I write this blog, conscious that I am neither an investor nor an entrepreneur as both roles require a specific skill set and qualities that elude my character. However, working within the investor partnerships team has provided me with valuable perspectives of an investor and an entrepreneur that allows me to write this blog.
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Firstly, what do investors look for when deciding to invest in a company?
Let’s start with the obvious, investors want to ensure they make a return from any investment they make, otherwise why would they bother getting out of bed each day? An investor will need to determine a number of factors before they part with any money, mainly:
- does the company have a service or product that is solving a problem?
- what is unique about the value proposition the company is offering?
- is there a market for the value proposition and has the company identified their target audience and any competition?
- who are the key team members that will drive the business, and do they have the skills and qualities to ensure the business scales and grows?
- what traction has the company achieved with customers, partners and collaborators?
- what are the company’s ambitions, and do they have a strategic plan to achieve this?
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Daily key challenges
In contrast, an entrepreneur faces many daily key challenges:
- cash flow
- strapped budget
- hiring employees
- marketing strategy
- raising capital
- business growth
- morale or even self-doubt
So how do you connect investors who have money with entrepreneurs who need the money to scale and grow their business? Innovate UK has developed a specialist Investor Partnerships model that helps connect businesses and investors.
What is the Investor Partnerships model?
The Investor Partnerships model is designed to bring together investors and entrepreneurs that both a have a desire to solve societal challenges effecting our world today. This can relate to:
- clean growth
- healthy ageing
- artificial intelligence
- the future economy
The Investor Partnerships model tackles the challenges faced by highly innovative UK businesses with strong growth potential in accessing the finance required to grow and scale. The aim of the Investor Partnership model is to encourage equity investment alongside a grant for innovative research and development projects.
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How has the Investor Partnerships model supported innovation and accelerated private investment to date?
To date, the key to our Investor Partnership programme being successful is ensuring we connect and work with investors who are not just looking to make ‘a quick buck’. They must have the capacity, capability, credibility and commitment to be an investor partner and be aligned with our strategic ambitions to make a difference.
There are various examples of where Investor Partnership programmes have made an impact that has exceeded our expectations. Kudos to the innovation leads and various teams within Innovate UK that work with us to help us make a difference!
One example area has been the Transforming Food Production programme, here an investor partner provided a company access to potential customers through unique links they have to the livestock sector.
The company was able to give a demonstration of their technology, allowing both parties to see the market opportunity for a new product through the eyes of important potential customers. This is a prime example of when grant funding and investment into a company creates a constructive impact and helps a company significantly progress to a rapid product offer.
By contrast, the Healthy Ageing investor partnership programme has faced various challenges ranging from COVID-19 to strategic changes that halted the collaboration from some key investor partners. Despite these challenges, the healthy ageing team has continued to on-board key impact investors that are willing to work together and invest in companies jointly.
In other programmes like Transforming Foundation Industries, we have on-boarded some key investor partners, including Speedinvest, whose ambition is to empower companies with actionable, aligned and game-changing support.
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So what do our investors and entrepreneurs think about the Investor Partnership Programmes?
Marie-Hélène Ametsreiter, General Partner at Speedinvest said:
We feel the programme has strongly helped our two portfolio-companies in securing runway – which wouldn’t have been easy otherwise.
By nature of business, startups active in fundamental industries often have a hardware-component or consulting-elements. It is therefore a lot more difficult to raise from conventional VCs. By receiving non-dilutive grants the fundraising from other VCs became a lot easier.
Tom Robinson, Founder and Managing Director, Adaptavate said:
The Investor Partnership programme has been a significant milestone for Adaptavate as we scale our carbon absorbing alternative to wallboard.
The way that it blends public support and finance to leverage private funds enabled us to scale much more effectively.
It resulted in a higher level of confidence and capital investment from investors than we previously thought. It has been a truly transformative programme to be part of.
Johan du Plessis, Tepeo, said:
The grant funding we received through the Transforming Foundation Industries Investor Partnership programme has enabled us to take on an invaluable programme of R&D work. This is creating a strong foundation for scaling our business.
So, what’s next?
As you can see, we have learned a lot about bringing investors and entrepreneurs together and we will continue to build upon the foundation of the Investor Partnerships model. We will continue to de-risk innovative technologies by offering non-dilutive grants alongside aligned investment to accelerate investment into highly innovative early-stage companies. We are launching our Future Economy programme shortly. Initially, we will invite investors to join us as investor partners. Then we will invite businesses to apply for funding alongside investment. So do stay connected with us for more information!
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Nazia has been with Innovate UK for over two years and has been involved in the Healthy Ageing and Transforming Foundation Industries Investor Partnership programmes.
She is a key member of the investor partnerships team and believes it’s vital for UK companies to connect with investors to help them scale and grow their businesses.
Nazia considers equality, diversity and inclusion to be a fundamental cornerstone to reaching out and enabling UK businesses access to opportunities to accelerate scale and growth.
Nazia is a qualified solicitor and has many years of experience working within the investment management sector. She has worked for many financial companies including:
- PIMCO Europe
- Aviva Investors
- Barclays Bank Plc
- Freshfields Bruckhaus Deringer
- Deutsche Bank