Who Runs University Venture Capital, and Where Does the Talent Come From?

I spent an hour with Thierry Heles recently, alongside my co-founding partner Karoly Szanto, and I asked him something I had been thinking about for a while: Does anyone in this sector actually have a talent strategy?

His answer was careful and honest. Most do not. Not in any deliberate sense.

Thierry has spent 12 years inside university venture capital and tech transfer. He came in accidentally: a former housemate called with a freelance writing job, asked if he wanted to write about spinouts, and he had never heard the word. He took the work. He has not left since. That arc, accidental entry followed by a career-long obsession, turns out to be characteristic of the sector itself.

What the asset class actually looks like

There are approximately 240 university venture capital funds globally. Around 130 are in Europe, using a definition broad enough to include funds attached to a single university, multi-university vehicles, and funds one step removed through incubators backed by universities. New funds are still being raised in continental Europe. The UK is a different story: a capital dearth has left funds announced one or two years ago still searching for anchor investors.

Japan built something distinct. A centralized government decision roughly a decade ago directed universities to establish funds for their spinouts, and capital was made available to get the process started. The result is a university VC infrastructure mature enough that UTokyo IPC now runs a fund, the ASA Fund, originally anchored by the Tokyo Metropolitan Government, that goes out and invests in other university funds. As Thierry Heles described, that creates a flywheel: smaller universities gain access to capital, expertise, and a path to co-investors they could not have reached independently. You do not see that in other geographies yet.

Australia's Uniseed took a different route. Formed just before the dot-com crash, it survived the global financial crisis and spent its first 13 to 14 years without a blockbuster exit. It survived because the capital it deployed into spinouts fed back into university labs, funding PhD researchers and generating commercial relationships that the universities valued independently of financial returns. For Thierry Heles, that story carries a specific lesson: university funds are measured by their institutions against criteria that go beyond capital returns, and understanding that changes what success means for the GP running the fund.

The talent path in

The typical entry point into a TTO is a PhD or post-doc internship. The person has scientific expertise, has often seen commercialization happen in or near their lab, and finds the work interesting enough to stay. Career progression is mostly vertical and mostly internal. The community is collegial because everyone in tech transfer is trying to do the same thing, and no one controls what research comes through the door.

On the fund side, Thierry Heles observes a different pattern. The people who run UVC funds most often bring financial expertise. Duncan Johnstone, who runs Northern Gritstone, the fund backed by Manchester, Sheffield, Leeds, and Liverpool, came from investment banking. Stephan Christgau, who runs Eir Ventures, backed by six Swedish universities, previously ran Novo's corporate venture capital fund. Impec.xpand, affiliated with the Belgian semiconductor research institute, brought both VC experience and semiconductor expertise to the fund from the start.

Karoly pushed on this: Do you see UVC GPs coming in with deep-tech backgrounds, specifically, given that university funds tend to operate on longer time horizons than typical market VCs? Thierry's answer was that sector expertise at the GP level matters most when the fund has a defined focus. Eir Ventures is a life sciences. Impec. xpand is a semiconductor. In those cases, the GP's domain knowledge maps directly onto the portfolio. A fund with a broad mandate, one that might back a quantum spinout one year and a social sciences-derived company the next, needs a GP who can raise and run a fund, then build a team that covers the domains the portfolio requires. Deep expertise in one sector does not help when the pipeline spans ten.

The TTO and the fund require different people with different skill sets. The commercialization expertise needed to run a TTO and the financial expertise needed to run an investment vehicle are complementary. Putting the same person in charge of both creates the conditions for either the investment decisions or the commercialization work to suffer.

What is rarer, and what Thierry Heles argues should happen more, is the career path where a founder builds a spinout, takes it through to exit, and then moves into a university innovation leadership role. Oxford recently appointed someone to a vice chancellor of innovation role who had founded OrganOx in 2008 and taken it to a billion-pound exit. That person has lived every stage: the research, the spinout formation, the fundraising, the exit. The institutional knowledge embedded in that experience is qualitatively different from financial expertise or research administration expertise. Thierry's point was direct: that should be a trend. Currently, it is an exception.

Why openings stay open

Compensation is the constraint Thierry Heles named most clearly.

TTO job postings that stay unfilled for a long time are usually unfilled because the salary does not compete with comparable private-sector roles. A posting requiring seven years of experience at $60,000 is not unusual. Thierry Heles noted that TTO leaders sometimes comment publicly on LinkedIn when they see these postings, calling out the underpayment. The problem is that universities often lack the means to address it, even when they acknowledge it.

In the US, healthcare benefits attached to university employment partially offset salary gaps, particularly for people earlier in their careers. In other geographies, the calculation is less favorable. Once people are in, they tend to stay. When they retire, many continue in some capacity, running training programs or advising. That retention reflects how genuinely interesting the work is. The pipeline in, though, remains constrained by what universities are willing or able to pay at the entry level.

The pipeline math

There is a structural constraint that talent strategy alone cannot resolve.

Even the most productive research universities produce roughly 20 to 30 spinouts a year. MIT and Columbia operate at approximately that scale. Karoly made the point plainly: that is not a pipeline for a $ 500 million fund, and arguably insufficient for a $ 100 million fund once realistic conversion rates from spinout to fundable company are applied. Not every spinout is investable.

The funds that have scaled have expanded their mandate. Engine Ventures, which came out of MIT, grew early to include spinouts from Harvard and then from Rice University and institutions along the East Coast. That pipeline supported follow-on fundraising. Funds that define themselves narrowly around one university's output will face a pipeline constraint as they grow.

Multi-university funds address this, but they introduce governance complexity. Karoly named the conflict-of-interest problem directly: if one university holds a controlling interest in a shared fund, priorities can collide. Deals involving the controlling university's spinouts may receive preferential consideration, whether intentionally or not. Both Thierry and Karoly converged on legal separation as the structural answer. The fund should sit outside the university, with an external management team and its own governance. The University of Notre Dame ran an internal fund, found that the back-office requirements exceeded what they had anticipated, and moved to an external manager. Notre Dame did not repeat the internal model. They partnered with an external firm to manage the next fund.

The LP problem

European pension funds allocate approximately 0.008% of assets under management to venture capital. In the US, the figure is closer to 2%. Karoly raised this gap directly, framing it as a structural question. His hypothesis: European capital markets are fragmented in a way that American markets are not. Pension funds in France, Germany, and the UK tend to invest domestically. Cross-border investment remains administratively difficult inside what is nominally a single European market. Thierry put it plainly: they talk about the single market, but it does not exist for venture capital.

