I am excited to be leading Ploughshare at this pivotal time for government innovation. At Ploughshare we have a track record of taking innovations owned by the Ministry of Defence to market through licensing to existing and new companies, and we are now at the forefront of an entrepreneurial shift in government. By providing tailored support to promising early-stage ventures, whose foundations will be rooted in pioneering government-born intellectual property, we will provide the runway they need to get them established and operating in the marketplace. We are perfectly positioned to help realise the full potential of the growing pipeline of government innovation: from a predictive test for sepsis, that has to potential to save millions of lives a year, to technology that allows fingerprint recovery from ‘impossible’ surfaces, leading to criminal convictions from cold cases.
Through this new Ploughshare Playbook, we introduce, demystify, and take you through the journey of how we transform high-potential government innovations into successful spin-out ventures. Whether it be how we connect a group of experts to assess the market and impact potential of new innovation or how our founder-friendly approach encourages entrepreneurship, this Playbook will help to guide both aspiring and current spin-out founders and government departments through our spin-out journeys.
And for the wider investment and entrepreneurial community, we hope to provide you with an insight into how Ploughshare implements a tailored and unique approach to support promising early-stage government ventures from ideation to growth.
Hetti Barkworth-Nanton,
CEO of Ploughshare
With the right direction, pace and backing, we can breathe life into many more scientific and technological breakthroughs that transform the lives of people across the UK and the world.
Ploughshare’s purpose is to take scientific and technical innovations developed in government departments and find ways for them to benefit the UK economy and society as a whole.
Since our inception in 2005, when we were created as a result of the increasing commercialisation activities conducted by the Defence Science and Technology Laboratory (Dstl), we have been wholly owned by the Secretary of State for Defence but operate completely separately. This allows us to engage with industry to negotiate licence deals and create spin-outs — ultimately leveraging government innovations for the good of society. We have established ourselves as an integral part of the Ministry of Defence (MOD) technology transfer ecosystem, increasing its defence and security capability, and continuously bringing the same impact-driven, people-connecting ethos to our work with other government departments.
We prioritise outcomes that maximise a positive impact to UK plc and society as a whole. This is measured in both economic factors and societal benefits, such as lives saved and the contribution made to the regeneration of our planet.
The 2021 Mackintosh Report, ‘Getting smarter: a strategy for knowledge & innovation assets in the public sector’, highlighted the breadth of UK public sector knowledge assets. The government is investing £14.9 billion in research and development (R&D) in 2021-22, its highest level in real terms for four decades. Those assets need to be invested in and nurtured wisely to deliver on their enormous potential to boost economic and societal benefit. Ploughshare is the hub that will be part of making this happen.
Up until now the focus of our activities has been licensing. We are now ramping up our support for spinout creation. Due to their dynamic and agile nature, spin-outs will play a major role in creating and increasing the positive impact that can be realised from the IP owned by government departments. This impact can be measured in two dimensions, economic impacts and benefits to society.
The economic impact our spin-outs can have is wide ranging and will have a direct and positive impact on the UK economy from the day the business is able to operate. When we combine the direct and indirect effects which result from our spin-out’s activities, the main areas in which they benefit the economy are:
Some of the societal benefits our spin-outs create are:
When a spin-out is created, the teams are focused on maximising both impact and returns from their innovation over the longer term for all stakeholders involved.
This playbook was created to support our overall mission to transfer innovations out of government labs and into the hands of users for the realisation of wider, positive impact and benefit to society.
Through this playbook we hope to demystify the Ploughshare spin-out process and provide relevant information for spin-out founders and government departments who want to better support new innovations. For the wider investment and entrepreneurial community, it also provides an insight into the type of innovations we have successfully developed into spin-outs. It contains a wide range of information about our spin-out process and associated specific resources from the government and Ploughshare, as well as material focused on the key stages of developing into a viable business from ideation to growth.
As there are so many stakeholders involved in creating a spin-out we have chosen to address this playbook to inventors and founders – in the early stages you have the most decisions to make and it therefore makes the language easier to follow for everyone. All the information our other stakeholders will need is in here and we hope you will find it a useful and informative guide.
We value feedback and suggestions from readers to develop future iterations of this playbook, please contact us at info@ploughshare.co.uk
This 10-step journey is a simplified representation of our spin-out process to give you – the inventor of a new innovation in government – and our other stakeholders a better understanding of what they should expect.
Once you – either as an individual or as part of a team – have generated an innovation, you will disclose a description of its elements through the relevant processes within your government department.
Each disclosure must be reviewed to assess its commercial potential. The responsible government department will assess and prioritise which IP is ready for Ploughshare and, where relevant, they will put IP protection in place, such as filing a patent. When Ploughshare receives the IP disclosure, we will review it further to see whether it has potential for licensing or as a spin-out. Steps involved in IP validation include:
Ploughshare will assess whether there is a viable spin-out opportunity for
the innovation through in-house analysis and by liaising with multiple stakeholders, including inventors and independent experts, to better understand the market opportunity. The outcome of this step will determine whether a spin-out is viable through:
The impact assessment will consider the maturity of the spin-out venture opportunity and the size of its potential impact measured by economic value, financial sustainability, humanitarian impact, and wider governmental benefit. The outcome of both market validation and the application of Ploughshare’s impact-maturity matrix will determine whether the spin-out opportunity will be progressed.
Once the decision is made to form a spin-out, the preparation phase starts and the fundamental foundations of the legal terms that underpin the new venture can start to be formed. This will include finalising the business name, registering and incorporating the business, and initiating discussions with the founding team on the potential deal terms for the IP licence. At this point there will also be a starting ownership structure to discuss with founders based on our spin-out pathways.
The Ploughshare Accelerator Fund (PAF) was set up to support licensable technologies and spin-outs with the necessary funds to accelerated IP towards impact and help gain early momentum. We will work with founders to decide whether this funding is applicable and, if it is, the level of funding applied for will be assessed on the specific circumstances of the spin-out and IP. If a joint decision is made by Ploughshare and the inventor(s) to apply for PAF funding and this application is successful, the spin-out will receive additional venture development support which comes with additional financial terms and Ploughshare receiving additional equity.
Once all the key decisions have been made during the spin-out preparation phase and founders have decided on the spin-out pathway they will follow, we will provide support to ensure the business is legally and financially ready to operate. This will include appointing external advisers and putting in place the relevant contracts. We will help the founders to:
If the spin-out utilises PAF funding Ploughshare will provide dedicated venture development support. Typically, this will include the recruitment of a CEO, product and business development, and customer introductions.
There will be a final review of all spin-out documents which includes the Articles of Association, Shareholders Agreement and IP licence agreement. At this stage, all the work done throughout the journey to develop the business from market validation to assessing monetisation opportunities will have been brought together in a final detailed business plan. At the completion step, we will hand over full operation and running of the spin-out to the founders and any appointed executive team members.
To support the venture’s continued growth, founders may choose to seek additional support from our team of experts, for example, to recruit additional executive team members and ask for help to secure follow-on financing. Support could be:
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