Wisconsin Alumni Research Foundation

As part of our continued efforts to support entrepreneurship at the University of Wisconsin-Madison, the Wisconsin Alumni Research Foundation (WARF) is excited to offer the Startup Advantage Program, a streamlined process to support the transfer of intellectual property from the University of Wisconsin-Madison to startups prepared to commercialize the technology. By offering startup-friendly terms to entities formed specifically to develop the technology being licensed, the program, which is optional for UW entrepreneurs, is designed to aid in the creation of viable companies and better prepare them to de-risk WARF’s early-stage technologies, license our related IP, and bring UW-Madison’s innovations to the market.

 Key Features & Benefits

WARF’s Startup Advantage Program includes support for UW-Madison’s innovators who could benefit from early guidance in creating their company before moving forward on their own. While working with WARF’s team to further develop ideas for their business, the startup receives an option to exclusively license the technology – this means that while the startup prepares their development and commercialization plan during the option period, WARF reserves the technology for the startup and will not license out the IP to any other party.

The Startup Advantage Program provides transparency by offering standardized, favorable deal terms to all UW startups that participate. The license terms have been developed and vetted by seasoned entrepreneurs, venture capitalists, and legal professionals with extensive experience launching UW startups; their goal is providing terms that are attractive to founders, investors and commercialization partners. In addition, once a WARF licensee, startups also have access to potential equity funding through our WARF Ventures group, which manages a venture fund dedicated to investing in startups commercializing UW-Madison technologies.

 Eligibility

Any new startup created for the commercialization of WARF IP* is eligible to participate in the program provided that at least one UW inventor is named on the patent or patent application(s) and serves as a founder of the company whose technology will be licensed.

*This program applies to technologies that are solely owned by WARF and does not apply to pharmaceuticals, biologics, or other human therapeutics.

 Startup License Process

The program involves a two-step process to facilitate the licensing of technology to new startups. Our goal is to help startup teams develop into a company with the scientific and business knowledge needed to commercialize the technology.

Step 1: Option Period
Startups receive an exclusive option to license the technology while they develop a mutually agreed-upon development and commercialization plan and outline initial diligence milestones.  This step is intended to result in an action plan for execution by the startup to position it as a more viable candidate for successful commercialization as an exclusive licensee of the technology.

Step 2: Exclusive License
With an acceptable development and commercialization plan, the startup may exercise the option and obtain an exclusive license under the WARF Startup License Program terms.

Competitive licensing terms available to UW Startups include the following:

  • No up-front licensing fee
  • Deferment of certain pre-license patent expense reimbursement
      • While intellectual property protection is essential for high-tech startups, it often comes at a significant price. To allow startups to direct more of their early funding toward building momentum, our license provides for deferment of certain patent legal and other necessary related expenses incurred before the effective date of the license.
      • See terms below for additional details.
  • Preferable royalty rate that is lower than industry standards
  • No annual minimum royalty payments for years 1-3
  • No milestone payments

WARF Startup Advantage License Term Sheet – Non-Negotiable
Non-binding

 Licensed Patents
  • List of patents to be licensed
 Grant
  • Exclusive license to the Licensed Patents
  • Option to Improvements of the Licensed Patents (definition in the license agreement)
 Sublicensing
  • Licensee may grant written, exclusive or non-exclusive, sublicenses to third parties.
 Field of Use
  • To be defined by Licensee
 Licensed Territory
  • Worldwide
 Equity
  • 5% equity with $2M of anti-dilution protection
  • Licensees who elected to receive derisking funding from WARF Accelerator or other campus support programs in exchange for future equity (SAFEs) will have additional equity requirements as outlined in their funding award letters
 Royalties
  • 2% royalty on the Selling Price of Products and Services sold by Licensee or a Sublicensee
 Annual Minimum Royalty
  • $25,000 for years 4, 5, and 6 of the license; $50,000 starting in year 7 and each year thereafter. Any royalties or sublicensing revenue paid in a given year will count towards such fees in that year.
 Patent Reimbursement
  • All patent expenses, except Future International expenses, deferred for 3 years and then reimbursed as follows:
    • 33% in year 4
    • 33% in year 5
    • Remaining expenses in year 6
  • Starting in year 7, ongoing U.S. expenses will be paid as they are incurred by WARF
  • Future International expenses will be reimbursed as incurred by WARF
 Sublicensing Fees
  • 20% of non-royalty fees received by Licensee
 Date of First Commercial Sale
  • Sell $100,000 of Products by 20XX (Date TBD, not earlier than 4 years after the execution of the license)
 Development Obligations
  • Licensee will provide a Development & Commercialization Plan with the execution of the license and annual reports providing updates on such activities
  • Licensee will obtain $1,000,000 of equity funding within 2 years of the license
 Preemptive Rights
  • WARF or its designee shall have the right to purchase securities issued in the first priced round of financing to maintain our equity position

WARF