The Grant Changing Funding Landscape for Innovative Companies. Jo Derbyshire Cresco InnovationLtd

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1 The Grant Changing Funding Landscape for Innovative Companies Jo Derbyshire Cresco InnovationLtd

2 OVERVIEW Types of R & D funding for companies (mostly for SMEs.) InnovateUK European Commission Crowd Funding Tips for success

3 UK single company UK collaborative EU single company EU collaborative Charities Small grants (less than 100k) Larger Grants ( 100k plus) Themed calls Catalysts SBRI Themed Small and Large grants calls Catalysts SBRI DSI phase I DSI phase II Eurostars (for SMEs) Fast Track to Innovation Themed calls Wellcome Trust Cancer Research Trusts

4 UK Government Spending Review Innovate UK will be brought into the new Research UK umbrella body GOOD NEWS: Effectively no cuts Funding to reach 165 million per year by , so that total support is maintained in cash terms; New competitions are now being announced

5 Simplification One portal for uploading, standard format One set of rules re intervention rates etc Same evaluators across the schemes Better intervention rates on some schemes (70%)

6 BUT: Concerns over the conversion of Innovate UK grants to new finance products by 2019/20. Only two open calls per year previously SMART was always open Not clear which streams will be converted or even dropped. Certainly some changes for the Smart funding stream which has become ever more competitive, but timescales not known.

7 Key facts The core budget for 2016/17 is 561m. This is split across competitive grant funds, catapults and innovation centres and knowledge transfer and innovation networks. The budget is split to focus on industry sectors to simplify the offering: Industry Focus Budget First Deadline Emerging and Enabling Technologies 86m October 2016 Health and Life Sciences 117m September 2016 Infrastructure Systems 150m July 2016 Manufacturing and Materials 137m May 2016 Open Programme 71m June 2016

8 Within each of these sectors there will be two broad competitions each year Two open competitions for applications from any sector within the open programme Innovate UK will be assessing all applications on the same criteria as before so the same questions need to be considered Innovation, Technical Risk and Market Potential.

9 European Funding - HORIZON 2020 Horizon 2020 is the biggest EU Research and Innovation programme ever with nearly 80 billion of funding available over 7 years (2014 to 2020)

10 BREXIT??? Public investment in the UK research base is currently flat-lining in real terms (and declining as a percentage of GDP), while EU spending has trebled since The comparison suggests that, if anything, the EU has a positive effect on the UK commitment to research.

11 BREXIT??? Scientists for Britain claim UK could achieve same scientific benefits by being outside EU. Switzerland and Israel are associated states rather than full members and have higher or comparable success rates in applications for grants and win more funding per head of population than UK EU would release a dividend that could easily be used to boost UK spending levels.

12 How We Rank in Europe In the last full funding period, (Framework 7), the UK won the lion s share of the most prestigious grants awarded by the European Research Council - 1.7bn. Germany won 1.1bn, Switzerland 0.6bn and Israel 0.4bn. This pattern has broadly continued in the present funding period ( ) the Horizon 2020 programme. UK-based researchers are the lead coordinators in far more projects in Horizon 2020 than any other nation: 892 compared to Germany 532, Israel 90 and 15 Switzerland Being full members means we get to take part in the policy making

13 DSI Funding SME instrument under Horizon 2020 It will target highly innovative SMEs showing a strong ambition to develop, grow and internationalise Only SMEs will be able to apply for funding, and even single company support will be possible to ensure market relevance and to increase commercialisation of project results. SMEs can decide how best to organise the project and with whom to collaborate. Phase 1 market introduction Phase 2 product development

14 Phase 3+coaching 2% budget Phase 1: Concept and feasibility assessment Input: Idea/Concept: "Business Plan 1" (~ 10 pages) 10% budget Activities: Feasibility of concept Risk assessment IP regime Partner search Design study Pilot application etc. 10% success 30-50% success Output: elaborated "Business plan 2" Lump sum: ~ 6 months Phase 2: R&D, demonstration, market replication Input: "Business plan 2" plus description of activities under Phase 2 (~ 30 pages) 88% budget Activities: Development, prototyping, testing, piloting, miniaturisation, scaling-up, market replication, research Output: "investorready Business plan 3" M EC funding ~ 12 to 24 months Phase 3: Commercialisation Promote instrument as quality label for successful projects Facilitate access to private finance Support via networking, training, information, addressing i.a. IP management, knowledge sharing, dissemination SME window in the EU financial facilities (debt facility and equity facility) Possible connection to Procurement No direct funding

15 Crowd Funding Crowdfunding -raising finance by asking a large number of people each for a small amount of money. Until recently, financing a business, project or venture involved asking a few people for large sums of money According to Nesta, crowdfunding raised $1.5 billion for businesses in 2011, and in 2012 one project raised over $1 million

16 The websites take around 7% of money raised. And sometimes the site also takes a slice of returns paid to investors, too. Changing the face of the seed funding landscape Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS)

17 KEY ELEMENTS FOR A GRANT Technical Innovation Commercial Innovation Risk Potential Return on Investment (c1000%+)

18 Technical Innovation Comparison with state of the art, showing an improvement over current approaches Patent is good evidence 5k Grant funding can be used for new IP filing Innovation Section must score 80% for whole bid to pass

19 Commercial Innovation Is the new product going to be quicker/cheaper/smaller/ better than current offerings? Will the product be easy or difficult to take to market Is there market pull? Why will customers buy it?

20 Commercialisation How will the product be sold? Who to? How many? Price? Are the applicants in discussions with potential customers? Letter of support? Who will the applicants target initially? What is the route to market? What is the return on investment?

21 ROI Calculator

22 Risks Project needs to demonstrate that it is risky, and that Government intervention is needed. Essential to have a good mitigation strategy to accompany the risks Risk Table usually added, see example

23 Section 7 Team Track record of the company CVs of key team members CVs of sub-contractors Are the team credible?

24 Jo Derbyshire

SME support under HORIZON 2020

SME support under HORIZON 2020 Dr Bernd Reichert Unit "Small and Medium-Sized Enterprises" DG Research and Innovation Research and Innovation 1 The Analysis Outcome of impact assessments Less than 50%