As a Life Sciences Companies, you want to get all fields of use. And the reason being is, you know, any bad data. Is going to be bad across the board.
Hello, and welcome to the Founders' Shares Podcast, brought to you by Hutchison PLLC, a law firm in Raleigh, North Carolina, that helps founders and entrepreneurs in technology and life science companies start up, operate, get funded, and exit. So whether you're already an entrepreneur or want to be one someday or are just fascinated by the stories of how business goes from idea to success or not such a success, this podcast is for you.
Today's guest is my law partner, Dan O'Korn. He's an experienced life sciences attorney with a focus on licensing and development transactions within the pharmaceutical and biotech sectors. Dan's expertise includes licensing, regulatory matters, and strategic alliances. On today's episode, we take a deep dive into one particular aspect of dance practice, and that is The University license.
Many great companies on the life science and technology side get their start as research within a university. How this technology goes from academia to the marketplace and how to set your business up for success is what we discussed today. Dan underscores The pivotal role of involving an attorney early in the University licensing process. Waiting to involve an attorney until the drafting may be too late.
New clients will come to me and say, well, I have this term sheet we already negotiated, right? And Now we're going to put it into a license and, you know, they'll send over the term sheet. And just some of the terms are not market. In their mind, they're thinking, well, I'm not gonna spend money on a lawyer until we get to the license agreement, but you may end up spending more. If you have to walk back some of these things.
With so many critical terms to consider, it's important for the startup to have the benefit of counsel who's walked this path before and can help streamline the process. This early engagement also helps as the company grows to know you have a partner who's been with you from the beginning.
That's one of the great things about our practice is that, you know, particularly as it relates to university licenses, we see these things from the ground floor. I mean, these are. These are untested. These are most of the time patented technologies. So there's some sort of proof of concept. You know, we're on the ground floor. And so, you know, seeing those things from that perspective is pretty neat.
I think this is something that maybe not a lot of people think about or may not be familiar with, but the idea of a university license or a spin-out license. Talk to us a little bit about that. What is it and why would somebody need that?
Yeah, so when you break it all down, a University license is basically a license of technology that is developed within The university, so it's owned by the university. And in order to get it out of the academic setting, it needs to go to an entity that can continue to develop it outside the constraints of an academic setting. Right.
And so who needs to be thinking about these types of licenses? Yeah.
So typically, it's The professors within the University. Most of our startups are founded by The folks that are instrumental in developing the technology within the University, usually professors. So we see a lot of that. But there are also licenses out of technology to business folks who aren't associated. So we see a lot of that. And so we're trying to work with The University. For example, some universities will post on their Tech Transfer Process & Its Origins websites available technology.
Okay. Because they see. An opportunity to monetize the assets. And sometimes, you know, the Professor is just not interested in that. So they look for other folks to partner with to take the technology out and further.
I think that's helpful because talk a little bit about the different stakeholders. Because you mentioned the fact that you've got a Professor who's maybe done some research and has some valuable technology. You've got The University. You've got The potential for business, but why is the University interested in it? Why are the professors interested in it? Talk through some of the stakeholders there.
Yeah, so I guess for the last, I don't know, 30 to 50, 40, 50 years, universities saw a way to monetize The assets that are coming out of the University. I think, you know, dating way back to Gatorade, right? You know, that's one of the examples of how, you know, University of Florida, you know, monetized Gatorade and, of
course, did very well with that. And so. That kind of snowballed within that university and others where they saw an opportunity to be a profit center eventually for their technology.
And I guess that's it. For The University, is that the primary goal, is to find another revenue source to kind of support the research?
Well, I mean, they will tell you it's in order to foster the development of technology. But I think universities are given a mandate. They're expected, the Tech Transfer Process & Its Origins offices are expected to make money for The University. So it's become a little bit of a business. And so it's not just sort of the pursuit of education and research. It's really to use those assets to bring in money to fund other things.
Right. And you mentioned the Tech Transfer Process & Its Origins office. Talk a little bit about that. What is that? How does that work?
Yeah, most universities have a Tech Transfer Process & Its Origins office. They'll call it different names. But essentially what happens, is if a Professor has technology that they believe, at least in the life science area, that they believe is patentable, they'll take it to the Tech Transfer Process & Its Origins office. They'll take a look at it. They will decide whether or not to pursue. File a patent application on it. Okay.
