Virginia advantage

The Virginia Advantage™ licensing terms incentivize forming new companies in Virginia to create jobs and enhance economic development in the Commonwealth. VCU Innovation Gateway supports inventor-founders as a part of our common goal to share discoveries and inventions made at VCU with the greater public so that all may benefit. Innovation Gateway has the exclusive responsibility to license VCU inventions to existing companies and startups.

Virginia Advantage™ terms include:

  • No cash upfront (“signing fee”)
  • Patent expenses:
    • Prior: Paid over a 1–2 year period
    • Ongoing: Paid by the licensee
  • Royalty rate: 2.5% net sales
  • Sublicensing:
    • 2 year stand-still sublicensing period
    • Pass-through royalty from sublicensee, and 25% of other considerations (lump sums, fees, milestones, equity, etc.)
  • Milestones: diligence milestones, negotiated with TTO and aligned to business plan
  • Equity or equivalent shadow equity:
    • 5% founders stock
    • $1MM anti-dilution threshold
    • Equal security rights as the inventor-founders
    • TTO retains preemptive, piggyback registration, co-sale, and information rights until change of control event
  • Startups must:
    • Founder-inventors must satisfy university COI management plan
    • Engage outside legal counsel
    • Inventor-founders must in sum own >25% of the outstanding shares
    • Have corporate governance documents before licensing
  • Startups will:
    • Submit a detailed business plan within 6 months
    • Secure an experienced business leader within 1 year
    • Secure >$250k of funding (from grants, F&F, angels, VCs, etc.) within 1 year from license execution
  • Eligibility:
    • Start-up must have primary place of business in Virginia (it may be incorporated in Delaware)
    • The inventor(s) are founders of the start-up
    • Relevant college(s) and TTO must agree that no special circumstances exist
    • Joint IP owners, if any, must agree in writing to Virginia Advantage terms
  • Termination conditions:
    • Material breach of license
    • Failure to meet mutually-negotiated diligence milestones
    • Other standard termination reasons