Many successful life science companies have their roots in academia. Deeptech and life science spinouts emerging from European universities have a combined value of $398 billion, playing an increasingly significant role in shaping biopharma ecosystem. To bring these spin outs and innovation to life, often universities work with venture capitalists (VCs). While both seek to bridge the gap between academic research and commercial application, at times, they struggle to collaborate effectively due to fundamental differences in their goals and timelines.
“Sometimes, academia and VCs are not aligned on what needs to be done to ensure the technology goes from the academic vision to the market,” said Michael Bakria, director of Licensing and Tech Transfer at La Sorbonne University in Paris.
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Differing goals stall innovation
That’s where tech transfer steps in. According to Jared Yarnall-Schane, alliance officer at the Office of Technology Transfer at Penn State University in Pennsylvania, there is an unfilled gap when supporting licensing deals, and tech transfer is key to getting the initial licensing deal signed and filing for intellectual property protections for scientists at universities and research institutes.
“If we can uplift them and bring them the support they need, that will ultimately be a benefit to us and strengthen the ecosystem. Ultimately, we are all looking for the big success stories,” said Yarnall-Schane.
He added that while VCs want to see what is emerging out of university labs, they’re looking for the “right team and technologies that can serve billion-dollar markets.”
“The reality is at this early stage, the teams are just forming, and it’s unclear what markets emerging technologies might have, and frankly, that’s not what the researchers are here for. So, I think there is a little bit of a disconnect in end goals there, but it can be overcome and you just have to build the pathways to do so.”
The mismatch in goals has been echoed by venture capitals investing in the life sciences. Anna Bellmunt, senior associate at Asabys Partners, a healthcare investment firm in Barcelona, explained that academia projects and venture capitals operate under different timelines and constraints.
“Bureaucratic processes around company creation can further slow progress and dilute momentum – an area that needs improvement if Europe aims to remain globally competitive,” said Bellmunt.
This points to a structural disconnect between the entities. Academia operates at the discovery stage, Bellmunt pointed out, focused on generating new knowledge and high-impact publications, while VCs have traditionally concentrated on more mature opportunities with validated assets and defined development paths.
“This creates a natural gap between scientific excellence and investment readiness,” she said.
University and VC relations: a work in progress?
Still, Bellmunt believes that the relationship between universities, research institutes, hospitals, and VCs, have improved over the past decade, at least in Europe. Matthieu Coutet, partner at Sofinnova Biovelocita Strategy – VC Sofinnova Partners’ biotech accelerator – thinks so too, and it’s largely thanks to the evolving role of tech transfer.
“There is a new generation of researchers within these universities that are more aware about what drug development is and how the interactions with pharma and biotech are. Most of these researchers know that to move from the bench to the bedside, they need to go through the private sector, either through pharma or via the biotech industry,” said Coutet.
Nowadays, researchers seem keener on creating biotechs in parallel with what they do in the lab. Coutet also believes that, as a result, the mindset of researchers at universities or public research organizations are shifting as people from within the industry join the tech transfer teams. He pointed out that, for instance, in France, the “professionalization” of tech transfer, as they become more aware about how to deal with pharma or biotech, has come to maturity after about 20 years.
“The best scientists hedge everything, they qualify their findings, wait for more data, which is what you want in a lab. But in early-stage biotech, you have to make calls before the data is clean, design a killer experiment, design a proof of concept before you have the funding to run it, and sell a vision that is not fully baked yet. It is how companies get built.”
However, Venkat Reddy, chief scientific officer (CSO) at General Inception, a venture capital investment firm based in California, thinks the system is “still pretty broken.”
Universities and VCs are measuring completely different things,” said Reddy. “Academia rewards rigor and publication whereas venture rewards conviction and speed. Those two cultures don’t naturally mix, and the infrastructure tech transfer office (TTO) that was supposed to bridge them, was never really built for that job. TTOs were set up to protect IP, not to create companies. That’s a meaningful distinction, and you feel it every time you try to move fast.”
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Another challenge, according to Reddy, is that scientific training actively works against good company-building instincts.
“The best scientists hedge everything, they qualify their findings, wait for more data, which is what you want in a lab. But in early-stage biotech, you have to make calls before the data is clean, design a killer experiment, design a proof of concept before you have the funding to run it, and sell a vision that is not fully baked yet,” he said. “It is how companies get built.”
Reddy agrees that things are shifting, albeit slowly.
“The universities that are figuring it out are the ones keeping scientific founders genuinely in the driver’s seat rather than handing IP to a commercial team and wishing them luck. That approach builds better companies. But it’s still very much institution dependent and there is a real gap between the best and worst TTOs, and a lot of good science gets stuck in the middle,” said Reddy.
