From Science to Seed – Deep Tech Spinout Guide for New Zealand Researchers

A founder-first guide for PhDs, researchers, and scientists who want to turn academic research into a venture-fundable startup, and navigate the challenging but rewarding shift toward becoming a startup founder with a venture fundable deep tech startup.

You’ve made a scientific breakthrough — now what? For many New Zealand researchers, the path from lab bench to venture-backed startup is murky at best. This guide brings clarity to that journey. It’s built specifically for academics and deep tech inventors navigating the complex world of IP licensing, Pre Seed funding, university negotiations, and VC expectations.

Angus Blair

General Partner / Outset Ventures

As a specialist deep tech VC, my job and obsession is backing scientists and engineers the moment their research demands a company rather than a conference paper. Over the last five years I’ve helped build a portfolio from future food, advanced materials, aerospace, med-tech to fusion. Deploying $100k–$2m first cheques and following on through scale-up. This playbook distils the lessons (and battle-scars) of those deals into a pragmatic roadmap for spinning out breakthrough science in Aotearoa.

If you’re a researcher wrestling with IP clauses, term-sheets, or whether to be CEO, you’re exactly who I wrote this for. Dive in, and when you’re ready to talk capital, drop me a line.

Focus: Seed-stage investments in defensible science & engineering—think plasma physics, synthetic biology, next-gen energy, and beyond.

Track record: 25+ deep-tech investments, including New Zealand’s first funded fusion experiment and the world’s smallest MRI.

Why this guide exists: University inventors kept asking the same questions; this is the answer once, share many.

Connect: LinkedIn | outset.ventures

1. What Deep Tech VCs Actually Want

Deep tech venture capital is fundamentally different from software investing. While software VCs can take market risks and iterate quickly, deep tech VCs need a more disciplined approach due to the longer development cycles and higher capital requirements.

The Economics That Drive Everything

This means deep tech VCs need each investment to have credible potential to return the fund.

It's not enough to build a good business – you need to build a business that could theoretically return an entire fund on its own.

Fund size matters: A $20M fund can get excited about a $100M exit. A $200M fund needs billion-dollar outcomes. Understanding your VC's fund size and return requirements is crucial for alignment.

The Core Trade-off

Because deep tech carries inherent technical risk – will the science actually work? Can you build what you're proposing? – most deep tech VCs compensate by minimising other types of risk:

• Market risk: We prefer obviously large markets over markets we need to convince ourselves about
• Team risk: We need technical founders with deep domain expertise, not just entrepreneurial ambition
• Capital risk: We want to see a clear path to follow-on funding and eventual exit

What This Means for Founders

Deep tech VCs are looking for the intersection of:

• Breakthrough technology that creates genuine competitive moats
• Massive market opportunities with clear paths to billion-dollar outcomes
• Technical founders who can navigate both the science and the business
• Capital-efficient milestones that systematically de-risk the path to scale

The bar is high because the stakes are high. Deep tech investments take longer, cost more, and have more binary outcomes. But when they work, they create the companies that reshape entire industries.

Know your VC: Not all funds play this game. Smaller funds can afford smaller outcomes, corporate VCs have different strategic motivations, and government funds may prioritise impact over returns. Understanding who you're working with and what success looks like for them is crucial for building the right partnership.

2. What Outset Invests In (at Seed)

At Outset, we focus on seed-stage deep tech companies where breakthrough science meets massive commercial opportunity. Our investment thesis is built around three non-negotiable pillars that work together to create investable propositions.

Beyond Seed: What We Track

As companies mature, we closely monitor their ability to:

• Attract scarce technical talent from limited global pools
• Build commercial partnerships that validate R&D direction before revenue
• Secure follow-on capital from investors who understand deep tech timelines
• Execute against milestones that systematically de-risk the path to scale

Outset’s Investment Process

Every potential investment undergoes rigorous technical evaluation including founder interviews, site visits, independent technical deep dives with industry experts, and IP diligence. We're looking to make informed bets on breakthrough technologies with credible paths to billion-dollar outcomes.

The bar is high because the stakes are high. But when deep tech works, it creates the companies that reshape entire industries.

Outset Ventures — Launchpad for NZ’s Deep Tech Startups

outset.ventures

Outset Ventures offers specialised lab and prototyping facilities for deep-tech and hardware startups, alongside early- to growth-stage investment for science-led ventures. Founded by the first wave of Kiwi innovators in deep tech. Founders can access physical infrastructure, expert support, and capital under one roof, making it a launchpad for NZ-based deep tech startups.

3. What Qualifies as Patentable IP (Think Globally, not Locally)

As a New Zealand researcher and founder, you need to think internationally about patents from day one. Why? Because your key markets, acquirers, and competitors are likely overseas. IP strategy is specialised work, we encourage all of our startups to work with specialist (like our friend Tim Stirrup from Prime Innovation).

The patent rules that matter most are those in your target markets and where you will manufacture - typically the US, Europe, and China.