Thierry's candidate explanation for the US difference is historical depth. Silicon Valley has been around for 60 to 70 years. The asset class has been present long enough to become a normal allocation for institutional investors. Whether that fully explains the gap, neither of them was certain. Karoly noted that the EIF has been nudging large European LPs toward co-investment alongside public capital. The movement has been slow.

Uniseed in Australia found a practical lever. It initially waived management fees for pension fund investors. Pension funds got portfolio access and the option to invest further into strong performers later. Peter Devine, who ran Uniseed for approximately 20 years, has argued that European governments covering management fees could produce a similar effect. Moving from 0.01% to 0.1% of pension fund assets under management would represent a tenfold increase in available capital for the asset class. The political appetite for that intervention, in Europe at this moment, is another matter.

Corporations are a more tractable LP category today. Family offices, motivated by a mix of financial and purpose-driven considerations, are active. Local governments can function as anchors, as the Tokyo Metropolitan Government demonstrated with the ASA Fund. Thierry's assessment of pension funds was direct: they may not be where the energy should go first.

Karoly raised one more gap. The LPs already investing in university venture capital are not well-connected among themselves. Their motivations vary: some are place-based, some are purely financial, and some are drawn to the research commercialization mission. A GP-LP event structured specifically around university venture capital, creating space for those conversations, does not exist at scale. The people who could learn most from each other are largely not in the same room.

What I took from the conversation

Thierry Heles has been tracking this sector for 12 years. Karoly and I are building in the middle of it. The patterns Thierry Heles documents are not unique to any one geography or fund structure. They repeat because the underlying conditions repeat: universities that underpay for talent, funds that outgrow single-university pipelines, LPs that invest locally in a market that needs them to invest across borders.

Japan demonstrated what deliberate coordination can produce: a government mandate and a decade of patient capital built an infrastructure that now funds other university funds. Uniseed redefined what a return looks like for a university investor. The question for Europe is whether that kind of coordination will come from the top down, or whether the funds, TTOs, and LPs building from the inside will get there first.

Timecode:

00:00 Welcome and setup

01:04 Origin of the podcast

02:31 Entering university VC

05:24 What makes it fascinating

07:48 Talent and career paths

11:12 Who leads university funds

15:49 Geography and mobility

17:38 Europe fund landscape

21:14 Global count and Japan

24:22 Cross-border ecosystems

28:47 Late-stage funding gap

29:52 Funding Scale Reality

30:15 Investor Geography Bias

31:36 Multi-University Fund Models

33:11 Building a Pipeline

34:25 Audience and Coverage

36:38 Policy Voices on Air

38:03 LPs and Investability

40:40 Pension Funds Risk Gap

41:37 Europe vs US Allocation

44:35 Incentives and Fee Support

46:25 Talent Paths and Pay

51:57 Fund Turnarounds Lessons

54:13 External Management Best Practice

55:34 No One Size Fits All

Links:

Thijmen Meijer LinkedIn: https://www.linkedin.com/in/thmnmr/?skipRedirect=true

Thijmen Meijer Personal Website: https://www.thijmenmeijer.com/

UniVCC: https://univccoalition.org/

Guest:

Thierry Heles: linkedin.com/in/thierryheles/?skipRedirect=true

Business: https://thenextleap.is/

Transcript:

[00:00:00] Károly Szántó: I wanna welcome Thierry Heles on our show. Hi, Thierry. Thanks for joining us today. 

[00:00:11] Thierry Heles: Thank you both for, for having me. It's a pleasure to, to be here and do this in person. 

[00:00:16] Károly Szántó: Thanks. I'm here with my co-founding partner, Thijmen Meijer, and today we are having a discussion about your journey and The Next Leap podcast.

And we are curious to hear about what you have learned over your work, working with university fund managers. But before that, this is kind of a funny situation interviewing the interviewer, right? Because the first time we met actually was you made an interview with me. Now we exchange or swap...

How do you say swap- Turn the tables ... switch. Yeah. Swap seats. Yes. So how did you end up doing your podcast? Where are you coming from, and what made you do this? 

[00:01:18] Thierry Heles: That is-- I will try and keep the answer short. I think I've always been interested in podcasts as a medium for like the last 20 years.

I've done various podcasts over the years. I previously did a podcast for my former employer that was also kind of going out and interviewing people in this field, tech transfer officers, fund managers, those kinds of things. And just over a year and a half ago now, I decided to leave that job and kind of strike out and go on my own.

Found The Next Leap, kind of build a media company that I thought I wanted to lead and shape it how I wanted to shape it. And the podcast was kind of a natural way of both promoting myself and still maintaining those discussions, conversations with people in the field, like yourself.

Having interviewed you last year. And it's just-- it's a really good medium, I think, to connect with people and give them the space to tell their stories because they can let their personality shine through, for example, rather than a written article, which is more heavily edited than a podcast conversation.

Sure. 

[00:02:32] Károly Szántó: And why-- And how did you end up in the university venture capital segment or the innovation segment, let's say? 

[00:02:41] Thierry Heles: I ended up in it relatively randomly in that about 13 years ago I was just a freelance copywriter. And my old housemate from university reached out to me one day and was like, "We're looking for freelance journalists to write about spin-outs."

And I was like, "I've never heard of a spin-out." "What is that?" But I had capacity at the time, and I joined, and I was pretty much hooked from the get-go. 

Mm-hmm. 

And I focused on more the kind of the spin-out angle, so spin-outs raising money, spin-outs achieving exits for several years before I kind of became interested in university funds more specifically, and that's possibly also because that's how the sector kind of evolved.

So you had Oxford Science Enterprises kind of being launched in 2015, 2016-ish. And then since then there's been a real explosion of university funds. And then in 2022, '23 thereabouts, I decided that I would sit down and kind of start researching these funds and figure out which universities actually have one, maybe what geographies are more advanced in this.

At the time I found some relatively interesting findings in that in Europe if you use a list of... I think I used the QS ranking of top universities. It was about 40% of the top universities in Europe had access to a fund. That wasn't always necessarily their own fund. It was sometimes a fund that was shared between multiple universities.

