I joined the Remodeling Meals Manufacturing (TFP) staff simply over a yr in the past, after spending 5 gratifying years with the KTN Agri-food staff. I helped many particular person firms on their funding journey, however, whereas I repeatedly witnessed SMEs successful the funding ‘battle’ by securing a collaborative R&D undertaking, they solely had an opportunity of successful the funding ‘struggle’ as soon as they secured personal funding.
My mindset turned that, for a sector like Agri-food, transformative concepts from proficient SMEs will solely turn into actual after they willingly leap on the funding merry-go-round.
Extra than simply introductions
Certainly one of my areas of focus at KTN was supply of the Agri-food Funding showcase, with further assist from Innovate UK. The Showcase occasion acted as a mixing bowl for introductions between entrepreneurs and buyers, and sparking dialogue on enterprise success by way of new partnerships.
It was an amazing success too, with over half of all UK Agri-food offers together with SMEs concerned within the Showcase – however, like many innovation lovers, I wished extra! I used to be eager to maneuver past simply serving to discussions, however to take the following step of cementing these relationships by way of funding assist. So, becoming a member of TFP to develop a funding intervention to do precisely this was a chance to not be missed.
Aligned funding
Whereas UKRI funds initiatives and buyers fund firms, the important thing to a profitable partnership is to align the 2. Within the case of the Agri-food sector, we knew late-stage undertaking functions have been undersubscribed – in all probability resulting from decrease funding charges – regardless of being key to creating innovation prepared for commercialisation.
The investor is commonly trying on the identical SMEs in the event that they present this want to scale and develop, thus driving the SME’s first important lump of personal money. We name these Sequence A offers and the UK Agri-food sector is 45% decrease at securing them in comparison globally.
Our goal is to enhance this statistic. In a nutshell, sole SMEs apply to TFP to fund their undertaking thought, whereas concurrently in search of personal funding not less than twice the extent of the TFP grant. Solely when the funding is aligned can the grant be secured, so the TFP Sequence A Investor Partnership Programme was born.
Traders
For this to work, it was essential to carry on board a bunch of lead buyers keen to take part. As buyers don’t have a tendency to watch the Innovate UK grant competitions, to drive functions it was time to choose up earlier relationships to elucidate the brand new method.
I had hoped to fulfill them in particular person, however lockdown put an finish to that – so it was again to the telephones, e mail and video calls. Thankfully for me, Daniel Carew from IQ Capital was one in every of my first. Not solely did he wholeheartedly purchase into the method, he supplied some useful perception into the funding facet and the best way to maximise potential engagement.
Whereas the TFP problem shouldn’t be in search of fairness within the SME, we do act like an affect investor, utilizing undertaking monitoring and assist to make sure their undertaking will likely be transformational to the sector – and thereby reaching the goals of the problem.
It’s, after all, as much as the funding group to assist the SME by way of funding the enterprise components that TFP can’t attain, and this clarification enabled us to encourage 15 functions from world Traders. Of those, 11 buyers have been chosen by our appointed panel as we glance to supply alternatives for SMEs throughout the varied panorama of enterprise and innovation within the Agri-food sector.
Bootcamp
Now we had our pool of buyers, we would have liked thrilling and impressive undertaking functions from the SME group – and we weren’t disillusioned! However have been these nice concepts prepared for funding? In lots of instances in all probability not. So to assist this, the highest 31 functions deemed eligible for grant assist have been invited to an Investor Readiness Bootcamp (sure that may be a factor).
Right here, by way of over 22 hours of digital content material, with seven exterior trainers, 5 Investor classes and ongoing assist from KTN, the SMEs have been helped to grasp and pitch their funding, be taught what an investor is in search of, what a deal ought to appear like, and detailed data on funds, due diligence, IP and rather more.
Our cohort of firms are actually able to battle to safe their aligned funding, and we want all of them the luck on the planet.
What subsequent?
So the place can we go from right here? As we watch the offers being mentioned and look forward to phrases to be agreed, we hope to announce the winners in June. Sharing this journey with different ISCF colleagues, the message of aligned funding strikes on the coronary heart of what many wish to obtain to assist innovation development within the UK – and that this sort of funding mechanism is genuinely the way forward for late-stage challenge-driven funding. Hopefully, we’ll see success which implies we are able to increase even additional subsequent time round.
