Investor's search for prospects pays off for Edinburgh start-ups

A chance remark from a Scottish businessman to a banking colleague has led to a better deal for new companies formed to exploit research at the University of Edinburgh.

Geoffrey Thomson, chief executive of Braveheart Ventures, mentioned to Jonathan Wilson, assistant director of business start-ups at Bank of Scotland, that his investment syndicate was trying to formulate ways to fund the university's spin-off companies.

The two organisations teamed up with the university to set up a scheme for these firms and funding will be available to those that qualify for an award under the Scottish Executive's SMART scheme, or equivalent.

Mr Wilson said that the scheme would help young companies with skills and experience early on, perhaps before a detailed business plan was complete.

"Few young companies have all the right skills," he said. "Maybe the companies will have strong technical skills but will lack marketing experience. We can identify what's needed early on."

He said that the bank was quite keen to promote the scheme to other universities but that no formal discussions had taken place.

The fledgling firms will benefit from hands-on help from Braveheart business experts and will have the chance to apply for equity funding from Bank of Scotland. Braveheart will act as lead investors and will coordinate the investment process. On average, a new company has been established from the university every month for the past three years.

Bob Smailes, managing director of Edinburgh Research and Innovation, the university's research and commercialisation office said: "Academic spin-offs often lack management skills. We are very excited that we now have two partners committed to sorting this out. Braveheart's investors will be rolling up their sleeves to help with companies wanting to take their intellectual property and research findings to market, and Bank of Scotland's start-up team is well equipped to advise and fund young high-growth businesses."

The university has so far generated 67 spin-off and start-up companies, including successes such as Wolfson Microelectronics, Lorantis, Rhetorical and MicroEmissive Displays. Mr Thomson said: "An unusual aspect of the SMART Support Scheme is the entrepreneurial expertise that can be levered from Braveheart's team of investors.

"We will provide non-executives who will work with the companies to deliver their business plans. They will also help out on the weak spots, such as marketing and the mapping of best routes to market."

Stewart Rogerson, director of start-ups, Bank of Scotland business banking, said: "University research spin-offs are a key feature of the growth start-up market. The opportunity to work with Braveheart and Edinburgh University to provide funding and support to these start-ups is exciting, and we will be looking for similar opportunities in the months ahead."