In Australia it was almost all of them that had access to a fund. Wow. In Asia it was varied. Japan very advanced. Other nations in Asia maybe not so much. And in the US it was about a third of the R1 institutions that had a fund, which was surprising to me because Europe was sort of slightly leading there compared to the US.

Interesting. But then you could argue that in the US maybe they didn't necessarily... Stanford doesn't need their own fund because they're literally down Sand Hill Road. They got Sequoia and everyone else next door. They don't need to raise their own fund. Correct.

depending on where you are, most cities don't have mature venture capital ecosystems. So they kind of had to go and do it on their own. And in Australia to a certain extent as well, no one really flies down to Perth to look at spin-outs down there. 

Hmm. 

Yeah. 

If we, if we circle back, what does it really, what, what hooked you on to this, this, uh, this sector?

What was it? I think what hooked me into the tech transfer spin-out aspect was- It, I would say it's sort of like you start seeing this almost invisible layer in society. Like, I went to a few universities, as a lot of people have, or have gone to at least one. No one ever mentioned a spinout to me, no tech transfer.

think what hooked me in- into the- ... the tech transfer spin-out aspect was- It, I, I would say it's sort of like you start seeing this almost invisible layer in society. Like, I went to univer- I went to a few universities, as a lot of people have, or have gone to at least one. No one ever mentioned a spinout to me, no tech transfer.

And okay, I didn't do STEM. I did English and then... But then I went to a business school, and again at the business school, no one ever mentioned tech transfer, which I kind of thought was maybe like an obvious kind of way. If you study business, maybe that's a person that they would maybe want to have in a tech transfer office in some capacity.

And then, yeah, when I kind of learned about this world, you kind of start seeing, oh yeah, like if an invention is made in a university it does get out. And I kind of always thought it gets out, but I never really questioned how that happens. I'm like, oh, someone finds a cure for this disease, and then obviously that will become a therapy or a drug.

But how, I never really questioned. Um, and then when you start scratching the surface, you find really common things like Gatorade, for example, started at the University of Florida, and it's called Gatorade because it was a drink made for their sports team, which is called the Gators. So like lemonade, they called it Gatorade.

And you kind of start seeing these things just sort of everywhere, and you're like, "Wow, okay," like, and no one knows this is happening. But not everything, but a lot of things go back to university research. And then I was like, well, how does that bit actually work? How do they actually do that?

It's a fascination that hasn't stopped as I've talked to so many people that work in this, and it's kind of a once you're in people tend not to leave. Sort of a lifelong obsession, or at least a 14-year obsession for me by now. That's long enough 

[00:07:43] Károly Szántó: to- Yeah ... to confidently- Yeah

call it an obsession. Yeah. Yeah. Yeah. What I, what I really like, uh, in your work is that, uh, you are, you're somehow combining, um, um, like very sector-specific news, uh, following some of the key stakeholders, uh, maybe, um, joining to a new firm or heading up an innovation office. So it's not only about the firms, but the people as well, uh, so the network.

And during this conversation, of course, considering that Thijmen is coming from talent acquisition and recruitment, we also want to better understand the talent pool that the UVC sector is working with. 'Cause it has its own characteristics as any industry. And from my perspective, I'm really curious to learn more about your findings in terms of how new university funds are established, and do you see any patterns either geographically or stage-wise or from any angle?

Um, so maybe we can, we can start, uh, or continue with the, the, the talent 

[00:09:11] Thierry Heles: Part. Sure. Yeah. Absolutely. I was wondering actually if you see any trends, because you're in the business already for quite a while, if there is any trends that are like very surprising to you because you keep track of quite some movements within the UVC and tech transfer worlds.

Any trends that are very surprising to you? 

I don't know if there are necessarily trends that have surprised me. Often what you see, especially in tech transfer offices, is kind of PhDs, post-docs maybe do an internship with a tech transfer office, and then they just kind of work their way up the chain.

Um, very classic career, I guess, um, i- in a lot of niches. Um, occasionally I think you do get these, these really interesting stories that I think should be more of a trend. So Oxford recently, their, um... I can never remember if it's vice provost, vice president of innovation, one of those, vice chancellor of innovation.

But the person who got the job now created a spin-out in 2008, I think it was, OrganOx, took it all the way to a billion-pound exit last year I think it was. And now they've moved him from being a professor to being a head in charge of innovation. I think that should be happening at a lot more institutions to the people that have kind of gone through the whole process, kind of have it seen from this is the research, this is the spin-out, this is the exit.

I understand- Yeah ... everything. I understand what it takes to raise money. I understand how to shepherd a technology all the way to, to an acquisition or an IPO, as it may be. Um, but often it's, it's not those people that, that, that get those jobs. Do you see mostly from 

outside of the UVC or the tech transfer office in, like, a typical market VC?

I mean, if you specifically look at UVCs, often it is the people that bring the venture capital expertise, the people that- Maybe investment banking expertise. So if I remember this right, Duncan Johnson who runs Northern Gridstone, the Manchester, Sheffield, Leeds, Liverpool University Fund, he came from investment banking.

So it is people that have the, the finance expertise. Um, occasionally you get examples of people who've run a TTO and then have gone out and gone into VC. So you've got, um, John Flavin, for example, who created the Polsky Center, which is the tech transfer office at the University of Chicago, um, then left and set up Portal Innovations, which is now...

It, it's raised a few funds but it's, uh, has gone on to the, the VC side. Um, I- his name escapes me now, but I know that the University of, of Utah who ran the TTO there then went out. Keith Marmor, that's his name. Mm-hmm. Um, left and, and went into venture capital. Um, but often it is, it is the, the people who are already bringing some kind of venture capital expertise that are put in charge of, of those funds, either because the university sets up the fund and that's the people that they're looking for, um, or people who are in VC and become interested in this area and then either set up a fund with a university or, or look for a job, um, in that area.

But I think that's probably right. You probably don't want someone who knows how to commercialize to be the person that does the investments, because I would argue that they are slightly different skill sets. They're complementary and those people should work together. But the person who runs a fund should not be the person that runs a TTO, generally speaking.

But the person actually, the GP that's start or the head of innovation at a VC, usually comes already with a deep tech background or somebody with... Because the university VCs are more long-term. It's a slightly different curveball than a typical market VC.

Um, do you see any difference here or any...? 

I mean, you certainly do get those people that bring that deep expertise. You have, for example, Stefan Chriscar who runs Eye Ventures, which is backed by six Swedish universities, and then they have a sort of a sidecar vehicle with University of Copenhagen called UCPH Ventures, and he previously ran Novo's corporate venture capital fund.

