Key Life Sciences Stakeholders Launch Representative Term Sheet
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Novel collaboration by all-star team of university technology transfer experts, venture capitalists, and law firms gives life sciences start-ups a jump start
Collaboration will benefit life sciences entrepreneurs aiming to launch start-ups based on their discoveries and innovations
Streamlining the path to life sciences deals will also lead to overall improvement in healthcare options for patients
Since the spring of 2020, a group of academic institutions, investors, and law firms—listed below—have been working together to create a “representative” term sheet that an investor and an academic institution might use to begin discussions around launching a life science start-up. The objective was to create a reasonable approach, with terms and clauses that most parties could use in most situations. The philosophical underpinnings can be found here: “Term Sheet Recommendations for Launching University Life Science Startups” and “Recommended Process Improvements for Launching University Life Science Startups,” initially released in December 2020.
Since then, the creators have incorporated those principles into a term sheet template (available in both PDF and Word versions) with full clauses, which can be downloaded and used freely by any parties that wish to do so. The hope is to significantly reduce the amount of time spent negotiating these deals across the early-stage life sciences industry, which could result in therapeutics, diagnostics, and medical devices reaching the market months or years earlier, with corresponding benefits to patients worldwide.
One important note: The creators use “representative” to describe the term sheet because the great majority of the terms would be considered reasonable by parties on both sides. As a result, in many situations, the term sheet could be used without significant further edits. However, it should be noted that any given institution or investor may have certain preferred approaches or policies about which they may feel strongly. For instance, some institutions have particularly strong feelings around sublicensing income, reservation of rights, or access to future improvements—and some investors have equally strong feelings about equity, success fees, or board observer seats. Realistically, it would have been impossible to create a single document that incorporated all possible variations. Accordingly, some of the contributing entities and other parties may need to use alternative approaches to those in the term sheet template, even if they have approved the general approach promoted here, so nothing in these documents should be seen as binding any of the creator organizations. Rather, the term sheet should be viewed as a reasonable approach overall for most situations.
Over the next few months, the creators hope to release a full license agreement template based on this term sheet. For any questions, comments, or concerns, or if you would like to have your institution added to the list of endorsers below, please email techtransferVCstartups@gmail.com.
The creators of the term sheet include the following (individual contacts noted in parentheses):
Academic institutions: Columbia (Orin Herskowitz, Ofra Weinberger, Melissa Cohen), Duke (Robin Rasor), Harvard (Isaac Kohlberg), Johns Hopkins (Steve Kousouris), MIT (Lauren Foster), Stanford (Karin Immergluck), Indiana University (Teri Willey), University of Michigan (Rick Brandon), University of Kentucky (Ian McClure), University of Pennsylvania (John Swartley), and Yale (Jon Soderstrom)
Venture capital firms: 5AM Ventures (Galya Blachman, Jessica Alfano and Deb Palestrant), Atlas (Kevin Bitterman), Omega Funds (Deirdre Cunnane), OUP (Kirsten Leute and Bill Harrington), Polaris (Amy Schulman and Alexandra Cantley), RA Capital (Sarah Reed, Nadim Shohdy and Josh Resnick), and Venrock (Cami Samuels)
Law firms: Cooley (Geoff Spolyar), Goodwin (Sarah Solomon), and Wilson Sonsini (Kathy Ku)
The term sheet has been reviewed and is endorsed by the technology licensing offices of California Institute of Technology (Caltech), Columbia, Cornell University, Duke, Harvard, Indiana University, Johns Hopkins, MIT, New York University, Stanford, University of Michigan, University of Kentucky, University of Pennsylvania, and Yale, as well as venture capital firms 5AM Ventures, A16z, Atlas, F-Prime, Omega Funds, OUP, Polaris, RA Capital, Sofinnova Investments, and Third Rock Ventures.