Universal Patent Criteria (applies almost everywhere):

What's Typically NOT Patentable (with Important Variations):

Practical approach:

1. File your provisional in Australia (good search options) or NZ
2. Be strategic about timing – After your provisional, file a Patent Cooperation Treaty (PCT) application to delay national filings and costs by another 18 months
3. Think globally about patent claims - will they work in your key markets e.g. US? Europe? China?
4. Focus protection on the big markets - US, Europe, China, and Japan typically matter more than NZ and Australia
5. Get advice from firms with international experience - NZ-only patent expertise isn't enough

Remember: You're not building a NZ company that happens to export. You're building a global company that happens to be based in NZ.

Focus on creating IP assets that align with the needs of your future acquirer or investor.  Your IP strategy should reflect this from the start.

Critical Differences that Affect your Strategy:

Practical approach:

File your provisional in Australia (good search options) or NZ

Be strategic about timing – After your provisional, file a Patent Cooperation Treaty (PCT) application to delay national filings and costs by another 18 months

Think globally about patent claims - will they work in your key markets e.g. US? Europe? China?

Focus protection on the big markets - US, Europe, China, and Japan typically matter more than NZ and Australia

Get advice from firms with international experience - NZ-only patent expertise isn't enough

Remember: You're not building a NZ company that happens to export. You're building a global company that happens to be based in NZ.

Focus on creating IP assets that align with the needs of your future acquirer or investor.  Your IP strategy should reflect this from the start.

Why this matters for NZ startups: An NZ patent application is often just a priority placeholder. The real value comes from protection in your commercial markets. A granted NZ patent in a country with 5 million people won't excite investors or stop international competitors.

4: Working with Your University Tech Transfer Office (TTO)

What a TTO Does and How to Engage Them

Your university's Technology Transfer Office (TTO) bridges academic research and commercial application. These organisations, listed below, manage how university discoveries become real-world products and services.

Start engaging your TTO before publishing anything with commercial potential. Book an introductory meeting to understand their processes and timelines. Most TTOs welcome proactive researchers—it simplifies their work and improves commercialisation outcomes.

How to file an Invention Disclosure Form (IDF)

The Invention Disclosure Form starts your formal commercialisation journey. This document captures your invention's key details and helps the TTO assess its potential.

Submit your IDF 3+ months before any public disclosure. TTOs need time to assess patentability, search prior art, and file provisional patents. Remember: in most countries, public disclosure before patent filing destroys patent rights.

Role of Your Principal Investigator (PI) in Approvals

Discuss your commercialisation plans with your PI early. Some actively encourage entrepreneurship; others worry about distraction from research. Understanding their position helps you find a mutually beneficial path forward. In general, if a professor wants to be a co-founder but not leave to join the venture full time, it is important they don’t retain significant ownership. Best practice is 5% which should be vested with agreed ongoing contribution to the venture.

What NZ University TTOs Usually Require Before Licensing

These requirements can often be well in excess of what a venture capitalist will require to back you. Its worth remember that you get a lot of moral authority from bringing money to the table which can shortcut a lot of these requirements and improve your negotiating position.

Typical Commercial Terms

• Equity: 10–25% is standard, though ranges from 1–49% exist in the market. You’ll notice a tension here with investors who are typically looking for 10% or less.
• Royalties: Single-digit percentages (ideally under 5%) with caps
• Upfront fees: Usually minimal to preserve early-stage capital
• Milestone payments: Linked to commercial, not technical, achievements

How to Secure Your Intent to Spin Out (and Protect IP in the Meantime)

Declaring spin-out intentions whilst protecting IP requires strategic planning:

Remember: TTOs generally support spin-outs as they bring committed founders and validated commercialisation paths. However, they must protect university interests and justify public research investments. Understanding both perspectives creates agreements that launch successful companies whilst maintaining valuable university relationships.

Insider Tip: I have seen the best success for founders who negotiate on an “arms length” basis. This means not relying on the TTO to help with company formation. But rather starting the company yourself and negotiating with the TTO for a license on a purely commercial basis.

5: What Investors Look For in Spinout Terms

6: Negotiating From a Founder's Perspective

7. New Zealand Deep Tech Innovation Hubs & Commercialisation Departments

NZ Deep Tech Innovation Hubs

Incubators & Accelerators for New Zealand Deep Tech Founders

NZ Deep Tech Commercialisation Departments

Coming in Month 2- What Counts as Deep Tech Traction?

Deep Tech Rounds, Funding Types, and Founder Ownership

Deep tech startups often have longer development timelines, heavier research requirements, and slower paths to revenue than typical software or consumer startups. This means your funding journey will look different—and understanding how investment stages, funding types, and ownership evolve over time is crucial. This guide walks through how deep tech startups are typically funded at each stage, what types of capital are available, and what happens to founder ownership along the way.

Outset Ventures

Champion of Deep Technology Founders in Aotearoa New Zealand.

Outset's mission is to bring New Zealand’s deep technology innovations to the world stage by helping founders turn unique science and engineering-based ideas into companies that deliver real-world solutions on a global scale.

We are New Zealand’s only technology incubator with flexible laboratory and workshop facilities designed to support the development of early-stage, deep technology start-ups.

We have a 20+ year history of technology commercialisation on-site, with notable alumni including Rocket Lab, LanzaTech and Mint Innovation.

Our unique facilities and extensive experience as founders mean we offer an unparalleled investment opportunity to back credible, innovative founders operating on the forefront of new industries.

Hello@outset.ventures