So he brings that. And they've, they're, they're now focused on life sciences, so he brings that deep expertise of, of the sector, and he's got that pharma experience as well. Um, same with, with IMEC Xpand, for example, which is attached to IMEC in, the semiconductor research institute in, in Belgium. Um, that team kind of brought venture capital experience and, and semiconductor experience with them.

It really depends what your aim is for the fund. So if you have a fund like IO Ventures that's focused on life sciences, then you want the life sciences people. But if you set up a university venture fund that you just hope invests in your spin-outs, then it might not necessarily help you that someone has maybe run a quantum or done quantum investments before because they might get a social sciences person standing in front of them because that's

that's the research that's come out. So I don't... You probably want a relatively comprehensive team, like you want the expertise on that team. You need people that are able to do the due diligence on those technologies. But I don't know if the GP having the deep expertise in one sector is necessarily what's needed.

You just want someone who knows how to raise a fund, run a fund. The financial background is really what counts in that position. And then someone who knows how to build a team that can pick up the expertise that you might lack. 

And do you see any international moves or is it rather geographically bound to the- 

I can't think of one.

I would assume that within Europe it probably happens. I don't know if it really happens. If you're in the US you might not really... You kind of stick to the US. If you're in Australia, probably gonna stick to Australia. Although I know that Australia and New Zealand, they like to send people to the UK and do sort of a year overseas to kind of- 

gain expertise. Which is kind of true in, not specifically in VC, but I think is part of their... You go overseas and you kind of see how things are done somewhere else. I mean, I know Károly, you... I think that happens with some people. They kind of go abroad and gain 

their expertise- Yeah ... somewhere else.

Um- I think that's pretty, 

[00:16:43] Károly Szántó: um... Well, not, maybe not very common but, but it's, um, it's a good way to, um, yeah, to, to take home some best practices- Yeah ... for sure and align with the, with the wider ecosystem. 

[00:16:59] Thijmen Meijer: Yeah. 

[00:16:59] Thierry Heles: And I know that's... I've spoken to a few people in, in Ireland, for example, that have gone to the US and they, they got their corporate VG- VP jobs- Mm-hmm

and then they've come back with all that experience and they've learned how to build startups and get products into the marketplace. And then apply that from a TTO or from a UVC point. But I can't think of an example now where someone may have run a fund in- I don't know, in New York and then decided to go and run a fund in Germany.

Mm. Not saying that that doesn't exist- Yeah ... but I, yeah. 

[00:17:38] Károly Szántó: So can you, uh, give us an overview about the, the market in Europe and then rest of the world? Like how many funds are there? What are the typical sizes? Uh, do, do you actually see, um, um, new funds, uh, being established or is it more like a stagnant number?

[00:17:59] Thierry Heles: I've mostly been, been focusing my, my research on, on European funds, um, in the more recent months. There's over 100. I think there's about 108, 109 that I've identified so far, and I'm taking a relatively broad definition. So it's funds that are kind of actually attached to like one university, that one university set up, like Oxford Science Enterprises.

Mm-hmm. Um, I am also counting funds like Comma Fund in Germany, which some might argue that are not university funds. Um, or things like a Leap Ventures which is attached to an incubator that's backed by the university, so it's- Yeah ... one step removed. Um, and yeah, there's still, there's still new ones being, being launched, um, certainly in, in, in continental Europe.

Um, in the UK there's a bit of a funding dearth at the moment. They're, they're, they're kind of struggling to raise new funds. Even funds that were announced one or two years ago have kind of struggled to- Mm ... find anchor investors. Mm-hmm. Um, which geopolitical realities, financial realities of, of the UK at the moment.

Um, but no, so like the Elite Ventures that I mentioned, that, that was launched last year. Um, there was Delphinus Venture capital that was launched in, in Denmark. Um, PSV which is attached to, um, to UDenmark, they raised another fund not that long ago. Um, so, so yeah, new funds are, are, are still being raised.

Size-wise it really varies. You get the relatively single digit small funds to the behemoths like the Oxford Science Enterprises which is a billion. And then quite literally everything in between. 10 million, 50 million, 100 million. It's a reflection of the local ecosystems, I would say.

The pipelines that they have access to. The LPs that they have access to. Often if the EIF comes in as an anchor investor, that's often a big chunk of cash which some funds want the EIF, some... Maybe some fund managers don't wanna have to deal with a public institutional investor.

So there's those choices to be made as well. Some funds prefer being backed by corporations because then that means they get access to that expertise. Like Oxford's, they're backed by GV, Tencent, kind of big corporate style, can bring the technical expertise and then also provide follow-on funding and can co-invest in the 

in portfolio. Um- 

[00:20:54] Károly Szántó: How many funds in your definition... So you say in Europe there are currently somewhere around 108 or so?

Yeah, yeah. 

Um, how about US or the rest of the world?

Um, how many of those are, are currently there? 

[00:21:24] Thierry Heles: Around the world I would probably put the number at about 250-ish. Again, it kind of depends on how you define it. Like in the US you could possibly argue that Osage University Partners is also very much in the uni VC field because they focus on university 

startups and spin-outs. That's, that's their whole premise. But then they are an entirely independent venture capital firm that just has partnerships and access to- Mm ... TTO pipelines. Um, but yeah, I would say around the world about 250, which most of them kind of concentrated in, in Europe and then the US, um, and then to some degree in, in Japan, which is sort of a shining light in, in Asia because they are-- They have a, a, a almost strangely mature university VC ecosystem.

Um- Yeah, I was gonna 

[00:22:23] Károly Szántó: ask, uh, how did, how did Japan, um, you know, become, um, you know, so active in this segment? 

[00:22:31] Thierry Heles: So they decided about 10, 12 years ago that universities should have funds to invest in their startups through there. There was a centralized government decision. And then there was capital available to kind of get the whole thing going.

Um, and that's really worked almost phenomenally well, um, to the point where now you have, um, you-- Well, University of Tokyo has two. Um, they have University of Tokyo Innovation Platform, and they have University of Tokyo Edge Capital Partners, which is more of like an external venture capital firm- Mm

backed by the university. But UTokyo IPC, they run a fund called the ASA Fund, which was originated by the Tokyo Metropolitan Government and backed by the local government. That now goes out and invests in other university funds. So they've kind of as well as investing in their own spin-outs, they've become kind of a catalyst for other university funds.

