May 3, 2019 @ 13:52 by Richard Dawson
A new pilot funding programme to encourage business angels in the regions to bring investment and expertise to pioneering innovative small and medium companies has awarded £2m to two North-based projects.
A total of £3m of Innovate UK funding has been shared across three angel investor partners (AIPs). Each will work with local angel networks and groups.
A consortium led by Sunderland-based North East Business and Innovation Centre (BIC), has received £1m from Innovate UK to support the growth of local angel networks across the North East, Yorkshire and North West.
The programme, which partners with the Innovation SuperNetwork, Leeds-based North Invest and the national UK Business Angels Association, will encourage investment in innovative early stage companies.
Northstar Ventures, one of the most active early stage investors in the country, has also secured £1m to work with start-up businesses, focusing on spin outs from North East universities, to help them secure angel investment and grant funding to accelerate their growth potential at an earlier stage.
Paul McEldon, chief executive of the North East BIC, said: “We are delighted to be able to pilot the Regional Angel Investment Accelerator in the North of England to stimulate and grow the angel community. Our programmes support technology businesses at the forefront of innovation but we need to proactively develop an engaged and diverse early stage investment community in our regions to allow these businesses to grow and scale up. We are looking forward to working with Innovate UK, angel investors and all our partners to achieve this.”
Professor Adam Beaumont, founder of NorthInvest and member of the Masarati 100, commented on the funding: “My founding belief was to create an organisation which could drive grass roots growth through investment.
“The award of this fund is an important milestone in the evolution of Northinvest, moving from not only driving private angel investment, but having co-funds to manage as part of that funding process.”
Jake Berry, Northern Powerhouse Minister commented: “The importance of investing in a broad base of entrepreneurism across the North is a key tenet of achieving a true depth and strength to the Northern Powerhouse. Initiatives such as this, which can bring together public and private funds in an agile manner, has been borne out of the kind of cooperation which makes the North a great place to do business.”
Alex Buchan, director, Northstar Ventures, said: “As one of the leading early stage investors into UK businesses, we have been supporting cutting edge businesses in the North East since 2004. Working with angels has always been core to our offering, and we are looking forward to opening up more opportunities to those interested in investing in businesses with R&D projects.”
The aim of this pilot funding programme from Innovate UK, as part of UK Research and Innovation, is to increase the pool of regional angel investors prepared to consider investing in earlier stage, ambitious, innovative businesses in the regions.
The funding will be used to identify suitable investment opportunities and investors, as well as provide grants to businesses to deliver innovation projects with a view to longer term business angel involvement and future commercial success.
Successful businesses will receive a grant of up to 50% of the costs of a specific innovation project, which lasts up to 12-months and have total project costs between £40K and £300K.
Concurrent angel investment in the business will allow businesses to meet the rest of the costs and grow the business beyond the project. Applications to the scheme are via the AIPs who are responsible for raising awareness amongst both local angels and companies over the coming months.
The three AIPs are:
· North East Business and Innovation Centre (BIC) which is collaborating with the Innovation SuperNetwork, North Invest and the UK Business Angels Association (UKBAA), along with a number of local angel networks.
· Northstar Ventures Limited, an established venture capital fund manager with a strong track record of funding alongside angel investors.
· University of Bath for the SETsquared Partnership, which are collaborating with the UK Business Angel Association (UKBAA) and regional angel networks.