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Download a summary of the talks and discussion - Institute of

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Download a summary of the talks and discussion - Institute of ...

    CAN/001a

    Show me the Money 18 February 2009 Summary of talks and discussion

    Dr Norman Apsley, Northern Ireland Science Park

    This workshop will present three different approaches to crossing the ‘valley of death’

    between physics research and a sufficiently risk-free product: funding from private

    capital, government support and philanthropic investment. The biggest need of any

    young entrepreneur is cash, and it doesn’t come with the same ease as research grants. The value proposition and sense of risk are both quite different.

Ashley Evans, Director, Electronics KTN

    ? Great innovations can come out of the toughest times: in the 1930s, 3 million

    new homes were built, the automotive industry increased output by 50%,

    manufacturing output grew by 11% and the first holiday camps appeared.

    ? The UK Government’s Knowledge Transfer Programme is vast and includes

    Knowledge Transfer Partnerships, Knowledge Transfer Networks, Industrial

    CASE awards, Doctoral Training Centres, Collaborative Research

    Programmes and Innovation Platforms

    ? Four actors are needed in the innovation cycle: broker, inventor, financier,

    transformer

    ? Research shows that developed nations spend ~$1270 per capita per year to

    1boost R&D and KT; however returns have been minimal in the UK due to a

    need for improved ‘broker’ and ‘transformer’ links between inventors and

    financiers. National employment, power and wealth depend more on the

    deployment of innovations than on the invention itself.

    ? The KTN’s tool, ‘Fundmap’ guides start-ups through the most relevant 10% or

    2so of the ~3000 funding sources available. Maps across four broad funding

    categories: research, commercialisation, product development and company

    growth, with filter options by region, market, type of funding and company

    development stage. See www.fundmap.co.uk

     1 http://www.forrester.com/rb/research 2 http://www.conservatives.com/pdf/document-richardreport-2008.pdf

    Show me the Money 18 Feb 2009 Page 1 of 3

    Summary of talks and discussion updated 2 Mar 09

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    ? The UK has strengths for high tech firms: a strong academic base for ideas

    generation; good capital markets; flexible labour laws (with a positive impact

    on retraining); good intellectual property protection.

    David McMeekin, London Technology Fund

    ? the equity gap is increasing because young high tech companies are very

    high risk investments funders move up the ladder because the returns are

    better, and risk and reward are out of balance

    ? Bank lending not appropriate for loss-making tech start-ups with no means

    to service or repay debt and little security

    ? many government support schemes have appeared in the past 10-20 years

    but there remains a shortage of early stage tech equity funds

    ? the current climate means that many SMEs are suffering from loans which

    they cannot repay what is often needed is equity, hence new government

    schemes

    ? Business angels may still invest but are wary of getting involved with capital

    intensive high tech proposals

    ? The North East/North West of England and Scotland have regional tech funds

    as an example of this type of public support for new businesses London’s

    LTF is active but very small

    ? The LTF was established to fill the gap in London. Must co-invest. LTF acts

    as a catalyst already attracted over ?18m funding to high tech companies in

    London.LTF can help in strengthening management teams, identifying

    marketing strategies/routes to market, provide introductions to major tech

    corporates, and identifying suitable premises

    ? Funds such as LTF are a proven way for UK to improve its science-based

    entrepreneurial environment

    ? Company must be seed/start-up/loss-making early stage tech SME with head

    office and senior management in London in order to be eligible.

    ? the LTF 2009 competition opens for applications today, and closes 30 May.

    Prizes include ?100,000 of free workshops, a share of up to ?1m of

    investment and speed-dating with global technology companies. Other dates,

    rules, etc., available at: www.londontechnologyfund.com

    Show me the Money 18 Feb 2009 Page 2 of 3

    Summary of talks and discussion updated 2 Mar 09

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    Dr Andrew Mackintosh, Royal Society Enterprise Fund

    ? some founders/CEOs have been working with start-ups 3-9 months, unpaid,

    to try and acquire funding

    ? the Royal Society has a role to play in highlighting the importance of the

    commercial/societal application of excellent science among the academic

    community

    ? Historically, since its founding, Fellows of the Royal Society have been

    involved in commercial applications of science as well as blue-skies research;

    the Society is uniquely placed to encourage cultural change and has

    extensive networks and relationships

    ? The Enterprise Fund aims to support science start-ups and to make money;

    the initial emphasis is on physics- and engineering-based companies; and it

    also aims to attract additional investment activity into the areatimescales for

    support are open-ended as the fund is ‘evergreen’

    ? the way profits are recycled into further support for start-ups appeals to the

    scientific community

    ? grants are awarded on the basis of the entire business case, not on a

    matched funding basis or so on

    ? Around 100 applications already received, applications can be made at any

    time

    Q&A

    ? TSB funds have been criticised as ‘more interested in HEIs than in real

    business’ ? Very high returns (approximately 10x) are required for those successful LTF

    investments, to compensate for the large number of failures. Typical return

    from VC investment between 2000-2006 was -0.6%

    ? Large corporates do not really have a role to play in supporting high-tech

    SMEs, but government procurement does. Some cultural change is required

    here in order to maximise opportunities for new technologies and companies ? HEI spin-out managers and KT officers have an improving profile within HEIs,

    although sometimes still add an extra unnecessary layer; can sometimes lack

    clarity on their objectives (whether to make money for the HEI, or to

    disseminate the academic work)

    Show me the Money 18 Feb 2009 Page 3 of 3

    Summary of talks and discussion updated 2 Mar 09

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