Newsletter Spring 2012
Oxford Innovation Presents at Investment Consultation Event with the Prime Minister OION Ltd, with many of its members, supporters and companies were well represented at No. 10 to see Don McLaverty, joint managing director of the Innovation Services division at Oxford Innovation, present at an investment consultation event held by Prime Minister, David Cameron, at No. 10 Downing Street on Friday 10th February 2012. Discussion included issues affecting the angel investment sector and improvements to the conditions for new enterprise in the UK. Don McLaverty spoke about how angels, their networks and syndicates will play a key role in the new national Business Coaching for Growth programme to be officially launched May 2012.
The programme’s simple principle is the provision of services that enables high growth potential businesses to reach higher and further. The bespoke services include:
Network Manager’s Roundup
Intelligent Fingerprinting closes £2m investment
It has been a really busy start to 2012 as you will gather from the newsletter content. We have the OION Dinner coming up on 18th April at Wadham College Oxford and are exceptionally pleased that George Coelho will be this year’s Guest Speaker.
13th March 2012: Drug-testing firm wins £2m investment: Intelligent Fingerprinting who has developed a unique technology for the simultaneous detection of personal identity and contact with illicit substances from fingerprints has just raised £2m in funding from a consortium of private US-based investors. Intelligent Fingerprinting presented at the November 2011 OION investment.
For a second year OION has been asked to help the Said Business School to find companies for the Venture Capital Investment Competition (VCIC) that has evolved into a training ground for future venture capitalists. Toximet agreed to be one of 3 companies and out of the 6 semi-finalist teams, 4 chose ToxiMet to make an offer (a team could only chose one company). I was at the final of the Tata Idea Idol event and saw MedoPad present. Well done to them. Finally, with the OION Dinner, two workshops and the investment meetings coming up, I hope to catch up with some of you over the next few months in person. Eileen Modral
• Tailored assistance from one or more coaching experts in different business development fields
• Access to financial coaching including introductions to funding sources
• Innovate or fail – covering product development, intellectual property, sales and marketing
• Generic business workshops on a variety of topics • Networking, both at local and specialist level Participating companies will only be expected to contribute towards costs, and the amount of the contribution is determined by company size and the scale of the final growth programme. Full details and can be found on the Business Coach for Growth Website: www.businessgrowth.uk.com/contact-us
The deal follows the announcement of the company’s prototype fingerprint drug-testing device and will allow the product to be marketed worldwide. Intelligent Fingerprinting Ltd. is a spin-out company from the University of East Anglia (UEA) and was developed within UEA’s School of Chemistry under the guidance of Intelligent Fingerprinting founder, Professor David Russell. www.intelligentfingerprinting.com
Oxford Investment Opportunity Network is a trading name of the Oxford Investment Opportunity Network Ltd, Company Reg No:7719853 Contact details: Eileen Modral, firstname.lastname@example.org T: 01865 261499
Company News & Updates
heelright was awarded a £250k grant from the TSB to support us during our 2012 trial and development programme. Two systems to be install end February at full scale trial sites for 3 to 6 month trials. Another two trials will start in spring. The Begbroke Science Park demonstrator site has been working all winter and is showing robust and accurate results in a wide range of weather conditions.
eal Status are well on their way to achieving £600k and will be closing shortly. Commercially are moving as expected, with new partners, ONI and Atos Consulting place orders this year for their first customers along with their existing partner, Intergence, placing additional orders. New partners, Tarca and SciSys have come on board in the UK, and they have their first US partner, Nexvu. They’ve also signed a formal Technology Alliance Partnership with the security software company, Sourcefire, and Royce attended their recent worldwide sales meeting in the US introducing Hyperglance to over 250 sales and technical pre-sales.
Page 2 January 2012 Meeting Was looking for final £100k of an £800k round. Now has offers for the full amount of funding required so we are all set to close. Genetic Microdevices are currently in DD and talking terms with potential investors. They hope to close in a couple of months so please contact if interested. Were one of the finalists at the Oxford Entrepreneur event Tata Idea Idol event on 7 March ’12. Won the Henman prize on the night.
Time for Medicine have been busy since presenting at OION with further pitches at other networks including an event in Cardiff Town Hall the end of February.