That The University will.
Yeah. But it's within the Tech Transfer Process & Its Origins area. So, you know, the, the inventor will provide a disclosure statement. And then the Tech Transfer Process & Its Origins has professionals that know what is and is not patentable and what the business case might be for it. And so they'll invest resources up front, too. You know, initiate the patent application process.
And do you see a lot of this driven by the professors themselves, or is a lot of it driven kind of in balance with the Tech Transfer Process & Its Origins office?
I think there's a little bit of balance, and it depends on the Professor. You know, as I said, some professors aren't, you know, that interested in the commercial aspect of technology. So they're more interested in publishing, right? Right. And so, you know, in those instances, you know, they have to disclose to The University. So it gets to The University. But whether a Professor pushes it to a commercial direction depends on the Professor. Right. Because a lot of these technologies
are dependent on. The Professor. You know, they invented it. They've got the know-how. You know, it's difficult to go forward without them. Right.
Now, We've talked about it kind of from the professor's perspective. If I'm a grad student or kind of like a student in somebody's lab, is this something that I have to worry about at all? Is this something that is really just a part of whatever lab I'm working out of?
Yeah, so typically if you're working with a lab, it's within the professor's... Gamut so so anything through there is is created and owned by The University There are opportunities for students and grad students to develop technologies within The University and also. Transfer the technology.
And is the Tech Transfer Process & Its Origins office... I don't know. Not a relatively new concept, but is it something that has... Grown kind of in the course of your career? It has.
It has. It's grown to each university has a, well, not each, but the ones that are focused on this. Have pretty robust groups. And there's a trade association called AUTUMN. And I've drawn a blank on what that stands for, but basically it's an association of Tech Transfer Process & Its Origins professionals. And so that, I think, has fostered the growth from within those groups too.
So as you think about it, because I know you do university licenses and you do kind of just general business to business licenses. How does a university license differ from kind of the other licenses that you work on?
Yeah, I guess a couple of ways. You know, universities try to license out the technology sort of as is, right? You know, they don't want to make any representations or warranties. They want to disclaim almost all liability. And so those are sort of the things that you don't see in an industry license. And when we talk about industry licenses, it's usually between, you know, biotech and pharma companies, you know, opposite each other. And there you have, you know, a lot
more reps and warranties. You have a lot of allocation of liability. You know, in The University license, and I'm sure we'll get to this, you know, the university usually takes some sort of equity, whether it be in common share or exit fee, whereas you don't typically see that in an industry license.
Okay. And I guess it gets back to it, but... What is the university's goal kind of setting up these licenses and the protections here? I mean. I guess what I'm getting at is here, there's got to be some alignment of interest between whatever company is being formed and The University and making it so. A business can be made out of it. How do you think about that?
Yeah, so at the outset, as I mentioned, the universities want to... Limit their liability almost entirely. And so, you know, that's from a, from a business perspective, you know, that. That starts the company off on not a bad footing, but a limited footing. Right. And so. With these technologies. It takes a lot of money, right? So once the company starts raising money. I think then The interest between the company and the University become a little bit more aligned because
they see something a little bit more real. Okay. A little bit more advanced. And so at that point, they can become more lenient on certain terms.
So aside from kind of like the liability. Exclusion? Are there other kind of non-negotiables that you see from The University standpoint?
Yeah, I think, you know... In terms of what we talked about, the liability, the... Lack of representations and warranties sort of as is. I think the scope of the license in terms of, you know, what the... If there's know-how involved, what does that mean in terms of this particular asset? You get in discussions about what is and is not included in sort of sub-licensing revenue, and we can get to that later. So those are some things.
Okay. So... As you think about it, and people will roll their eyes at this a little bit, asking the lawyer when they should. Invite, you know, involvement of a lawyer, but are there negotiations that the Professor can have kind of with the Tech Transfer Process & Its Origins office versus having outside assistance? Or is it something that you really kind of encourage people early, earlier than later?
