For each £1 that goes into helping universities with knowledge transfer, just under £2 is generated, it was claimed this week, writes Jessica Shepherd.
David Willetts, the Shadow Education Secretary, called for more efficient spending of the public funds that transfer university knowledge to the world.
He said public bodies spent about £292 million in 2003, while the income generated by universities from consultancy, licensing and collaborative research totalled £435 million - less than twice that.
He told academics and investors at a conference on university spin-offs:
"This means every pound of public third-stream funding has generated less than £2 of private-sector revenues for universities."
He urged universities and venture capitalists to work more closely, particularly at the early stages of knowledge transfer.
Mr Willetts said: "The earlier venture capitalists can get involved in university knowledge transfer, the better. A lot of people in higher education would appreciate that. I'm convinced that if we focus on putting in funds earlier, then even more progress can be made in the future.
"We should encourage venture capital firms to engage more closely with universities - either through university boards and technology-transfer offices or directly with departments."
He praised private equity firm Technikos for its £12 million deal with Oxford University to fund an Institute of Biomedical Engineering, which was announced in June.
Simon Acland, managing director of technology venture capital firm Quester, said: "It is a venture capitalist's job to get involved at the beginning and not to complain if there is not a perfect business plan. The relationship between venture capitalists and universities is changing for the better. There is less suspicion on both sides."