Loans & Finances Today

Leaving aside the question of whether spinouts are the optimum way in which to commercialise research (compared with licencing, for example), it appears that more analysis need to be undertaken to determine why spinouts are not as successful as they could be, particularly in realising profit for their investors through successful exits. Furthermore, there could be closer consideration by universities of the following questions:

Should there be a more rigorous approach to establishing exit planning strategies when spinouts prepare their business plans at start-up? Should there be more extensive training of academics intending to commercialise their research in business management and practice, the raising of finance, investor relations, IP protection, marketing and exit planning?

How can the quality of management and staff in university technology transfer offices be improved? Also, perhaps those UK universities with a less than successful history with spinouts and those coming into the spinout business for the first time could follow more closely the approach of Oxford and Cambridge Universities, as well as the template established by the successful American academic institutions.

The most common farm scenario is this: Your grandparent or parents grew up on a farm. You live in the city and enjoy it. You have inherited the farm, either alone or jointly with your brothers and sisters. The farm has not produced a profit in years. The rent for the farmhouse just covers the expenses.

The lease on the land is tied to profits from the crops or trees. Most years, there are no profits. Measuring your return against what you could have gotten in stocks, bonds, or commercial real estate would show how poorly you have done. But you do not measure your return against any benchmark. This is all fine as long as you remain in denial. As long as sentimental attachment works for you, stay with it. Once it breaks down, you will realize that investing in farms, livestock, and crops is rank speculation.

Farmland, ranch land, livestock, and live crops have not kept pace with inflation since the Industrial Revolution. Periods of shortage and high prices are quickly followed by excess and prices below cost. With a few exceptions, only government support keeps farms and ranches viable at all. Small, self-sufficient farms — Amish communities, for example — are thriving in a modest way. For most farms and ranches, though, prospects are bleak.