From Idea to Business.
From CTU to the World.

A spin-off is a company (usually a limited liability company, or s.r.o.) founded to commercialize the results of research, development, or other intellectual property (IP) created by CTU employees in the course of their work. CTU holds an equity stake in such companies through its subsidiary ČVUT Tech s.r.o.

A university startup is a company founded by students, graduates, CTU employees, or other people affiliated with the university to pursue their own business plan. Unlike a spin-off, it does not use intellectual property created by employees in the course of their work for CTU. CTU holds an equity stake in such companies through its wholly owned subsidiary ČVUT Tech s.r.o.

The main difference lies in the origin of the intellectual property the business is based on.

A spin-off commercializes intellectual property created by CTU employees in the course of their work.

A university startup pursues its own business plan, which is not based on using intellectual property created for CTU.

So the founder's employment relationship with CTU does not, by itself, determine whether a company is a spin-off or a startup. The origin of the intellectual property is confirmed by the founder's faculty or CTU unit.

Equity is an ownership stake in a company. It shows how large a share of the company a person owns. If CTU acquires, for example, 5% equity, it becomes the owner of a 5% stake in the company through ČVUT Tech s.r.o. As a minority shareholder, ČVUT Tech has the right to vote at the general meeting (5% of the votes), the right to information about the company, and the right to a share of its profits.

Example: The founders own 95% of the company, and ČVUT Tech s.r.o. owns the remaining 5%.

Royalties are license fees paid for the right to use CTU's intellectual property (for example, a patent, software, a utility model, or know-how). Under CTU's standard terms, a one-time fee of CZK 25,000 is paid when the company is founded. In addition, royalties are paid as a percentage of the net selling price of a product or service based on the transferred CTU intellectual property (that is, after taxes and fees are deducted).

Example: A company sells a product based on CTU technology for CZK 121,000 including VAT, which is a net selling price of CZK 100,000. At a 5% royalty rate, the license fee is CZK 5,000.

CTU's proposed model is based on the principle of 5% equity + 0% royalties*.

The 0% license fee applies from the moment the spin-off obtains a qualified investment. Until then, the company pays license fees at the rates set out in the standard terms. Payment of the license fees is deferred for the first three years after the license agreement is signed.

CTU standard terms

CTU applies a model of 2% equity (no royalties). CTU acquires a 2% ownership stake in the company through ČVUT Tech s.r.o.

A qualified investment is a capital investment of at least EUR 200,000 in the company from an independent external investor, such as a VC fund, a strategic investor, or an industrial or business partner.

Grants, subsidies, funds provided by the founders or their family members, and investments below the set minimum do not count as a qualified investment.

Reaching a qualified investment is an important milestone in a spin-off's development and has two contractually defined consequences:

Permanent exemption from royalties: once the conditions of a qualified investment are met, the company is permanently exempt from paying license fees (royalties) to CTU.

End of anti-dilution protection: the contractual protection that keeps ČVUT Tech s.r.o.'s stake from shrinking in percentage terms when new investors come in comes to an end.

The exact conditions of a qualified investment, including which forms of investment count and how reaching the EUR 200,000 threshold is assessed, are set out in the relevant contract documentation.

Dilution is a proportional reduction in the percentage stakes of existing shareholders, typically when a new investor joins the company. Through ČVUT Tech s.r.o., CTU protects its stake against dilution until the company obtains a qualified investment of at least EUR 200,000. Once this threshold is reached, ČVUT Tech s.r.o.'s stake is diluted along with those of the other shareholders.

Example: ČVUT Tech s.r.o. holds a 5% stake in a spin-off. When an investor comes in with a qualified investment of EUR 200,000 or more, this stake may be reduced proportionally, depending on the terms of the investment and the company's new ownership structure.

Commercialization revenue may include, in particular, royalties, proceeds from the sale of an equity stake (exit), and a share of the company's profits paid to ČVUT Tech s.r.o.

If the originator of the intellectual property is a CTU employee and also a shareholder in the spin-off, the revenue is divided as follows:

If the originator is a CTU employee but not a shareholder in the spin-off, their entitlement to a reward is governed by rector's order ČVUT_PR_2024_03_V01 (System and Methods of Commercialization at CTU), according to the following table.

The process of founding a spin-off or startup is described here: How to Start a Spin-off or Startup at CTU.

ČVUT Tech s.r.o. is a wholly owned subsidiary of the Czech Technical University in Prague. Among other things, CTU uses it to acquire and manage equity stakes in spin-offs and startups.

As part of the terms of ČVUT Tech s.r.o.'s equity participation in spin-offs and startups, CTU provides:

For spin-offs, the basic package also includes assistance with the transfer of intellectual property and with preparing the license terms. The package is part of the agreed equity participation and is not charged separately.