Which is not really something you see in other geographies. Maybe others will catch up. But that's then enabled maybe smaller universities to raise funds, and then at the same time also kind of get that expertise in from a much more mature, bigger fund that really knows how to 

how to build ecosystems. Um, and then you, through that, get access to co-investors. Like it's, that's that flywheel that everyone always talks about. Like you kind of- 

[00:24:21] Károly Szántó: Yeah. Yeah. And where, where do you see, like, um, connections between ecosystems is another, um, interesting part of, uh, of this sector. Some-- And of course, the, it also relates to, uh, the definition of an ecosystem.

So, uh, looking at it from here, UK is one ecosystem, but it's not. We all know that. So there is, uh, there is the Oxford-Cambridge, uh- Yeah ... area or, uh, what is it called?

The Golden triangle. The Golden Triangle. Yeah, Oxford, Cambridge, and London. Yeah.

And then on the north, uh, The Corridor. 

[00:25:02] Thijmen Meijer: Yeah. 

[00:25:03] Károly Szántó: Yeah. 

[00:25:03] Thijmen Meijer: Uh, 

[00:25:03] Károly Szántó: so those are large ecosystems, but they are-- Like you can say the UK has the most advanced, uh, ecosystem in the university venture capital sector in Europe, probably, if, if you define, um, from that perspective. Yeah. But then the UK ecosystem is connected to, uh, traditionally very strongly to the US and, as you mentioned, to Australia and New Zealand. Um, and now we talked about Japan. Uh, not that they need to be connected to, I don't know, Europe. Uh, but I think they have a fun time with their initiatives. But is there any connection between these ecosystems?

Do you see any... Or is it more, um, happening on, um, uh, say, um, opportunistic basis? It just happens, but it's not organized. 

[00:26:05] Thierry Heles: I think it was, it was University of Tokyo Edge Capital Partners. Um, but they've invested in, in the UK as well. Oh. In, in, um, I think it was at least a quantum startup. But th- from their point of view then, well, there's a technology that we're interested in, we're gonna go and invest over there 'cause that's a startup that's doing great things, um, to then bring that expertise back to Japan because it's a sector that, well, everyone wants to be...

Well, everyone used to be wanting to lead in quantum- Mm-hmm ... now it's leading in AI. But but quantum's not gone away. Um, so, so those kind of very broad international investments happen. There's, um, Theodorus, which is a Belgian university fund. Um, they set up an office in, in Montreal in, in Canada. Um, now they're spinning that fund off into a separate venture capital firm.

Um- Mm ... so you do get those kind of cross-border investments. You do also get, um, the more kind of regional multi-university funds. So VIVES funds is a, is a good example set in, um, located in Belgium. Um, but they've also got a partnership with the University of Luxembourg where- ... um, we are now... Well, we're not at the university, but in, in, in Luxembourg, and they've got partnerships in, in the Netherlands.

Mm-hmm. So they've kind of expanded sort of across the, the Benelux, which culturally quite close and geographically, um, all kind of close as well. Um, but they're still, I would say, it's still the exception. I'm not saying these funds don't talk to each other, because they probably do talk to each other, but it, it's still, it's still very, very rare to see them kind of expand beyond their own.

And that's partly, I think, because often when you have kind of a, a classic university fund, uh, uh, like using the narrow definition of this was set up by one university- 

Yeah ... 

often the university then goes, "Well, we're creating a fund for our spin-outs." Why go out and- "Why, why are you going to Zurich to find a pipeline?"

Yeah. Um, I think that will change. I think as the ecosystem matures- Mm-hmm ... it will change, and then especially with, with the bigger funds, um, where you, you know, you might have raised 100, 200 million. You might have that pipeline that's been built up because there hasn't been funding, but can you sustain that pipeline or do you then need to go and look at opportunities elsewhere?

Do you need partnerships with other universities? Um- 

[00:28:48] Károly Szántó: And have you seen any, uh, late stage, uh, university investor funds? Because I think... So we just had, um, a nice discussion, uh, with and about, uh, EIF's, uh, new, uh, initiatives, uh, like the ETCE 2.0 Um, and also there are many other initiatives on the deep tech, uh, late-stage investments.

There is clearly a, a funding gap. But, uh, have you seen any university funds that are investing late stage? Because that would be quite unique. Maybe Oxford has one. Yeah. 

[00:29:31] Thierry Heles: Oxford maybe invests more in the later stages now, now that they've got 10 years of having built a, a, a portfolio. Um, I think often it's, it's a question of capital- Yeah

capacity. Um, especially if you're talking deep tech where the funding requirement's just exponential. Um, you might get away with a few million early on, but then you very quickly reach 50, 100 million - Easily ... dollar requirements or euro requirements. Um, which obviously that's not one investor putting in that money.

You need, you need a consortium of investors. Mm-hmm. Um, but I think that's significantly harder for a university to- Mm ... to pull off. Yeah. Um, and I think often the problem that universities have is that they have great startups, great spin-outs, and they don't get anywhere because the investors are in the Golden Triangle.

And even you have in, in the UK, you have, you have this, um, group of six universities called Z Squared, which is sort of the southwest corridor. So from like Cardiff, Bristol, Bath, Exeter, Southampton, uh, Surrey. Was that six? Did I forget one? Mm-hmm. No. Um, but even they have to run their investor day in, in London.

Like, they have to take their spin-outs there because- Hmm ... even with six universities, the investors are like, "Well, if you're not coming to us, then..." Right. Hmm. And that's, that's, I mean, that's, that's true kind of everywhere. Like- Hmm ... I know in, in the US, um, the University of, um, Colorado Boulder, they run a, an investor day with kind of other local institutions where they bring their best- Mm-hmm

10, 12 startups, and then they bring the investors in because the investors don't wanna go to Boulder to look at two spin-outs. Yeah. Um, because, you know, why are you not coming to Silicon Valley? That's where we are. We're not getting on a plane. Yeah. Broadly speaking, I'm sure there's investors- Yeah ... out there that, that do.

