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 number of research centres and universities have recently established seed capital funds to bridge the gap between research and the commercialisation of products and processes based upon it. The funds, usually set up in partnership with financial institutions or other centres, have helped to create spin-off companies, to reduce time-to-market, and to promote an entrepreneurial culture. In March, the Innovation programme and the European Commission's Joint Research Centre (JRC) invited fund managers and representatives of public research centres to participate in an exchange of information on best practices in this field, designed to inform policy development.
Funds appear to be most successful when they form part of a coherent set of schemes - entrepreneurs need access to training and mentorship, as well as to money. The fund should not be the only financing option available, and should itself be flexible enough to make quite small 'top-up' investments, in order to lever in funds from outside investors.
The Technology Transfer Fund will speed the exploitation of JRC research results. |
Analysis...Action! In 1999, the JRC will establish a special fund to help technology-oriented entrepreneurs to attract suitable equity backing. Operated independently by a professional fund manager, under contract to the JRC, the Technology Transfer Fund (TTF) will serve to accelerate the commercialisation of JRC research results. The fund is being developed in parallel with the Innovation programme's I-TEC scheme (1) and innovation finance helpdesk, LIFT - also to be launched early in 1999. It forms part of the European Technology Transfer Initiative (ETTI) (2), which also includes a scheme to give companies access to JRC facilities, a European technology transfer network employing advanced information and communication technologies, a business incubator for start-up companies based on JRC research results, and entrepreneurship training for JRC scientists.
Market Opportunity The JRC plans to select a management company by the end of 1998, which will then start to raise funds on the market. "At least 50% of the fund's investments will be devoted to projects based on JRC results," explains Freddy Dezeure, who is co-ordinating the initiative. "It will be given preferential access to JRC research results, with three months to evaluate a project before it is offered to other investors. We expect it to play an active role in the search for investment opportunities and in the development of the companies concerned, bringing in outside management expertise where this is needed. For the right fund manager, this will be a great opportunity.
"It will also allow the JRC to test new approaches to seed capital funding, as the basis for the definition and spread of best practice in support of European Union innovation policies."
(1) See most recently edition 3/98.
(2) See edition 3/98.
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