White paper: structuring spin-offs in Belgium (Cresco).

This Cresco white paper argues for more predictable, investable deal terms for Belgian research spin-offs, so negotiations don’t have to start “from scratch” as often.

Why this white paper?

According to the authors, spin-off creation in Belgium often remains slow and unpredictable due to differences between institutions (policies, templates, governance, IP mechanisms, and equity expectations). That costs time, money, and momentum—and can deter investors.

The core: a shared “landing zone”

The paper does not propose a single national template, but instead:

• a common language and set of principles
• transparent indicative ranges (equity/royalties)
• a limited menu of recognizable structuring pathways

The 3 structuring pathways

1) Equity model (often the default)

The institution receives a (fully dilutable) equity stake in return for access to the IP.

• Indicative ranges:
  • 15–25%: core IP with broad protection + high institutional contribution
  • 10–15%: important IP with partial protection (most common)
  • 5–10%: know-how/software, limited formal IP

2) Royalty model

The institution retains ownership of the IP and grants an exclusive license; the return comes via royalties.

• Indicative ranges (on net sales):
  • 0.5–2%: know-how/early-stage/software
  • 2–5%: core/patented technology with demonstrable protection
  • 5%+: exceptional and must be strongly justified
• Important: back-weighted cash obligations (no heavy fixed minimums in the early phase).

3) Hybrid model

A combination of equity + royalty or a (capped) revenue share.

• Guiding idea: roughly “half equity + half royalty” compared to a pure model, so the total deal value stays balanced.
• Variant: a simple revenue share (e.g., 1–2% of revenue) with a clear cap.

IP transfer: “progressive transfer model”

The paper argues for a staged approach:

1. Start with an exclusive license (sufficiently broad field of use + sublicensable, with clear investability)
2. Assignment after objective milestones (e.g., qualifying financing, revenue threshold, regulatory/tech milestone)

Goal: the spin-off team gains certainty to build and fundraise, while the institution does not permanently transfer the IP too early.

Guiding principles (summary)

• Trust founders and preserve sufficient upside
• Stay market-conform (also in the context of state-aid/public-sector logic)
• Transparency & predictability
• Focus on long-term impact (not maximum short-term proceeds)
• Milestone-driven structures
• Optimize for follow-on investment (clean cap table, standard governance)
• Proportionality in governance and reporting

Recommendations for the ecosystem

The paper makes, among others, the following recommendations:

• Publish spin-off policies with clear equity/royalty ranges
• Standardize where possible (while leaving room for sector differences)
• Aim for a turnaround time of max. 3 months from term sheet to completion
• Keep governance “mission critical” (avoid broad veto rights and heavy non-dilutable positions)

More about Cresco via Gentrepreneur

Via Gentrepreneur, founders can also discover benefits/support from partners, including legal advice from Cresco.
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