Yeah. Um... So that, 

[00:31:36] Károly Szántó: yeah. Uh, I mean, I see, um, kind of the same bottleneck, uh, in the UEC sector, meaning, um, there, there needs to be, um, a massive deal flow available for a fund. And usually one university is not capable of, uh- Mm-hmm ... generating such a deal flow. Um, and I think it wouldn't be even fair to- Uh, expect, uh, all universities to be able to, you know, spin out like tens of, I don't know, in 50s- Mm-hmm

uh, every year. Yeah. So naturally, I would expect more UVC funds to be covering multiple, uh, universities. Yeah. Um, but that's a different, um... That requires a different, uh, approach and different, uh, uh, tools to get there to launch such a fund. 

[00:32:40] Thijmen Meijer: Yeah. 

[00:32:41] Károly Szántó: Uh, not that it's easier or more difficult, I don't know, but, um, it's just very different.

Yeah. Because, uh, none of the universities can hold ownership or, or all of them need to. Uh, otherwise there is the bias problem. Like, uh- Yeah ... uh, if one university controls the fund more, then there is always of conflict of interest and priorities- Yeah ... can collide, so that's an interesting one. But- 

[00:33:12] Thierry Heles: You almost need that vision kind of from the, from the get-go, even if you set up the fund as...

So, like Engine Ventures, for example, which came out of MIT. Even there you kind of need to go, "Okay, we're setting up this fund. It will be..." I think it was called The Engine at the time, now like an incubator attached to it as well. We'll put money in, and then it very quickly also expanded to kind of Harvard University.

Um, and it started backing spin-outs out of Rice University and that kind of, that corridor kind of down past the, the East Coast. Mm-hmm. You know, they've, they've been raising-- They, they've raised follow-on funds because that created a pipeline. Um, but it, it was because MIT didn't go, "We're setting up our fund.

Our fund will invest in our spin-outs." Mm-hmm. You said 50 spin-outs. Even MIT, Columbia, they- Yeah ... produce, you know, 20 to 30 spin-outs a year. Yeah. That's not a pipeline for a $500 million fund. Definitely not. Not- 

[00:34:07] Károly Szántó: You're not... Yeah ... not, not even for a 100 million fund- Yeah ... because out of those, out, out of that 20, not- You're not gonna invest in all of them anyway There's not- Yeah

a 100% conversion rate, uh, from spin-off to fundable. Yeah. Yeah, so definitely. How do you define the relevance of, uh, what you are doing, uh, for your audience? 

[00:34:31] Thierry Heles: So I would say my, my audience is, is people within innovation ecosystems, so that is, that is the TTOs, that is the investors. Um, that's also the legal experts because they are also part of it.

Someone needs to write the contracts. Yeah. Um, someone needs to do the due diligence, someone needs to make sure that patents are filed and all those things. Someone needs to negotiate licensing agreements. Um- So yeah, kind of people who, who work in innovation sy- ecosystems in, in, in the broadest sense. Um, and within that, uh, my coverage mostly focuses on what's happening in tech transfer offices and what's happening in university funds.

Um, currently primarily news articles, so new funds being raised, people moving around the industry. Um, the podcast then interviewing, um, people who run funds, people who run TTOs, lawyers, um, hopefully in future also successful spin-out founders because I think that's also an interesting story and not one that gets told that much.

Like how did you take this company from an idea in your lab to an IPO or an acquisition? Mm-hmm. Um, or maybe not. Might maybe it failed. That's also interesting. You know, why, why did it collapse? Mm. And I want it to be a resource for people who work in this field so they can come to it as they're hopefully learning something new, finding out how maybe things are done at other funds or at other tech transfer offices- Mm

um, through the podcast and, and in future also through kind of more in-depth feature articles, case studies, um, which I've got lined up and maybe they'll be out by the time that this podcast goes out there. Ooh. Hmm. Um, that depends on the timing. Um, but yeah, more in-depth kind of- Hmm ... articles as well as the, the timely news articles.

Um, but yeah, you mentioned people earlier. I think it's the, the people that make this industry, and that's partly why I track where, who's going where- Mm-hmm ... because that's interesting, you know? 

[00:36:38] Thijmen Meijer: Absolutely. And are you also planning to bring in policymakers? 

[00:36:42] Thierry Heles: Yes. Um-

[00:36:43] Thijmen Meijer: Or people working in and around this?

[00:36:45] Thierry Heles: Yeah, I would be very interested in having policymakers on as well. Often I found, especially with people who actively work in government, unless they are the politician, which I don't know if I want a politician on the podcast, often they're not quite at liberty to talk freely because

[00:37:08] Thijmen Meijer: Yeah

[00:37:09] Thierry Heles: they're often civil servants, and they have, especially in the UK, they got quite strict rules about they can't be seen as the voice of the government. So yeah, it depends whether I will convince myself that having a politician on the show is a good idea. I don't know if I would necessarily look forward to having to ask the same question 15 times and getting evasive answers.

But no, I would be very interested in people who work in the policy area in this. I know there's people that sometimes maybe sit more on the outside trying to influence policy through think tanks or through consultancies, but maybe not the government people themselves.

If someone- sends me an email and goes, "I wanna be on this," I might not say no. But- Mm. I don't think they would be my first target to, um, to reach out to. 

[00:38:03] Károly Szántó: Like, what makes, uh, an asset class, uh, underwriteable, investable from, from an LP perspective? And, and also there are, you know, there are many types of LPs, so- Yeah

it might be, it might differ from an investment bank, from a, a pension fund, and, and so on. Um, but by, you know, by becoming a bit more visible f- uh, for the LPs, um, it will actually also, it, it would help, uh, a great deal the ecosystem. More clarity, better understanding, uh, and the incentive is already there.

Yeah. I think it, it, the impact that I would expect is alignment, better alignment- Yeah ... with LP expectations, so, um, but that requires, um, some more visibility from the LP side, some more communication probably. Um, and I totally respect that, um, many LPs are not interested in this, uh, asset class. Um, all good, but then the ones that are already investing, I think they could also learn from each other.

I don't know how connected some of these LPs are, but I bet, uh, not all of them are connected. Yeah. Um, by the way, that's why we want to, uh, um, organize a GPLP, uh, event only for university venture capital funds because that layer is kind of missing to- Mm ... to have, um, a 100% relevant space. And, and I think it could be, uh, you know, it's a media channel or an event or both.

Uh, these things, uh, strengthen each other. Mm-hmm. 

[00:39:56] Thierry Heles: Yeah, I think that would be, that would be a really good place for these people to come and, and tell their stories. Um, and yeah, why, why they have invested. And I, yeah, I think you're right. A lot of them will have very different reasons- Yeah ... why they've backed it.

