FAQ - Spinning out of ETH
Below we cover some of the points we most frequently discuss with prospective spin-off founders. Is something unclear, or is your question not answered? Simply reach out to us!
A spin-off from ETH is a company that is acknowledged as commercializing a technology or knowledge developed at ETH. This can be for example software, a patented technology or therapy, or simply proficiencies that you as a founder would not have been able to get elsewhere but ETH - either through your work, your research, or your studies.
The accreditation is done by the Vice Presidency of Knowledge Transfer and Corporate Relations, upon recommendation from ETH transfer and ETH Entrepreneurship. Not all companies founded by ETH alumni/alumnae are spin-offs: this is a label one has to apply to get.
Mostly newly founded companies, spin-off or not, will not make much money in the first years – especially not if they are developing an advanced, resource-heavy product. We want to help you through this phase by making sure that you have as easy and cost-efficient access to the necessary infrastructure as possible; be it offices, lab spaces, workshops, computational resources, or simply internet access. We are able to offer you these facilities to subsidized rent for the first two years after incorporation, either directly on the campuses or in external startup locations such as Technopark. We can also help you arrange to have your company domicile at ETH, if necessary.
But we also know that you sometimes need a bit more time to develop your business before being ready to incorporate. This is why we have established the Pioneer Fellowship; a personal grant of 150’000 CHF awarded biannually to promising entrepreneurs who aim to commercialize research results from their ETH MSc/PhD thesis. All details, deadlines and instructions for the application can be found on the Pioneer Fellowship webpage.
Apart from being able to support the spin-offs with infrastructure and other resources, we are emphasizing the value of the community in your growth journey. To-date more than 500 companies have been recognized as ETH spin-offs, and to ensure that the huge amount of experience held by its members are reaching across maturity stages, industries, and teams, we are maintaining this network both online and eye-to-eye. In addition to our online founder community platform, we regularly host virtual and in-person events to bring the spin-off founders together to exchange and create.
And then of course – the label. As an accredited spin-off, you would be entitled to display your affiliation with ETH with the official spin-off logo, and to market yourself as an ETH spin-off. This is perceived as a great “sign of quality”, both locally and internationally.
It is important to know that applying for the spin-off accreditation is free of charge and voluntary – but there are eligibility criteria. The full details can be found in the Spin-off Guidelines (RSETHZ 440.5), but in broad terms they include the following:
- You should be commercializing a technology or know-how developed at ETH
- At least one of the founders should have a strong connection to ETH (for example be an ETH student, employee, alumnus/alumna...)
- You as founders should have entrepreneurial flair and aspirations
- The business case should be sound and sustainable, and have an impact on the Swiss economy.
It is up to us at ETH Entrepreneurship to make a preliminary assessment your eligibility based on the documentation you supply us with. Exactly what information we ask for differs slightly depending on your unique situation, but in every case we ask for a business plan and a pitch deck, (intended) incorporation date, details on how the technology relates to ETH, as well as information about the team. We may also need to contact the professor under whose authority the research you intend to commercialize was performed, to understand their view on its commercial viability and its relation to the ongoing research at ETH.
We want you to be able to focus your time on building your business, and therefore it is very simple to apply for the spin-off accreditation. If you are considering doing so, you should set up an introductory call with a person at ETH Entrepreneurship. This gives us a chance to get to know each other, your business, and our function. We will also discuss what kind of information we would need from you to assess your eligibility and to proceed with the accreditation process.
When we at ETH Entrepreneurship have talked to you (and with your professor, if applicable), we will refer you to ETH transfer to fill in an application form. In this we ask for information about the founders and the technology, and relevant supporting documents. Exactly what you need to send in and to whom is listed in the the application form, but it includes e.g. the business plan and potential related publications.
Once ETH transfer has received your application, they will evaluate your application with input from us at ETH Entrepreneurship.
Exactly how involved your (former) professor is in your company is up to you to discuss. Generally, ETH Entrepreneurship recommends that professors take a non-active role, for example as scientific advisor – but you need to decide what is best for your company.
Professors are allowed to hold shares in companies, but then as private individuals and not in the capacity of their role at ETH. The exact percentage is up to you to negotiate, but to ensure a fairer treatment of the founders the Executive Board of ETH is strict in applying a cap of 20% for a single professor, and 30% in the case of multiple professors becoming shareholders in the same company. Exemptions may be granted – but only under very exceptional circumstances. A professor holding a Board Seat (in particular in relations to shareholding) is also possible, but this must be approved by the ETH Executive Board before incorporation for reasons of transparency around potential conflicts of interest.
ETH Entrepreneurship will guide you through either process above. Regardless of your overall composition, we recommend the operational team to hold the majority of the company shares at incorporation.
The short answer to this question is “it depends”. If you want to commercialize a (protected) technology that you have developed while at ETH as an employee, it is likely that you will need a license from ETH to commercialise it, as the technology then is considered institutional property. In this case, you first need to submit an invention or software disclosure to our colleagues in the Intellectual Property Group, who are also managing the license agreements. If the technology was developed while you were a student, you generally do not need a license. Note that PhD-students with regards to licenses count as employees since they have an employment agreement with ETH.
The safest way to understand what applies to you is to check out the Download Exploitation Guidelines (RSETHZ 440.4) (PDF, 267 KB), and to navigate the websites concerning intellectual property at ETH. And by the way – whether you have a license does not affect your eligibility to become an accredited spin-off!
Find your contact for all questions regarding spin-off licensing.
Not by default. There are mainly two instances in which ETH may negotiate to acquire shares or Phantom Stocks in your company:
- There is strategic value and interest for ETH as an institution, or
- As a means for reimbursing expenses related to for example patent filing and management, or costs related to license agreements.
In both instances, the details are subject to fair negotiations between you as founders and ETH transfer.
Founded company, no older than three years, Spin-off or Start-up label from ETH Zurich, liability contract signed with an insurer.
Please contact Pascal Reichmuth pascal.reichmuth@sl.ethz.ch for questions and to start the process.
Spin-offs from ETH Zurich during the first three years after incorporation. Please contact Pascal Reichmuth pascal.reichmuth@sl.ethz.ch for questions and to start the process.
Come talk to us! Our office door is open and we are always available virtually; you can find our respective contact details here.
For more information on evaluation criteria, the role of founders and professors, procedures and other formalities, we also advice you to read through the full Spin-off Guidelines (RSETHZ 440.5).