Five Percent, Go in Peace

Carnegie Mellon University's tech-transfer process is anchored by what we call the Five Percent, Go in Peace approach — a first-of-its-kind spin-off model for academia.

It's a streamlined, common template for faculty based start-ups that limits university equity to 5 percent, capped at a $2 million dilution event. And it establishes clear royalty guidelines with a three-year delay in payments.

"Five Percent, Go in Peace" essentially ensures virtually no university interference in start-up operations.

This streamlined template has been augmented by supportive policies that allow faculty to incubate companies in University labs for short periods and that also allow faculty to hold C-level positions in the companies they create.

This approach has also been bolstered by the establishment of a supportive innovation ecosystem across the university.

This ecosystem consists of aggressive entrepreneurial training and outreach that engages more than 10 percent of the student population each year.

This and more information was the subject of testimony submitted by Carnegie Mellon University Provost Mark Kamlet to the U.S. House of Representatives, March 24, 2010.