Sometimes it might be place-based. You wanna support your local ecosystem. Sometimes it will be purely financial. I know in the UK they've been trying to convince pension funds to invest more in venture capital. Hasn't really worked. They've changed the rules, and it hasn't really happened, partly because they aren't forcing pension funds to do it.

So pension funds are like, "Well, I'm not being forced to put money into university venture funds." Pension funds are probably out of all the LPs the most conservative. I don't want them to gamble with my 

[00:40:50] Károly Szántó: pension. As, as they should be. That's just- Yeah, 

[00:40:52] Thierry Heles: yeah.

They, they need to be conservative ... that's just respect They wanna invest in something where they go, "This will return X percent over the next 25 years." Whereas if you invest in a venture capital fund, there is a risk that the money will disappear. Hopefully it won't. Hopefully you will get the outsized return.

But it is that 1 in 10. Sure. And if you, if you don't hit that 1 in 10, then the fund maybe just returns the cash to the investor. Maybe the investor loses out on some money, and yeah, that's not what pension funds want to do. Yeah. It's too much. Um- Too much risk It's too much risk ... 

[00:41:35] Károly Szántó: for them. Yeah. But, but then how, how would you explain the, the incredible difference in ratio of, uh, capital allocated by pension funds to, um, to venture capital funds between Europe and US?

The, the, the percentage of assets under management by, um, pension funds in Europe, I don't remember the exact number, but 0.- It's very, very low ... 0.008. Whereas in, um, in the US it's like, I don't know, 2%. 

[00:42:16] Thijmen Meijer: Yeah. 

[00:42:17] Károly Szántó: It's a huge difference. So I don't think they are, uh, more risk-taking. There must be something else to it.

I don't know. 

[00:42:26] Thierry Heles: That's a tough question, and I haven't, I haven't spoken to US pension funds. Mm. Um, it might be cultural. It might be because venture capital as an asset class is significantly... Well, maybe that, that's not right. It's not more mature in the US because it's also mature in Europe, but it's been around for significantly longer.

60, 70-ish years Silicon Valley has been around. And obviously it started very small. It's a really hard question why in the US they might- 

[00:43:06] Károly Szántó: kind of a rhetoric question also. Yeah. And I don't, I don't think anybody knows the exact, uh, answer to that. But, um, drawing from that, if we knew the answer, uh, would be, um, yeah, would maybe help, uh, for the Euro- European ecosystem.

I'm pretty sure- Yeah ... some of, for example, EIF is, uh, nudging, uh, the, the big LPs in Europe- Yeah ... to co-invest along with, uh, with EIF. Um- But it's not really happening, 

[00:43:43] Thierry Heles: Is it not because in the US there is a more structured capital market? I mean, there's just one, right? And here in Europe it's a bit more fragmented on the capital markets side.

[00:43:56] Károly Szántó: That could be one- Mm-hmm ... yeah, because i- in Europe, exactly like, like you also said, Thierry, that, uh, many of the LPs invest locally, like in, in, uh, like in France or in the UK or in Germany. That's what I mean locally. Um, and that's all good, and that's where Europe is a fragmented market, uh, is a disadvantage- Yeah

from that perspective. It is still 

[00:44:24] Thierry Heles: incredibly hard to invest cross-border. It is. 

[00:44:28] Károly Szántó: It, uh, uh, 

[00:44:29] Thierry Heles: They talk about the single market, but it doesn't exist for venture capital. I mean, the pension funds, I know in Australia, Uniseed was sort of a really big venture capital fund that's been around for 25 years.

Um, they convinced pension funds to invest by, I think, initially waiving fees, so the pension fund didn't have to pay fees. Um, so they got the pension fund investment, and the pension fund then got access to a portfolio where they could then funnel more investment into the- Mm-hmm ... the good startups, um, later on.

And I had Peter Devine on my podcast a while ago who ran Uniseed for about 20 years. And his argument was, if you wanna have pension funds invest in Europe, maybe that's where the government should step in, go, "We'll cover the management fees." Because then that could be several million on top of what the pension funds put in.

Um, that could be the lever that you wanna, that you wanna pull. You go, "Well, you'll save 5 million if you invest however much." Um, and that can still be maybe instead of 0.01%, it could be 0.1%. That would already be- Yeah ... tenfold, um, increase. Would already be making a difference. Mm-hmm. Um, but then what government in Europe at the moment wants to...

None. None. Yeah. Yeah. Um, it's... Yeah. I, I think pension funds are probably the, the toughest nut to crack. That might not be who you wanna go after. 

[00:46:13] Károly Szántó: Definitely they are the toughest, uh, one. You might 

[00:46:16] Thierry Heles: You might wanna go after the corporations, maybe institutional investors, maybe local governments.

Yeah. 

It's a very typical, uh, like career ladder or, or horizontal moves, basically. 

Yeah. I don't think there's anything- Too weird going on. No. Um, you, the, you see the, as I said, maybe the, the, the sideways moves from people coming in with industry experience, um, or people who maybe have run a TTO then moving into the investment side- Mm-hmm

um, or maybe moving into a spinout themselves, becoming spinout CEO or CTO. Mm. Um, that's probably the, the weirdest you see. Um, and then as I mentioned, occasionally you get someone like the person at Oxford who's done the spinout and now is, is in charge of innovation. I don't think I've ever seen someone who maybe was a banker who then suddenly got put in charge of a TTO.

Yeah. Like, the, their, the skill sets are too- Yeah. 

Indeed ... too different.

[00:47:18] Thijmen Meijer: Yeah. So o- out of the box candidates would not survive here, would not work. 

[00:47:23] Thierry Heles: You want a certain skill set to run a fund or to run a TTO. That might be the industry expertise. That might be maybe you have the legal expertise.

Maybe you, you were a patent lawyer. Um, I know for example at the, um, University of Alaska Fairbanks, the guy who runs the, um, the TTO was, came through it from a, from a legal background. Um, but again, it does kind of relevant to then what you're doing, and then you build a team around you that has the other skills, that maybe has the science- Yeah

expertise. 

[00:48:00] Thijmen Meijer: Mm-hmm. But do you know any, um, any TTOs or, or UVCs that have any kind of talent strategy w- internally or any- 

[00:48:08] Thierry Heles: Often I think they do it through internships. So they have sometimes more or less structured internship programs. Sometimes they have master's students.