Current Opportunities Company A developed a Vision Screener to replace a 120 year old manual examination, using principles from technology whereby squints are detected digitally, in realtime with a handheld smartphone device to de-skill and automate clinical examination around the world. The technology has the capacity to create a paradigm shift, on a global basis in how toddlers and infants are examined and treated for this important eye condition. Seeking £500k for completion of R & D and initial clinical trials. Update: Planning to conclude fundraising in April. Business going well with first working version of product available
supports investment (mid 2013). 2012 income is forecast at £146K with a gross margin of 70%.
Company D is a UK start-up with a fully-functional advanced LED driver technology and product family, addressing the outstanding driver requirements of the commercial and industrial LED lighting markets. The novel LED driver product family (patent pending) has completed the main development programme and has already received interest from two US-based LED lighting companies. Raising £315k. Update: Company is now in negotiations with a US customer for a potential license agreement for N.America that includes upfront Company B is a mobile service which allow travellers to payment and min. annual royalties. Now in talks and DD remain connected globally, while avoiding exorbitant with potential investors for part of this round. roaming charges. About to launch a global product (own branded SIM), developing travel app and franchising Company E have developed a unique software solution service to retail outlets in airports and car rental suite that integrates seamlessly with a business’s IT companies and enhancing the travel experience with a systems; not only allowing remote management and mobile app which serves as a one-stop shop for local problem solving for the device and its user, but also gathers analytics. The software already controls in offers and information. Raising £650k excess of 25,000 mobile devices at end customers Company C develops and commercialises nanofibre including Easyjet, US Department of State, scaffolds that support the growth of cells in 3D. Uniquely Nottinghamshire Healthcare, T Mobile and Honeywell to in Europe designs and manufactures high quality products name a few. The company now seeks venture funding of from biocompatible polymers for use in regenerative up to £2m to support rapid sales growth and leverage the medicine, stem cell therapeutics and drug discovery. The company’s early success. Revenues are expected to be company is developing microplates for oncology drug £2.37 million in 2012, growing to £10.32 million in 2014, discovery where more predictive in vitro 3D cell-based when the company expects to exit via trade sale. assays could reduce the rate of expensive clinical failures Update: Psion just launched their global Managed (95%) and replace certain animal studies. The company Service based on the companies software solution now seeks £150K to fund operations until income mprodigy which is creating interest globally. Oxford Investment Opportunity Network is a trading name of The Oxfordshire Investment Opportunity Network Ltd Company Reg No: 2950884 Contact details: Eileen Modral, email@example.com T: 01865 261499
yrris presented in Nov ‘06 and raised funding in ‘07. At this time Syrris had 4 product ranges and were raising £600k of which £300k was committed. They additionally won a £2m grant from the then DTi to invest in a Microfluidics fabrication facility. 2008 saw the launch of Reactor Master with an order value increase of nearly 2.5 times. 2011 saw the launch of Globe a new jacketed reactor platform that saves time, money and space and Asia, the most advanced flow chemistry system ever developed . Further funds will be sought in 2012 to launch CE Marked products for use in the hospital microbiology laboratory. (As of Dec’10 Turnover £4.73)
Looking back on 2006-07
2O Water presented at OION in Mar 2007 raising funding that included OION members. Founded in 2005 by
Adam Kingdon and Andrew Burrows the company set out to develop highly innovative technology for reducing leakage on water distribution systems. Initial trials carried out in 2007 and 2008 with Severn Trent went even better than expected, with leakage savings of 26%, leading to the first commercial systems installation at the end of 2008.
The company has since supplied its technology to 20 utilities in six different countries. Average leakage savings are running at over 20%, and 64,000 to 180,000 litres of drinking water per system per day depending on the country. In 2009, i2O received investment of £4.2m from a consortium of investors led by Swarraton Partners to fund international expansion. In December 2010 i2O successfully completed a £10m fundraising round, enabling it to accelerate its international growth. The new funding, enabled the company to further roll out its pioneering new technology to tackle the worldwide problem of water leakage. (As of Dec’10 Turnover £1.06m)
rue Knowledge was initially financed by the founder, William Tunstall-Pedoe with other private investors including OION members after presenting at the January 2007 meeting. The company subsequently received venture finance from Octopus Ventures.
