Money, mentors and markets

A research council has broken new ground by enlisting an external fund management company to distribute £2 million to get universities to commercialise their research.

In what is thought to be a first for any council, the Engineering and Physical Sciences Research Council has contracted Finance South East - a not-for-profit business owned by a regional development agency - to run a two-year pilot programme, in which research projects that have previously won EPSRC funding could gain additional grants of up to £100,000 to make a commercial success of their work.

If the pilot goes well, the scheme could be rolled out more widely.

The EPSRC, like most councils, already has a follow-on fund that supports the commercial exploitation of work it has underwritten. But under the pilot Collaboration Fund, Finance South East will administer the scheme and decide which projects to back.

Uniquely, successful projects will be given mentoring support through a programme run by the fund management company as part of its deal with the EPSRC.

Under this arrangement, researchers will be paired with an experienced entrepreneur who can provide objective advice. Mentors will be drawn from Finance South East's network of industry experts. The company will also provide business planning advice.

"We were looking for ways of giving researchers who were interested in follow-on fund activities some additional support, and so we thought we would approach people whose business that is," said Dave Mahoney, a portfolio manager in the EPSRC's economic-impact team.

He said "money with mentoring" was an often-mooted concept, but one that was difficult for the council to deliver alone.

"The added value that we hope to offer is entrepreneurial hand-holding," Mr Mahoney explained. "We are doing it to support the projects and the researchers, but we are also doing it to see how the relationship works and what added value researchers get from a body such as Finance South East."

Universities seeking funds under the pilot will apply directly to Finance South East. The first call for preliminary proposals closes on 22 May. Two other rounds will run later in the year, opening in July and November.

Critically, universities will need to have a commercial collaborator already lined up to be eligible to take part, and it must be clear that their ideas stem from earlier EPSRC funding.

Projects must also be farther down the commercial track than is expected of those bidding for follow-on funds - the concept for commercialisation must already be clear, if not fully proven, Mr Mahoney said.

Although Finance South East will make the initial assessment of bids, the council will vet proposals to ensure that there is a proven link to previous funding and will advise on any technical questions, he added.

If Finance South East judges a project to be commercially viable, the university will receive money directly from the EPSRC - the funds are for the institutional side of the collaboration, not the industry partner.

Overseeing the scheme at Finance South East, which is a subsidiary of the South East England Development Agency, is Zoe Courtney, commercialisation fund manager.

She said the firm was well versed in assessing commercial potential because it was already managing public and private funds of more than £20 million - primarily by investing in small knowledge-based businesses. She added: "We will be looking at the applications from a commercial aspect - specifically, the economic impact we think will result."

Proposals should demonstrate a clear "route to market", showing that there is demand for the product and outline plans to attract customers.

Plans that included tangible contributions from commercial partners would be favoured, Ms Courtney added. "We would like to see them making some kind of commitment to the work - not necessarily a financial one, but maybe people, equipment or facilities."

She encouraged everyone whose EPSRC-funded research had commercial potential to apply, but stressed that it was "really important" for projects to have true market potential if they were to stand a chance of winning funds.

zoe.corbyn@tsleducation.com

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