Money to market the best business ideas

With the Pounds 45 million University Challenge Fund now allocated, successful bidders are fast developing their business plans. Julia Hinde reports.

Christmas has come early for 15 university consortia which last month struck gold netting a share of the first Pounds 45 million University Challenge Fund.

After months of bidding and waiting by universities, science minister Lord Sainsbury announced the winning University Challenge teams - including a joint bid from the universities of Bath and Bristol, which scooped Pounds 3.75 million to establish a new seed fund.

On top of the Pounds 1.25 million already pledged by the two universities, fund managers now have Pounds 5 million to help turn university research into real business opportunities. But will they succeed?

With the commercialisation of university research in everyone's minds, The THES will follow the ups and downs of the Bath/Bristol team as it sets out on the road to possible commercial success.

"We have a queue of projects looking for support," said George Lunt, deputy vice-chancellor at Bath University. He put the bid together and is now a board member of Sulis Innovation - the company set up to commercialise the universities' research. "Among our own staff here in Bath, I can think of half a dozen business projects that are ripe for the money the challenge fund can provide."

Following recommendations from the Department of Trade and Industry, Sulis Innovation - a shortened form of Aquasulis, the Roman name for Bath - has a board of ten, dominated by business executives and others with experience of commercialising research.

There are four academic representatives on the board. One is a law specialist and another is a co-founder of successful spin out company Oxford Molecular. The remaining six board members come mostly from venture capital companies and high-tech firms. Together they will recommend to Questar, the venture capital firm that is managing the Pounds 5 million fund, which technologies to pump prime with funds.

"One of the major features of this money is that it is not going to be put under the complete control of academics," said Professor Lunt, who added that academics might tend to use the money as they would any other research grant.

Instead the Pounds 5 million will be ring-fenced and decisions, said Professor Lunt, will be based on business factors - that is, whether an idea is likely to make a commercial success. Recommendations will be fed to Questar which will be responsible for the investment.

Sulis has appointed a chief executive, Carol Dent, an independent consultant specialising in technology transfer, who will trawl both universities for suitable ideas.

Among the research Professor Lunt feels may be considered for funding is a new way of making optical fibres and advanced forms of drug administration.

"With many of these ideas we need professional advice, both legal and business, about how to take it to market," said Professor Lunt. "That needs to be paid for. But it is not money you can take from research grants or core university funds."

The fund is set to invest between Pounds 50,000 and Pounds 250,000 in each business venture. The remainder of the fund will be invested in lower-risk, high-return accounts to increase it.

"The target is to triple the value of the fund," said Professor Lunt. "Until the Pounds 5 million is tripled, the university cannot take any money from the fund to be used on other things. So there is not direct benefit to the university until the fund triples. It is a tall order."

He added that of the 15 challenge funds, there appears to be an expectation at the DTI that not all will succeed.

"There are bound to be one or two which fail, but we do not intend to be one of them," said Professor Lunt, adding that the DTI is keen to change the current negative British attitude to business failure.

With the DTI keen for the funds to be up and running as soon as possible, Ms Dent, is already looking for research which can be transformed into money-making ideas.

She said: "We will be looking for projects that show potential to generate sustained competitive advantage. We need to look for good ideas in market areas with growth potential."

* The THES will return to Silus over the next few months.