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Phil Morle 🖖🏻

1y ago

Partner at Main Sequence - VC purpose-built to create global companies from scientific ideas with the inventors who imagine them. https://philmorle.substack.com

Carry as alignment in tech transfer offices?

Deep tech startups are not destined for success from the moment they spin out of a university. When they leave the nest to survive on their they must brave the daily attack from an outside world.

In venture capital, we know this. When we make an investment, we are making decadal commitment to a company. We know that companies falter many times along their lifetime and we are there for them to assist when it happens.

There are also opportunities that we see for our companies when we are in other environments and we are constantly bringing this advantage to companies to benefit from. This is still happening in years 7, 8, 9...

These activities are things we could do, or not do. No one would know if I saw a valuable opportunity for one of our companies and I did not bring it to them. If a company that I invested in fails, well, that's a shame, but that's on them.

But it does not happen. I am vigilant, obsessed, constantly scanning the universe for threats and opportunities.

To incentivise this, I am entrepreneurially aligned with the startup through the venture fund equivalent of equity that we call "Carried Interest" or "Carry". After our investors have been paid, some of the returns flow into a carry pool which is then distributed to the investment team. Some investors become very wealthy through their carry. And if the companies all fail, we get nothing.

I wonder what would happen if university tech transfer offices incentivised their teams this way?

WDYT?

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