Yeah, I mean, again, you know. Advertisement for lawyers, as you mentioned. Right. But, you know, the sooner they get us involved, the better. You know, sometimes... Clients, new clients will come to me and say, well, I have this term sheet we already negotiated, right? And Now we're going to put it into a license. And, you know, they'll send over the term sheet. And some of the terms are not market. Right. And it's always hard to walk those back, even though the term sheet's
not binding. But I encourage our folks or our clients to get us involved at the term sheet stage before they agree to a term sheet. That actually helps the client because it streamlines the license process. So in their mind, they're thinking, well, I'm not going to spend money on a lawyer until we get to the license agreement. But you may end up spending more. If you have to walk back some of these things.
Well, and I think we've said it on the show before, your terms never get better from the term sheet stage to the license stage. It may actually get worse. So, I mean, if you're really thinking about when you want to involve an attorney. Yeah, the term sheet stage is really where you need to start thinking about that. So are there issues or kind of... Is it safe for the Professor to talk to the Tech Transfer Process & Its Origins office as an outset? How do you think about that?
Yeah, I think... I think it's normal and customary for them to start the dialogue. Yeah. And start talking about a term sheet. I think where we want to make sure we're getting involved and where the sort of the point of no return is. When they actually receive the term sheet. I think that's where, if we're not involved by then, then it can cause. You know. Heartache later. Right.
Well, so as we're talking about a term sheet, what are some of the terms that you see negotiated and where you can really kind of add some value as the attorney, as the business folk to kind of contribute? So maybe start with some of the financial consideration levers.
Yeah, and these term sheets are heavily financial terms, right? The legalese. Is not necessarily a part, although some of it is. Some of the terms are in there. But a startup company can expect sort of buckets of financial terms. The first is a license fee. What's the upfront fee to get into the game? What's the ante? It's usually very modest, you know, between $1,000 to $5,000, right? Just to make sure The University wants to know that they're serious.
Right.
You know, the next probably bucket to be aware of is, and some people don't think about this, but it's the reimbursement of patent expenses. All The patent expenses that the University incurs up until the effective date of the license, they expect the company to pay for. And one of the things that, you know. We can add value is, you know, the term sheet almost always is going to say, upon signing the agreement, you're going to pay all these fees. Right. Well, sometimes
the fees are... Can get pretty high.
Right, yeah. I mean, I don't think a lot of people appreciate some of the patent prosecution expenses that can be associated with significant technologies, life sciences. Yep, exactly.
And so we can negotiate payment plans on that. And that's very helpful for the startup company because the startup companies don't have cash, right? The next bucket is going to be the royalty rate. And universities are typically very reasonable on their rates. We're talking... For a life science product, 4% to 6%. Those sometimes are tiered. And when I say tiered, I mean based on annual net sales. So typically the more...
You sell, the higher the rate goes up. So it can be reverse in certain circumstances, but sometimes universities will look at that. Next bucket. Is milestone payments. So if, you know, and I'm talking in the terms of regulated products. So say, for example, it's a drug, The University might want. X amount upon completion of a phase one clinical study. And those are always tough because... What The University is asking investors to do is pay for those milestones as opposed to using that
money for further development. That's when we talked about maybe the alignment later on. You know, can change and The University might be. More amenable to working with the company on those. Sub-licensing fees. So The University will want a percentage of all proceeds from a sub-license. This protects The University because, you know, if... If I take a license as a startup, and then turn around and sub-license it for $10 million. The University doesn't see any money that any
of that money. Right. Those are always hotly negotiated, especially in the regulated areas, because. You want to have a percentage based on how far the development is. So in other words, if you sub-license it early on, the sub-license fee would be higher. Right. As you put more money into the development and then sub-license, it makes sense that the fee would be less.
So talk through a little bit about what counts or would qualify as a sub-license that is subject to this kind of additional fee. You know, is it... I sub-license out some manufacturing rights and they go out and sell that. Is that going to be included within that? Or is that kind of more standard to the typical, the normal royalty?
