One of the main concerns of spin-out companies is financial support in periods of high growth.
As one of the UK leaders in commercialising research and promoting entrepreneurship,
the University of Edinburgh has recognised an opportunity to invest in its spin-out.
In 2011 the University of Edinburgh established a fund called Old College Capital (OCC) with the support of the Endowment Fund. OCC works in partnership with investors who are interested in high growth potential businesses. OCC has a private sector Investment Committee and operates on a fully commercial basis.
Currently the fund invests an average of £250,000 in each company, and adopts a ‘co-investment model’, working alongside venture capitalists, Angel groups and corporate investors. External investors have welcomed the fund, and take confidence that the University is backing its own companies and sharing the risk. Richard Davidson, Chairman of the Endowment Fund, commented on support from the University and OCC for growing companies, saying:
“Edinburgh is a leading University for supporting entrepreneurs. Old College Capital, together with the intensive support mechanisms such as mentoring, advice and training,makes the difference to the startups and spin-out companies, and increases the chances of succeeding
and making a commercial return for investors.”
Previous collaborations with investment partners have proven to play a pivotal role in creating successful businesses. Besides additional funding, the partners provide valuable expertise and industry contacts; thus creating a mutual partnership which is beneficial for both sides. In May 2014, OCC invested £150,000 in Peekabu Studios, a technology company founded by Alex Cole, a Design and Digital Media graduate of the University. OCC’s investment joined one by Jenson Seed EIS Fund, which supports new businesses with up to £150,000, and for whom Peekabu Studios became the only Scottish start-up in their portfolio.
Most recently, OCC has backed Blackford Analysis, a University high growth spin-out company that provides software solutions for medical image processing. In early June 2014, Blackford Analysis was able to secure £800,000 funding from OCC, Archangel Informal Investments, TRI Cap and Scottish Investment Bank to further its expansion into the American market. Together with Old College Capital, the University is going to adapt its investment strategy through larger and longer-term engagements with companies like Blackford Analysis. In this way, enterprising academics can focus on building sustainable businesses while maximising the commercial impact of their research.
** this article is reposted from the 2014 issue of Infinite Magazine. For this article and further reading, visit the Edinburgh Research and Innovation Website >>