Often it's kind of PhDs or, or post-docs. Partly I think it's interesting for the students because if you do a PhD or a post-doc these days, the odds are you will not become a professor. Academia is- Yeah ... yeah, th- there's limited career opportunities, um, just because universities are underfunded pretty much everywhere and- Mm-hmm

yeah. So, so funneling them in to a tech transfer office is often quite an interesting way of using the expertise that the university has taught them for their PhD, for their post-doc. Mm-hmm. Um, and then they often, especially if they are post-docs in, in labs that maybe have already commercialized something, they've kind of seen the process, um, whether they were actively involved in it or whether it was others.

[00:49:14] Thijmen Meijer: And do you see any short- shortage of talent, like, throughout the, these 240, uh, funds as you mentioned? Job openings that have been open for X amount of time? 

[00:49:25] Thierry Heles: Yeah. If they are open for a long amount of time, it's often because- especially if it's TTOs, it's because they're not paying as much as maybe you would get if you were in business development in a corporate.

Mm. And then often you get perks that maybe people earlier in their career enjoy, like you might get to travel a lot. Whereas if you work in a university tech transfer department, your travel is probably if they have a satellite campus Yeah ... that, that's then maybe you, you go to, like, a few relevant conferences, um, and the pay is just not...

So if it's the money that you care about and if you are earlier in your career, you might because you might wanna build a nest egg, you might wanna have a family, you might not wanna have just finished your postdoc and then be on a $50,000 salary somewhere. But then it also depends.

In the US, you know, if you work for a university, you often get healthcare benefits- Mm-hmm ... that outweigh significantly what you might get somewhere else. Um, so yeah, that's the, the, the job openings that are there often just... I- it's often because they are, they're very low paid. Mm. Um, but then I often also see people that run tech transfer offices kind of commenting on, on job posts on, on LinkedIn going, "You're underpaying your staff."

Mm. But it is a university and you can't- Yeah. 

[00:50:55] Károly Szántó: They also don't have the means to- They don't have the, the 

[00:50:57] Thierry Heles: means. But yeah, if you put out a job ad and you say, "I want someone with seven years experience, I'm paying $60,000," good luck with that. I think once you're in it, a lot of people just don't leave, and a lot of people when they retire, they still sort of stick around and 

they might run training courses and, and those kinds of things. Like, uh, people tend to wanna- Mm-hmm ... stick around and, and give back. Um, also because that is, it is a community. Like, universities sort of compete with each other, but if you're in tech transfer, it's a very collegial community- Mm ... because you're all trying to do the same thing- Mm

um, and you don't really control what kind of technologies come through the door. Like, that's-- You have no impact on, on the research that's being done, um- Yeah ... short of contracted research that you might be- Yeah ... negotiating, um, the contracts for. 

And do you have any success story that, that one specific individual turned a fund, uh, you know, uh, from a bad performer to a g- a proper performer?

Let's look at uniseed in, in, uh, in Australia. For the first 13, 14, 15 years, they didn't really have a blockbuster exit. Like, they just... They also-- They got formed just before the dot com crash. Mm. And then they had to make it through the global financial crisis. Like, they d- they had a really bad first decade of just having to deal with things that were not their doing- Mm

um, just the economic climate. Um, but i- initially, a lot of the, the funding that went to, to the startups, the startups then worked with the university labs, so they paid researchers, they paid PhD... They had PhDs. So the universities got a return on their investment outside the millions and millions in, in capital returns.

Um, so it was an underperforming fund in, in capital terms for a long time, but the university still benefited because what they put back, what they put into the spin-outs, it fed back into their labs. Um, it helped their researchers. It, it led to commercial relationships. So it was still, for the universities, enough of a success, um, which I think is, is, is why it was allowed, allowed to keep going- Mm

because universities benefited. But it's really hard to kind of get funds to admit that they failed. I think that's true in venture capital in general. You don't really go out and go, "Oh, yeah, my return is .3X." No one would put that on LinkedIn 

or publicly admit it. You hear the blockbusters. Um, or if the fund maybe didn't go well, then it just sort of- Disappears ... quietly- Yeah ... disappears and, and you never hear anything again. Um, and they just, they don't raise another fund. Yeah. I mean, what's interesting is y- you do have the, the universities that have tried to run internal funds.

Um, so uni- the University of Notre Dame, for example, in, in the US, they had an internal fund. Very quickly, as you would realize, that you need a lot of back office capacity to do that. Um, and then they didn't do that again. They, they partnered with an external firm- Mm ... to, to manage the fund. Um, which I guess you could turn...

They didn't turn around the first fund, but they kind of learned their lesson that maybe the model that they used initially wasn't a failure, but it just wasn't suited to, to university. Fair enough. Yeah. Um, and I think that's, that's the lesson for every university. Don't, don't, don't have a fund that's entirely internal.

Have, have an external management team- Mm ... that knows that they, what they're doing. Yeah. And that sits slightly removed from the TTO. Maybe, you know, you can share an office with them. Um, but legally, I would argue that the university fund should be separate from- Mm. Yeah ... from the university. I agree. Um, yeah.

If you disagree, you know, send me a message. I would like to hear from 

[00:55:30] Károly Szántó: you, 

[00:55:31] Thierry Heles: but, 

[00:55:31] Károly Szántó: um- Exactly. 

[00:55:32] Thierry Heles: Yeah. Um... 

[00:55:34] Károly Szántó: No, I mean, there are many different situations, different ecosystems, different-- even different university setups- Mm-hmm ... like, uh, in terms of ownership or, uh, KPIs of a certain university, like you said. And by the way, some of the investors, uh, on the market also I've seen working like that, like I invest, but then I will also provide some services for which you will-- you are going to pay.

I mean, if the value is there and, and if it's not obligatory, uh, so by choice, uh, every startup or spin-off has to purchase, uh, services from the market in any case. So selling lab services, it's, uh, it's, uh, it's a more obvious thing than, uh- Yeah ... you know, other. So it, it makes sense. But all I'm saying is that there are many different forms, forms of, uh, structure between university and, um, and its investment vehicle.

Yeah. So, um, it's hard to, hard to come up with a one-size-fits-all solution and probably- 

[00:56:51] Thierry Heles: I don't think you should ... we, we, we shouldn't. Yeah. Yeah. 

[00:56:53] Károly Szántó: Yeah, exactly.