of Structural Biology at the University of Oxford.

Here Jim shares his experiences successfully spinning-out a company from academic research and some useful tips that he’s learned along the way.

Believe in your idea

GyreOx is a biotechnology company focused on creating novel medicines that address complex intracellular targets in a wide range of diseases including cancer, inflammation and infectious diseases. Our unique platform technology combines chemistry and engineering biology processes to create a class of novel macrocyclic peptides.

Even though this is a relatively early stage technology, the reputation and track record of our lead scientist made it possible to obtain funding. We have shown that we are able to make libraries of compounds but believing in the idea was essential to demonstrate its importance and potential to investors. Often with investors you get a maybe, so you need to start with an idea that you believe in and push until you get a yes or a no.

Do right by your technology

Aspects of the development of our technology development are not suited to academic / grant funding so commercialising the technology was the next logical step in the development process. This is particularly true of scaling the technology and automating our processes.

When you start looking for funding it’s important to consider not just the money but also the type of investor that best suits your business. This is hugely dependent on whether the business needs one or a number of funding rounds, and how much is needed. Assuming that multi-million-pound, multi-round investment is planned, then by-pass angel investors; institutional investors will be needed.

Then you have to consider a series of questions:

  • Do they invest in this area?
  • Do they have a directly competitive investee company already that would preclude them from investing?
  • Can they follow on if you need more money later?
  • Who do they syndicate with at early and later stage rounds?
  • Are they an evergreen fund? If not, what is the lifetime of the fund and when do they need to return cash to their investors?

The final, and arguably most important question is, can you work with them and what additional qualities will they bring? For example, a strong network of advisors could be incredibly useful in the early stages of your company.

Utilise experience

Investors are looking for a combination of technical expertise and commercial acumen to fund a promising company. GyreOx was lucky enough to have both an experienced CEO in Bill Primrose, who had founded and funded spin-outs before, and staff ready to move from academia to the company. Our core team, including my academic partner in crime Professor Marcel Jaspars at Aberdeen University and a commercially experienced researcher, Dr Orode Aniejurengho, made an early commitment to get the company over the line which played a crucial role in the success of the whole process.

Utilising all our existing experience was essential to obtain funding, and now this has been achieved we can expand our pool of talent. Initially we were looking for additional technical skills through new recruitment plus advisors and consultants. Now we’re also keen to access experienced ex-Pharma executives, clinicians and key opinion leaders in the field to help identify the ‘sweet spot’ of the technology. Bringing on the right expertise at the right time can make or break an early-stage company.

Have a realistic timeframe

At the start of this process, the thing I wish I’d known was the realistic timeframe of spinning-out a company. Getting investors on board is a time-consuming process with lots of hoops to be jumped through. Whilst a negative response can come early or late in the process, a positive one takes time. In our case, the initial University investment was really important to get us going.

There were obviously other challenges along the way that took time. Our technology license with the University of Oxford took longer to agree than expected given the complex commercial scenarios GyreOx presented.

Understand your investors

Remember, investors see hundreds of companies, all looking for their money, so they know what they are looking for. You should ask yourself why someone should invest in your idea and how you are going to make money out of it. They are looking for sound technology that addresses a clear gap in the market with a good founding team who understand that, like the technology itself, the business model will change and develop. Investors ultimately need to believe in a multiple return on their investment, 5% year on year just does not cut it! You should therefore be sensible with your funding ask.

Not all investors are the same so understanding their differences is important. They should be able to offer you much more than just cash. For early stage life sciences seed investments, there are probably very few suitable investors in the UK. UKI2S is one of these, not only investing in risky, early-stage technologies but also providing the additional expertise and long-term capital that these technologies need to flourish.


Ultimately, we got the money! Investors were actually identified fairly quickly and stayed onside throughout the process which is not always the case. Making the transition from academia to spin-out is a complex process so make sure you have the right team in place with the drive to make it happen. Identify the investors you need and don’t be afraid to turn down investment if it’s not the right kind for your business.