Yeah, so again, in the life science context, it's... It could be a couple different forms. It could be, so let's say the technology has application in cardiovascular. And. I don't know, immunology. But we're a cardiovascular company. So we may license the technology to a company who is specialized in that. Indication. Okay. And so they would basically have all the rights we would have except for that. In that field. The other way we would typically
see it is territorial license, sub licenses. So if we're a US-based company and we don't have any... Development or commercial capabilities in Asia, then we might sub-license it. To a company in Asia. And then any of those proceeds that the startup gets, a percentage of that would have to be paid to The University. Right.
Now, do you typically see The University relying on kind of the company to do that sub-licensing, or do you ever see The University kind of itself break up those rights? We're going to do one to cardiovascular, we'll do one to immunology, we'll do one in Asia and U.S.
Yeah, so I'm glad you brought that up because that is usually one of the hotly... You know, discuss topics is the field of use. As a Life Sciences Companies, you want to get all fields of use. And the reason being is, you know, what someone else does with the technology in clinical trials can have a serious adverse. Effect on your clinical trial because any bad data It's going to be bad across the board. Yep. So, you know, as the startup, you want to, as much as you can,
control who has those fields. The University, of course, wants the opposite. Right. They want to make sure that. Get the full extent of the value of the asset. So they may try to license it in a specific field, or usually a field, rarely territory, but in a specific field. And then some of the licenses have provisions in there that... Would say if someone came knocking on the university's door and said, hey, that technology, we want that for... Use and, you know. Some other indications.
There are provisions that are sometimes in there that would require the startup to either start developing that indication or sub-license it to that third party. Yeah.
Because again, it's this idea of not wanting to sleep on those rides, making sure that it's used to its fullest extent, making sure that... Yeah, somebody doesn't shelve it. Keep it from living up to its full potential. Right. So any other kind of financial buckets that you think of?
Well, I think we'll probably get into sort of the equity piece.
Do you see annual fees?
Yeah. Yes. So some universities call it annual licensee fees. Some folks call it minimum royalties. But it's an annual minimum that needs to be paid. It usually starts in... In life science context, you know. Three, four, five years down the road. Okay. You know, recognizing that it takes a long time for preclinical work and so forth. So we try to stretch that out as far as we can. Yeah.
Well... I'm interested to hear kind of your thoughts on this because, you know, when we do these spin-out licenses on the tech side, you know, we see a lot of people trying to move the financial pieces around. Like, I don't, you know, this is too much. I don't want to pay that much. This, we're not gonna be able to run a business
with these amounts. And typically what we see is that you can change timing, you can move a lever here, but often cases that results in kind of an additional payment in some other place. The University tends to at least argue that they have... Bucket that they have to fill. So it's either going to be from the minimums, it's going to be from the royalty rates, it's going to be from the upfront payments or milestone payments.
And you can change the timing of those, but you're not really going to change the overall financial picture that much.
Yeah. And for our licenses, what we try to do is push as much to the future as possible. And we'd be willing to pay. You know, a higher phase three, you know, milestone, because at that point we've. Probably got something. And by that point, it's probably in the hands of Big Pharma. And they don't care. So we try to push those down as much as we can. But you're right. I mean, you can negotiate those things. But at The end of the day, the University is going to get its
due. So we've touched around a bit, a little bit. But let's talk about the equity piece or the exit fee.
Yeah, so when I started, it was... It was almost exclusively equity based, right? So. In exchange for The license, as part of the consideration, the University would say get 5% common stock of the company. Then you got into anti-dilution. The University always wanted to be protected to a certain extent from being diluted from that 5%. And so that had always been sort of a negotiation point as to when that sun sets. In other words, at some point after you've raised a certain amount
of money, anti-dilution goes away. Those are discussions that you don't have with an exit fee. And I'll get in that in a second. But the other thing equity brings with it is universities want participation rights. And so they want to be able to participate in future financings, at least to their pro rata share of the shares. And, you know, again, that's something that investors may or may not like. And so another negotiated point, maybe down the road, as I say, you know, we take these licenses
as far as we can get them. Um, knowing that Maybe we have a second bite at the apple later on. Right.
Yeah.
So the exit fee. Is in lieu of equity. And what it says is that The University gets a certain percent. Of the exit. Consideration for the sale of the business. So it's usually a smaller percent, you know, between one and two and a half percent, but it's not equity and it's not dilutable. So. When the company sells they get that right off the top. And, you know, some universities use equity, some use exit fee. Some universities give the startup a choice, whatever they want to do.
