Twelve investor-ready spin-out companies from Irish third-level institutions pitched their new technology solutions to an audience of almost 400 investors and fellow scientists and researchers at the Enterprise Ireland Big Ideas 2019 event in Dublin Castle last month.
Kevin O'Sullivan from SoloPep, a spin-out from the University of Limerick which is supported by the Enterprise Ireland Commercialisation Fund, took home the top "One to Watch" award for the development of the world's first suite of disposable airway-clearance devices for patients with respiratory conditions such as cystic fibrosis, chronic obstructive pulmonary disease and bronchiectasis.
Other finalists included a potentially life-saving wayfinding system developed by a firefighter who was inspired by Hansel and Gretel; a wound-closure device which combines the advantages of skin stapling with suturing; and a novel cyclonic method of mixing air and water to potentially halve the amount of electricity used in recycling trillions of litres of wastewater every day.
Now in its 11th year, Big Ideas demonstrates the commercialisation potential of Irish academic research by giving third-level spins-outs an opportunity to promote their innovations and business propositions to an invited audience made up of the Irish research and investment communities.
All of the companies had received support from Enterprise Ireland. "Our team of commercialisation specialists help researchers with idea feasibility, customer and prototype validation and accelerating the process of business start-up and growth," says Enterprise Ireland senior ICT commercialisation specialist Kevin Burke. "Big Ideas provides an opportunity for the 12 finalists to showcase what they are doing to potential investors and partners. It is also an opportunity for entrepreneurs and investors to get a look at the interesting projects which are emerging from the third-level sector. Many of the innovations pitched at Big Ideas will go on to increase the competitiveness of industry in Ireland and achieve global success."
Enterprise Ireland provides commercialisation support to between 40 and 45 third-level spin-outs each year and selecting 12 for the Big Ideas event is a difficult process. “It can be quite tough to narrow down to 12,” says Burke. “We look for a number of things. We look at technical progress, how far along the road they are in developing prototypes and so on, what they are doing in getting feedback from the market on the viability of their product or service.”
Progress along the funding pathway is another factor. “When the project teams finish with State funding, they have to identify sources of follow-on finance to further develop the product and commercialise it,” Burke says. “The next stage of funding generally comes from equity investors. This requires a slightly different mindset on the part of the project team. They are moving from commercialisation to investment readiness and can require a different skill set as well. We try to add as much value as possible during the commercialisation funding stage and ensure that the technology or product is sufficiently de-risked so that investors don’t stand off for a further year or two.”
Revenue road map
A revenue road map is also required for companies to successfully attract investment. “It take a certain amount of time for companies to start generating revenue, it can be very long in sectors like life sciences and shorter in others. The teams need to be cognisant of where subsequent and follow-on investors will come from and they have to look forward to the technical and commercial milestones that will attract them. The last thing you want is to have a company run out of money.”
Some of the finalists are already fundraising while others are still a few months away from that stage. “The switch has tripped with all of the 12 finalists and they are on the spin-out trajectory,” Burke adds. “They are considering all the things they need to do to minimise the time between finishing commercialisation funding and raising finance from the market.
“They can’t afford to have too long a hiatus. If they do, the team might not be able to stay together long enough to get the project to market. Some will look for seed capital from venture-capital funders off the blocks while others will look for angel funding from HBAN or one of the other syndicates or from high net worth individual investors. There is a combination of investors in play and the companies will decide on what sources of investment they need right now.”
For companies which might not be quite at the stage of raising investment funding, Enterprise Ireland's Business Partners Programme matches commercially experienced entrepreneurs with researchers and scientists to help them examine potential routes and options to spin out a scalable, high-growth company.
“Our experience shows that spin-out teams with a complementary blend of technical and commercial skills, experience and perspectives have a better chance of securing equity and non-equity finance, acquiring early-adopter customers, strategic partners, talented additional hires, and so on,” says Burke.