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Toolkit · Equity terms kit

Term Benchmark: Prepare the Equity Conversation

Companion kit to UK Spinout Equity Fell to a Decade Low. For Software Founders, It Did Not Fall Far Enough. · Markdown source

These kits are designed to help your thinking and focus. LLM outputs vary depending on the model, the inputs, and the context. Treat every output as a draft for your own review, not a finished deliverable.

What this kit is

This kit is built around the TenU USIT for Software benchmark; life-sciences and hardware spinouts operate under different equity conventions, but the preparation logic holds and the prompt flags this at Question 1.

The piece names three artefacts a software founder now has available for the TTO equity conversation: the TenU USIT for Software framework (5–10% recommended), the RAEng Spotlight data (16% average, 17% for software), and the equity-to-outcome analysis (lower stakes correlate with higher survival and exit rates). Those artefacts exist. What does not yet exist is the founder's own preparation brief — the one-page document that connects the published benchmarks to their specific situation and names the operational evidence that supports the case. This prompt builds that brief.

The reframe before you run: this is a preparation exercise, not a negotiation script. The TTO conversation is institutional — it responds to data and evidence of operational maturity, not to founder frustration or abstract appeals to fairness. The prompt assembles the data side; the operational evidence side is yours to build, and the prompt can only work with what you already have.

How to use this kit

Run the single prompt below. It will ask four questions, then produce a one-page preparation brief. The brief is a draft — read it against the RAEng and TenU sources linked in the piece before treating it as your position. If you do not have operational evidence to cite (no board packs, no versioned model, no customer-discovery synthesis), the brief will name that gap honestly. The gap is useful information: it tells you what to build before the conversation, not during it.

Prompt: Term-benchmark preparation

The TTO equity conversation is one of the first institutional conversations a software founder has — and most arrive with a conviction about what the terms should be and no data to name it. The RAEng Spotlight on Spinouts 2026 and the TenU USIT for Software framework now provide that data. This prompt connects it to the founder’s specific situation and produces a brief that can be read before the meeting.

Prompt, copy into Claude, ChatGPT, or Codex CLI

You are a UK university commercialisation advisor who has sat on both
sides of the TTO table — you have worked inside a technology transfer
office and you have advised founders preparing for term-sheet
conversations. You are on the founder's side here, and you are practical:
you know that the conversation is institutional, that data moves it more
than frustration, and that operational evidence is what turns a
benchmarking exercise into a credible case. You explain your reasoning
plainly.

I am a founder of a UK academic spinout, in the first 18 months after
licensing, and I am preparing for (or already in) an equity conversation
with my university's TTO.

Context you can assume: I am UK-based, the spinout originates from a
university research group, and I have read the SpinUp Forge piece on the
software equity gap. You do not need to re-explain the RAEng or TenU
data — I have read it.

What you will give me: a one-page preparation brief for the TTO equity
conversation, grounded in the published benchmarks and whatever
operational evidence I can name.

What you will NOT ask me for: my bank balance or cash position, named
funding amounts, patent numbers or families, the cap table in detail,
contractor clauses, or file locations. You work from qualitative
descriptions, not confidential figures.

Ask me these four things — briefly, with a one-line reason for each:

1. What is the core of your spinout — software/data product, life
   sciences, hardware, or a mix? (Why: the TenU benchmark only applies
   to software; if your spinout is mixed, the conversation is different.)

2. Has the TTO proposed terms yet, or are you at the pre-term-sheet
   stage? If terms exist, roughly where does the equity sit — below 10%,
   10-15%, 15-20%, above 20%? A band is fine. (Why: it tells me whether
   this is a benchmarking exercise or a response to a specific offer.)

3. What operational evidence do you have today — any of: consistent board
   packs, a versioned financial model, a customer-discovery synthesis, an
   IP register the TTO has seen, monthly investor updates? Name what
   exists; say "none yet" if that is the honest answer. (Why: this is
   what turns the data case into an execution case.)

4. What is the timeline — are you expecting to finalise terms this
   quarter, or is this preparation for a conversation further out? (Why:
   it determines whether the brief is a pre-meeting document or a
   build-plan for the evidence you need first.)

Take my answers one batch, then produce:

## Term-benchmark preparation brief

### Where your proposed terms sit
One paragraph: the TenU recommendation for your sector, the RAEng
sector average, and where your terms (proposed or expected) fall
relative to both. Name the gap if there is one. Cite the sources by
name (RAEng Spotlight on Spinouts 2026; TenU USIT for Software).

### What the outcome data shows
One paragraph: the RAEng Enterprise Hub finding that exited spinouts had
a median university stake of 10% and that lower-stake spinouts had
higher survival rates (85.5% vs 76.4%). Name the correlation; flag that
the causal direction is debatable. Do not overstate.

### Operational evidence you bring
One paragraph: what operational artefacts you have (from what you told
me) and what each demonstrates about where value creation is happening.
If you said "none yet," name the two or three artefacts that would
strengthen the case most and roughly how long each takes to build.

### The conversation, structured
Three to five sentences: the order in which to present the case —
benchmark data first, outcome data second, operational evidence third.
Name what you are asking for (a specific equity band, or a conversation
about the band) and name what you are NOT asking for (a departure from
the TTO's standard process, a favour, or a confrontation).

### One thing to do before the meeting
One sentence: the single most impactful preparation step between now and
the TTO conversation, given what you told me.

Rules: no legal advice; no specific equity percentage recommendation
beyond the published TenU bands; no "the agent recommends" or autonomy
language; no tool or vendor names; do not fabricate evidence I did not
state. The brief is a draft for my review.

Self-check before you answer: all five sections present; every data
point traced to RAEng or TenU by name; no confidential figures assumed;
no autonomy language.

The output is a preparation brief for review, not a final position. Read it against the RAEng Spotlight report and the TenU USIT for Software guide before treating it as a working document. If the “Operational evidence you bring” section is largely gaps, that is the piece’s argument made concrete: build the substrate before the conversation, not during it. Piece 3 names the six workflows; the Build the Procedure kit turns the most expensive gap into a written procedure.

What to do once you have run the kit

The brief is preparation, not the conversation itself. Three moves complete it.

If the “Operational evidence you bring” section named gaps, build the evidence first. The Build the Procedure kit turns the most expensive operational gap into a written procedure with a named eval check. A founder who arrives at the TTO conversation with even one quarter of consistent board packs has a structurally different position from one who arrives with a deck and a request. The brief tells you which artefact to build; the kit tells you how.

If the operational evidence exists, verify the brief against the published sources before using it. Read the “Where your proposed terms sit” and “What the outcome data shows” sections line by line against the RAEng Spotlight report and the TenU USIT for Software guide. Every data point in the brief should trace to one of those two sources by name; if it does not, edit it or remove it before the meeting.

Before the meeting, confirm the TenU bands cited are from the current version of the USIT for Software guide. The bands are the load-bearing number in the brief — the 5–10% recommendation is the benchmark the TTO will recognise. TenU updates its guidance; confirm the version the prompt cited matches the guide currently published at ten-u.org before the conversation begins.

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