From a negotiation standpoint, the exit fee is always simpler to negotiate.
And that may be your answer, but as you advise clients on that, how do you help them think through which is more beneficial for them, the equity or the exit fee?
Yeah, I think from a negotiation standpoint, as I said, it's easier on the exit fee. The other consideration for equity is that the University is a shareholder, and so shareholders have certain rights in the company. Some startups don't like that. They want to be free of The University as much as they can for a myriad of reasons. In the exit fee context, they're not shareholders, and all they're entitled to is the fee at the end of the day.
Do you ever see universities asking for a board seat or any sort of?
Usually observation. Okay. Yeah, usually observation when it comes to equity. So you typically don't see observation rights with an exit fee.
And how common is that, do you think, of observation rights?
It's fairly common, but it also sunsets. It usually sunsets after the first X million dollars of financing.
And is the intent with the sun setting just to... Not be a roadblock for future investment or what?
Yeah, I think so. Yeah. Yeah.
What are some of these other provisions that are going to be addressed at the term sheet stage? I think we touched on it some as far as the scope of the license rights, whether it's exclusive, whether it's field limited, you know, territory. What other kind of... I guess as it relates to the specifically licensed rights, what are some of the other terms that are negotiated there?
Yeah, so how long you're going to pay royalties. You want to make sure that you're not paying royalties forever. So usually it's tied to the patent, although most universities now want to at least get 10 years of royalties out of it.
And will they tie that to the know-how then?
They would tie that to the know-how, and then you get into a step-down royalty. And so those things... Usually are not in the term sheet stage, but get fleshed out in the agreement stage. But a lot of the defined terms, what are the license patents? What is the know-how? University wants to make sure that the know-how is a snapshot and very specific. Whereas the company wants anything that's related to the license patents. And so that's usually fleshed out in the term sheet stage. Right.
And is there something magical? You mentioned 10 years. Is there something magical about that length of time?
It's just become kind of market. Okay. Yeah. I mean, some will stretch it to 12, but 10 or 12 is usually what I see lately.
That's an interesting question. So are you starting to see kind of, I don't want to say uniformity, but more consistency across universities? So if you're negotiating with... You know, somebody local, UNC, Duke, something like that versus Florida versus Carnegie Mellon. Are you seeing similar terms?
Yes and no. Okay. So, you know, UF, for example, has a template that's pretty much their own. I mean, some of the same similar terms and those things. But, you know, other universities will piggyback off forms that probably Autumn circulates. So definitely similar, but each one has their own different nuances to it.
Well, and again, it goes back to that point about involving an attorney. You know, you see hundreds of these licenses, whereas the company is going to see one of these, two of these, maybe at most. Especially when you're working opposite a Tech Transfer Process & Its Origins office, that's what they do day in and day out. They're looking at these licenses. So having somebody else who's kind of... Again, walk this road with somebody else before can be so useful.
Yeah, and to add to that, a university might say, well, these are... You know, These are market terms, right? Right. And, and. I had the benefit of seeing, you know, I think. At Hutchison PLLC, we've negotiated with over 100 universities. And nonprofit institutions. So we have a pretty good idea of what market is. We can sort of keep them honest.
This is your market. It's not consistent with the rest of the market.
Yeah. I always joke that, you know, this autumn that I mentioned before that Um, you know, they all... Collect at this. Convention and someone says, yeah, I got 20% equity out of this startup. And all of a sudden, that's standard. Then all of a sudden, that becomes the goal.
Got to keep them from going to those meetings. So how about kind of other terms? Like, do you see specific milestones? You mentioned some of them related to kind of regulatory stages. Are there other milestones you typically see or specific obligations that the company has to adhere to?
Yeah, so milestones come into play in two different ways. We talked a little bit about the milestone payments, right? So when you meet a certain milestone. You make a payment. The other are development milestones. And those are sort of date-specific targets for achieving certain events. And, you know, I always challenge our, particularly our Professor founders, you know, they sort of want to say, I can get that done.
I can get that done easy by them. I'm like, you know, these should be easily attainable, not stretch goals. You know, you're not, you know, what we try to do with those is put in some sort of savings clause. In other words, you know, especially in this regulated industry. Things can happen. And so we don't want an automatic breach if we don't meet that particular milestone.