Tackling cultural differences, means talking about them. For Bellmunt, early and continuous interaction with universities is crucial. The consistent exchange of perspectives builds trust over time. Yarnall-Schane agrees that creating reliable relations is important.
“They (VCs) really want to build trusting relationships with some key contacts, so that when something of interest emerges, they know that they’ll get a ping to say ‘hey, you should check this out at this point in time.’ So, to me a big one is building trust and then also making things visible. I think that’s one thing that I have learned is helping to elevate the entire portfolio and making it easily accessible for people to find, view, and sort through, and track things is also important,” said Yarnall-Schane.
Funding concerns for universities; how are VCs coming to the rescue?
Meanwhile, funding remains a worry for universities. Biopharma funding plummeted by 20% last year, a major blow after a post-pandemic recovery, according to a report by IQVIA. Initial public offerings hit rock bottom in 2025 over the past 10 years.
To snap out of funding blues, Coutet’s Biovelocita as well as MD Start, Sofinnova Partners’ medtech company builder, capitalizes companies during the activation period, which is the time taken for the potential startup to transform from a university research project into an independent commercial firm. The funds invest between €4 million to €5 million to power early-stage development and hit clinical milestones.
“For a scientist to wait two, three years before publishing anything, It’s very hard to hear because they have already waited two or three years, because they worked with the TTO that already said to them, “don’t worry, we will do this study, and after we will file the patent application, and as soon as we file the patent, you will be able to publish and with the VCs that will want to postpone.” It can be a difficult thing to understand.”
But striking the balance between funding and management is critical. To get the management, you have to get the funding and to get the funding, you have to get the management, Coutet explained.
“It’s a bit of a chicken and egg situation. It’s also difficult to then recruit a seasoned team for very early stage-companies,” said Coutet.
At Sofinnova, partners at the two funds take over the management of the newly founded companies during the acceleration period. Like Coutet, who was until recently the chief executive officer (CEO) of one of Sofinnova Partners’ portfolio companies Signadori Bio, which is developing in vivo immunotherapies for cancer.
Coutet said: “We are covering the two main issues of company creation in Europe: management and cash. Because I think for sure, what we have in Europe, is good science.”
But Reddy’s approach is slightly different. He considers that VCs have a duty beyond just creating companies.
“If a VC approaches a lab just to extract IP, it’s purely transactional, but if we show up to co-found the business with the scientist, everything changes,” he said. “The scientific founder stays dialed in while the VCs bring the check book and the operators. The university gets equity in a properly funded, venture-backed startup instead of just fighting for a modest upfront fee. When the company wins, everyone makes out better.”
He added that getting in early is huge, as early as prior to patent filing. But this takes a lot of trust, and VCs can only earn it by doing the heavy lifting, not just swooping in when the deal looks de-risked.
“And honestly, we desperately need more standardized, venture-friendly term sheets. Some of the smart institutions have already created template IP agreements that cut negotiations down from months to weeks. That kind of plumbing fix is exactly what we need to get ideas out of the lab and into the clinic faster,” said Reddy.
Nurturing relationships early on
Moreover, Bellmunt is also of the view that investors need to be engaged in the early stages. Doing away with the misconception that projects need to be “fully ready” would reap quicker results.
TTOs can help avoid such misunderstandings from taking place. Like Sofinnova Partners and other VCs, Parisian startup studio Argobio managed to do this with the launch of La Sorbonne University spin out Elkedonia, an antidepressants developer founded last year. Bakria, who was part of the tech transfer team involved in the creation of Elkedonia, pointed out that scientists still need reassurance that their work is in good hands. And while many scientists are rushed to publish data to protect IP, especially as they are evaluated by the university about the quality and the number of publications, the process can get delayed a year or more when venture capitals are involved.
“For a scientist to wait two, three years before publishing anything, It’s very hard to hear because they have already waited two or three years, because they worked with the TTO that already said to them, “don’t worry, we will do this study, and after we will file the patent application, and as soon as we file the patent, you will be able to publish and with the VCs that will want to postpone.” It can be a difficult thing to understand,” said Bakria.
But one thing that universities and VCs can agree on is that there is no shortage of innovation.
“Honestly, there is no question that our universities are able to provide good technologies and good science that we can translate into biotech companies and then into potential products,” said Coutet.
What’s missing, he added, is enough money to give these technologies commercial opportunities. But with better communication and a game plan, things are more likely to move forward.
“I think that the relationship with universities is honestly going much better than it was 15 years ago. The professionalism of tech transfer is definitely strong and in favor of company creation. I think we have all the ingredients to be able to create strong companies from these universities.”
