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To spin-off or spin-out, that is the question

The Note has previously pondered this great conundrum, as the investment world has got a taste for this activity (where a larger organisation gives birth to another like an amoeba cell splitting) it’s become increasingly confusing to know which term is accurate. Challenged by a flyer from legal firm Freehills entitled Spin-offs: What You Need to Know, The Note returned to previous private musings on the subject as well as employing the source that even education ministers find indispensable: Google. While spin-out wins in the popularity stakes with 148 million results against spin-off’s 133 million, The Note feels the real answer is in the detail: spin-outs tend to reflect the commercialisation of research projects or technology developments, such as CSIRO’s creation of analysis equipment group Intalysis in February, while spin-offs are more or less limited to breaking up of existing organisations. Wikipedia devotes extensive space to both terms, and makes this profound statement: “much of the academic and popular literature in business, economics, finance, and management uses the term ‘spin off’ when ‘spin out’ is the correct description of the entity being described.” It then goes on to make itself completely unclear as to which term means what. We’ll let you be the judge.

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