Well, I think that's useful because the consequence of not meeting the milestone is university can terminate the license and your business is gone.
Right, after spending millions of dollars. Right.
So I imagine these licenses, you're negotiating this before investors are at the table. Correct. Is that right?
Most of the time.
Okay.
Yeah. I've had license agreements where... The founders have already set, you know, found investors. And so that complicates things. Right. Because they want to be part of the negotiations too. So it. It doesn't happen often, but it does happen.
And you mentioned at this that there's sometimes a chance to kind of get a second bite at the apple. Talk through that a bit, because I imagine that comes in when the investors come into play or you're further down the road. Talk about when. It may be appropriate to talk about or when it might normally happen that you come back and revisit this license.
Yeah, it typically happens when an investor is ready to stroke a really large check. At that point, if the investor doesn't like certain terms, The interests of the University and the startup become more aligned in the sense that if we want this project to go further. Then we're going to have to give a little. Right. And so that's typically, you typically don't see it on seed rounds. You typically see it in. You know, series A and beyond.
And what, in your experience, has been some of like, what are the terms the investor doesn't like or where they're most likely to push back on?
Could be the exit fee, could be the amount of the exit fee. It could be the royalties. It's usually financial terms. Yeah. Usually financial terms. Although, you know, I don't know that I've seen this, but I could see where the development milestones we just talked about, you know, where. Hey, we're going to invest this money. But there's no way we're going to meet that January 2026. Deadline. So let's talk about that.
Even short of kind of an investment, do you see... Do you see The University willing to have a conversation if the financial terms or whatever other term in the license isn't? Really working out. Because at the end of the day, I think there is some alignment where The University
wants to see a successful business. Business wants to see a successful business so do you ever see a situation where come back and be like hey we tried to do it at these levels but we can't make a workable business out of it Or do you really need that strong arm of the investor to come and say?
You really need the strong arm of the investor. And primarily because, you know. Before the investment comes in, you've not really... Done anything that causes the company to have to make payments, right? Other than patent fees. They may have done a proof of concept, a preclinical trial, but they haven't done a clinical trial. And that's where you start needing the money. So I typically see it with investors. Commitment.
And I guess in your experience, have you seen a point where you just couldn't reach terms? The University wasn't willing to have that conversation and be like, no, this is what we negotiated?
I have not. As I say, I think interests are aligned at that point. Right.
Easier to have that conversation when there's money on the table, right? So what do you see as some of the biggest pitfalls in this process for a spin-out company? And what should they be thinking to kind of avoid those pitfalls?
You mean in general or just with relation?
Just in general with spin-out licenses.
I think one of the pitfalls is Founders should know what they're good at and what they're not good at. What they're good at, do. What you're not good at, don't. Outsource. Um, I think one of the other things that... Particularly the professors, they underestimate how difficult it is to raise money. Right. You know, all these things that we're talking about in the life science area cost, you know, millions upon millions of dollars. Develop and so they need to have an understanding that
You know, this is not going to happen. Right away right and they still have to do their day job. So this is on the side to make sure that they... Make a clear delineation of when they're working for The company and when they're working with the University. Because, you know, if to the extent they're on university time and using university resources. That's not company work product. That's university work product. That's a fascinating point.
Talk through that a little bit as you are straddling that line as a Professor. You've still got your responsibilities to The University. You're still trying to build out this business. What are some good practices to keep those things separate?
One is to, you know, if labs are involved, to... Secure labs that are off-site, to find ways to hire, whether employees or consultants, to do the work on their time. And just be very vigilant about record keeping. Okay.
And do you see, is there ever a scenario where like a business will hire The University back to do some of the more other research? Or is there ever kind of a continued relationship in that respect?
There is sometimes. Right. Um, So, um, For example, one of the – spin-outs I'm working with now. The actual clinical trials are being done by the University. Okay. So, you know, they have an arrangement about data and ownership. So you can have a relationship. With The University. It just needs to be really well documented. Right.
