Safety in numbers

Chewing gum, underwater robots and other technologies, at a UK investor showcase.

Academics aren’t always good at bridging the gap between the lab and the market. But a group of four universities in southern England think they have found a way to do it.

The Universities of Bath, Bristol, Southampton and Surrey are betting that by going to market together, they will attract more investors to their spin-off companies. Last week, they gave their idea its biggest test yet, hosting a dog-and-pony investment conference showcasing 16 companies, in fields ranging from underwater robots to calling cards that memorize telephone numbers. Together, the companies were seeking to raise more than £18 million.

Over 150 visitors, from low-profile millionaires to loud-talking venture capitalists from across the UK gathered at the event last week.

“It was four universities coming together to promote to investors for opportunities coming out of the universities these days,’’ said Neil Bradshaw, the University of Bristol’s Director of Enterprise, in an interview. “Investors know that they have a much better chance to find something interesting here.”

Of course, putting spin-out companies on an investor cat-walk is nothing new – especially in Britain. With their research budgets under pressure, and government orders to speed commercial development of their discoveries, Cambridge, Oxford, Imperial College London, University College London, Manchester and many others host conferences, investor evenings and small exhibitions.

But investing in these spin-outs is extremely risky. Many never finish developing their technologies, run into market or financial problems, or simply have trouble getting good management to turn a university research project into a profitable company. As a result, most VCs give these tiny spin-offs – typically raising just a few hundred thousand pounds at the first, seed stage – a wide berth. Instead, they more often get funding from rich individuals, or “angel” investors, charitable organizations and sometimes a university’s own investment funds.

The SETSquared partnership was formed in 2001. The four universities currently represent almost a tenth of U.K. academic research spending, with more than 6,500 researchers.

“Historically some would say there is plenty of money but just not enough opportunity,” said Bradshaw. “Investors know by having four universities coming together they have (a wider) potential of research…. They are just reducing their risk.”

The companies that were vying for investors’ attention come from a range of sectors including bioscience, materials discovery, semiconductors, medical devices, drug discovery, new energy, IT, telecoms and nanotechnology.  Bradshaw said from the time of the showcase to investment could take about six to nine months to materialise.