Based on research the founder began in 1998 William has more than twenty-five years experience of both developing and commercially exploiting software products in Artificial Intelligence. In addition to inventing the technology base for True Knowledge, William is credited with being the first person to develop software that can solve and explain cryptic crossword clues. He also developed Anagram Genius – software product used by ~5million people and which generated the anagrams that appear in the bestselling Da Vinci Code book and movie. Check out Evi, the new app from True Knowledge. (As of March ‘11 Current Assets £0.68m)
ichelson Diagnostic detail was sent out to members in August 2007the company was
backed by funds from the Management Team and consortium of investors, including London Seed Capital Ltd, Catapult Venture Managers Ltd, and business angels including OION members.
July 2009 saw the launch of VivoSight OCT scanner and in November 2011 an investment of £1.9million by shareholders that included Octopus Investments and Catapult Venture Managers was completed. These funds will be used to expand sales & support infrastructure in USA and Europe to respond to growing demand for Michelson’s revolutionary laser scanning technology, which can image skin and other surface tissue at a much higher resolution than ever before. (As of March ‘11 Current Assets £2.04m)
rganox first presented at the joined OION-Isis meeting in October 2007 and was then formed as a spin-out from the University of Oxford in April 2008.
Funding of £1.5m was secured in December 2008 from Oxford Technology Management, Technikos LLP and the University of Oxford Challenge Seed Fund. This round included OION members and the CoInvestment programme formed between OION Ltd and Bank of Scotland.
A £2.75m Series B investment round completed in January 2011, supported both by existing and new shareholders including the Royal Society. The OrganOx machine will help livers remain healthy during transportation from donor to the operating table. Known as METRA, the machine was originally used on pig livers. A recent trial found that out of 13 human livers discarded by doctors, six would have been good enough to be transplanted. Further trials involving patients are set to be approved later this year. (As of April ‘11 Turnover £2.5m)
Dates for your diary Investor Workshop 12.15pm, 26 March 2012 Oxford Business Park OION Annual Dinner 7pm, 18 April 2012 Wadham College, Oxford Investor Workshop Tbc April 2012 Harwell Oxford Investment Meeting 4.30pm, 15 May 2012 Said Business School
Oxford Investment Opportunity Network is a trading name of The Oxfordshire Investment Opportunity Network Ltd Company Reg No: 2950884 Contact details: Eileen Modral, firstname.lastname@example.org T: 01865 261499
SEED ENTERPRISE INVESTMENT SCHEME The Seed Enterprise Investment Scheme (SEIS), introduced in the Finance Bill 2012, will make available tax relief to investors who subscribe for shares in early stage companies carrying on (or preparing to carry on) a new business in a qualifying trade. SEIS will apply to shares issued on or after 6 April 2012, but before 6 April 2017. The main requirements are similar to that of the EIS and the following is a brief summary of the key elements of the scheme: The company The qualifying company must: • have been incorporated no more than 2 years to the relevant shares being issued • be unquoted • have a permanent establishment in the UK • be independent and not control any other company • not be a member of a partnership • have fewer than 25 full-time employees [EIS: 250 employees] • have gross assets of less than £200,000 [EIS: £15m immediately before investment] • not have raised any EIS or VCT investment previously • be carrying on the new qualifying trade (or undertaking preparatory work) Qualifying investment • issue
The shares must be held for 3 years from the date of
PATENT BOX The Government has published draft legislation for its Finance Bill 2012. The proposals include a new tax scheme intended to reduce corporation tax for profits arising from patents, dubbed the “Patent Box”. The aim of a Patent Box is to “to encourage companies to locate the high-value jobs associated with the development, manufacture and exploitation of patents in the UK, and maintain the UK’s position as a world leader in patented technologies”. It is proposed that intellectual property (‘IP’) qualifying for the Patent Box will include:
• Companies can raise a maximum of £150,000 in total (not annual) through SEIS [EIS annual investment limit: £10m] • The money raised must be spent with three years on the qualifying business activity • Companies will be able to raise EIS and VCT monies after a SEIS funding round, but only once 75% of any SEIS monies have been spent The investor • The maximum investment per tax year per investor is £100,000 [EIS: £1m] • The investor must not be an employee of the company (unless they are also a director) • The investor must not have more than a 30% interest in the company Tax relief • Income tax relief of 50% [EIS: 20%] is available on the amount invested (with an annual investment limit of £100,000) • The first year CGT holiday – gains realised on the disposal of assets in 2012/13 which are re-reinvested in the same year under the SEIS scheme will be completely exempt from CGT • Gains arising on shares on which SEIS relief has been claimed are exempt from CGT Laytons were invited to contribute to discussions on issues affecting the angel investment sector at a meeting chaired by the Prime Minister and Lord Young on 10 February 2011. For further information contact: John.Egan@Laytons.com
• UK patents, • Patents granted by the European Patent Office, • Certain other IP rights which are treated in the same way as patents under UK legislation, and • Patents granted by certain other EU member states; the Government will compile a list of qualifying EU member states whose patent regimes are comparable to the UK. Income arising from the exploitation of patents will be taxed at a reduced rate of 10%. Over the 20 year life of a patent, the cost of obtaining and maintaining a patent can be more than offset by the tax saving.
UK businesses will be eligible for the lower tax rate regardless of how they use their patents. In some circumstances, income from sales outside the UK can take advantage of Patent Box. It is the ideal time to consider your company’s intellectual property and, in particular, future patent applications in view of the proposed future tax savings under the Patent Box. To discuss how you could take advantage of this opportunity please contact Daniel Talbot Ponsonby, Partner, (01865) 397900 or email@example.com. For further information contact: DTalbot-Ponsonby@marks-clerk.com
Oxford Investment Opportunity Network is a trading name of The Oxfordshire Investment Opportunity Network Ltd Company Reg No: 2950884 Contact details: Eileen Modral, firstname.lastname@example.org T: 01865 261499
Sponsors Page continued... De-risking the Early Stage Investment Did the early stage investment landscape take another step forward on March 6th ? On that day, at Harwell Oxford, seven universities, 30 companies and several Entrepreneurs met at a Technology Innovation day, co-hosted by the UK Innovation Forum and the Electronic Sensors and Photonics KTN. The aim ? To match the most exciting early stage technologies from the best of UK academia, with the right early stage management and trial customers, creating exciting investment opportunities for the early stage angel.
The morning was spent with academics pitching their relevant areas of expertise, interspersed with industry pitching the unmet needs they have in the sector. In the afternoon a series of “speed dating” networking took place. The pace was vibrant and energetic, with a real feeling that we
Is it a formula that is likely to succeed? The Intellectual Property Office thinks so, awarding first prize to STFC in this year’s national Fast Forward competition, as they feel that this is a model that should be rolled out nationally.
were in the gestation ground of tomorrow’s companies to watch.
Ian Tracey email@example.com
The pump priming customers have stated their unmet need , the scientists are tweaking the product, the entrepreneur is working on the business model, and we have to wait till they come for financing. This is what makes the early stage exciting and enthralling. OION is ready to finance the most promising new companies, Harwell Oxford is ready to help generate them.
OION Ltd Company Report This is part 2 of Hugo Lewis’ dissertation, based on information provided by OION of 220 companies that presented between January 2005 and July 2010: Part 1 focused on the scale of the OION investments. Part 2 is the abridged detail on the spatial pattern of investment. The average success rate for a company presenting to investors is 25.5% (success is completing a deal). Both of the proximity measures show that there is no significant deviation from this success rate by any of the groups (local, mid range and long distance). In summary, the data shows a spatially uneven pattern of demand. This is manifested across regions (53.2% of demand came from London and the South East) and by proximity (less than 20% came from long distance companies). The data shows a similarly uneven pattern of investment. 52.1% of investment went to the London and the South East and just over 20% went to long distance companies.
OION would like to acknowledge and thank:
Oxford Investment Opportunity Network is a trading name of The Oxford Investment Opportunity Network Ltd Company Reg No: Contact details: Eileen Modral, firstname.lastname@example.org T: 01865 261499