Now I want to go back to kind of your first point is about being circumspect about what you're good at, what you're not. Do you see kind of a common path for like how far a Professor can take a business per se versus having to involve? Maybe a business lead versus being able to do it all themselves.
Yeah, you know, it depends on the Professor. You know, some professors are very business savvy. They could take it further than others. I will say that typically, when you get investors involved is sort of the pivot point.
Okay. And is that driven by the investor? The investor wants to have more of a... Yeah.
They want to have more of a business person CEO. That's not just a technical person. That's the inflection point that you typically see. Some professors realize, hey, I'm not a business guy. So they partner. So they bring in a founder who's a business guy. To act as CEO. And that can start from day one. Yeah.
And I was going to say, how common do you think that is to have kind of a business founder along with the scientific founder at the very beginning of the business?
I would say about half and half. Okay. Yeah.
And do you see a lot of repeat players? In this space?
There are repeat, yes. There are definitely repeat players. We always joke that, you know... Folks that have a startup and... Have an exit and think they're going to retire, come back in a few years and say, I can only play so much golf. Right. I need to do something else. And so those folks are very valuable to universities. Sure. Because they're the folks that can partner with. You know, a Professor that has new technology to guide them. So yes, that happens.
Now, this is kind of... Changing gears completely, but I was sitting here thinking, you know, when you were in house at a pharma company, What was your perspective of kind of like a university spin-out coming to you kind of with the developed technology? Did that make a difference kind of as you evaluated the business versus kind of something else?
No, I think it's all about the technology. It's about the technology and the execution on the technology. You know, pharma companies won't touch startups until they have data, a lot of data. And so that's part of the process of a... You know, building a startup to exit is. Got to take it at least through phase two. To get the data that makes it attractive to a pharma company. I mean, there are outliers on that. But it's typically at that stage after phase two or even phase three.
And at what point in time are these companies taking on investment, you know, to kind of get to that point, to get to phase two?
Sometimes the startup can fund bootstrap preclinical trials.
Okay.
But when you're talking... Any clinical trial, they're going to have to most likely get investors. Yeah.
That makes sense. So, you know, Dan, we are the Founder Shares Podcast. And so I like to ask my guests, if you had one piece of advice that you wanted to share with a new founder or someone thinking about starting a company, or in this case, someone thinking about kind of taking on your type of a career path, what kind of advice would you offer?
I would say in terms of, and we touched on it a little bit, but in terms of the founders. You know, engage with counsel as soon as possible. And that doesn't necessarily mean, you know. You know, racking up huge legal bills. I mean, it could be a simple half-hour conversation. But just to sort of get grounded on, you know, especially those who haven't done it before, right, or don't know the process. Get an attorney involved or at least a licensing expert, whether that be,
you know, business development kind of guy. Or girl involved early so that you just, you don't make mistakes from the get-go.
No, that's helpful. How about from the legal side? Any advice for future young Danes out there?
Yeah, so... I personally just kind of fell into this. I was in general practice in Indianapolis. Applied for in-house job at Eli Lilly and Company, which is a large pharmaceutical company and got the job and sort of. You know, fell in love with the life sciences area. But there are opportunities. You know, one of the things someone in a younger me could have done was, you know. Make some inroads to the Tech Transfer Process & Its Origins offices. Right. You know, kind of get to know those folks
and what they do. And let them know you're available for. These touch things. That's great.
So what's the best way for our listeners to get in touch with you, reach out, ask for the questions.
You can email me at D O corn D O K O R N at HutchLaw.com or call me at 919-829-2644. Fantastic.
Thanks so much, Dan.
Thank you.
That was Dan O'Korn. If you'd like to reach out to Dan or learn more about his practice, you can email him at D-O-K-O-R-N at HutchLaw.com. That's D-O-K-O-R-N at HutchLaw.com. Or call him at 919-829-2644. Thanks for listening to this episode of the Founder Shares Podcast. If you're a founder or business owner and need legal advice, be sure to check out our team at HutchLaw.com. That's HutchLaw.com. We have the capacity to help you out with just about any legal need your company
may be facing. We're passionate about the innovation economy and ready to help you on your entrepreneurial journey. The show was edited and produced by Earfluence. I'm Trevor Schmidt, and thanks for listening to the Founder Shares Podcast.