Innovation Network Funding:Bill Corr, Innovations Specialist

Innovation Network Funding:Bill Corr, Innovations Specialist

Innovation Network Funding:Bill Corr, Innovations Specialist

Innovation Network Funding:Bill Corr, Innovations Specialist

Innovation Network Funding: State Aid.

Innovation Network Funding: Tax Regimes.

Innovation Network Funding:

Innovation Network Funding: Equity

Where else can you find sources of grants, loans, allowances, equity and support?• Local council – Check your local government website. For instance West of Scotland Loan

Fund - http://www.wslf.co.uk/• Business Gateway - www.bgateway.com • NESTA - www.nesta.org.uk• Youth Business Scotland (ex-PSYBT) – www.psybt.org.uk• R&D Tax credits – www.hmrc.gov.uk• LINC Scotland – www.lincscot.co.uk• Universities – SEEKIT projects, such as The Encompass program.

• Carbon Trust - http://www.carbontrust.co.uk• Technology Strategy board - http://www.innovateuk.org/• Scottish Funding council – Innovation Voucher scheme. - http://www.sfc.ac.uk• https://fundmap.co.uk/ektn/ - website which highlights UK and EU grant funds.

• …..and many more!

SMART:Scotland grant; provides discretionary grants to SMEs based in Scotland. The grant helps you undertake technical feasibility studies and research and development (R&D) projects must represent a significant technological advance for the UK sector or industry concerned and have a commercial endpoint.

• SMART Feasibility: - This covers early stage proof of concept R&D, that enables informed

decisions on the technical feasibility of a new product or process. - We can support up to 75 percent of the eligible project costs. - Projects must last between 6 and 18 months, and the maximum grant is

£100,000. One third of the grant is paid upfront when the project starts.

• SMART R&D:- This covers projects that aim to develop a pre-production prototype of a new

product or process.- The maximum grant is £600,000. - Support is available at up to 35 percent of the eligible project costs.

R&D Grant – Primary aim of the grant is to increase levels of R&D spend in Scotland. Any size of enterprise may receive funding for research and development, even if the innovation is new only to your business. The product need not be innovative within a national context.

• The project has to fit within the EU definition of Industrial Research or Industrial Development.

• There has to be a degree of technical risk or challenge although it does not have to be as significant as SMART: Scotland projects where projects must represent a significant technological advance for the UK sector or industry concerned.

• Strategic to the company.

• Must be of commercial benefit.

• Represent significant innovation to the company.

• Increase R&D capability within the company.

• Create or Safeguard R&D jobs.

R&D Grant eligible costs, intervention rates and Process.

Eligible costs (typical) – • Internal salaries (capped at £45k gross), Consultants, Materials, IP costs, Trials

and Testing, and some general business overheads.

Non- eligible costs(typical) - • Capital costs, (Depreciation costs may be considered). Directors dividends, Vat,

Micro/Small companies

<10 or <50 staff and <2m or 10m Euro turnover.

Medium companies –

<250 staff and <50m Euro turnover

Large companies –

>250 staff and >50m Euro.

Grant =< £99k Up to 45% Up to 35% Up to 25%

Grant >= £100k Up to 35% Up to 35% Up to 25%

The Process;

• Highlight the project possibility to your SE Account manager or Business Gateway adviser or visit http://www.scottish-enterprise.com/

• An Innovation Specialist may be appointed to work with the company to scope the project and help review or prepare the application.

• For grants likely to be greater than £100k a Due Diligence contractor will be appointed to review project proposal, this will take more time so please allow for this.

Innovation Support Grant – Where a project does not fit within the terms of R&D it may be considered for Innovation support. The main aim is to help companies develop and commercialise a product, process or service to include;

• Market research or Market launch activities.

• Technical developments which are;

More iterative in nature, enhancements or non-significant, less technically challenging.

• Eligible costs – Similar to that of R&D Grant, although no overheads.

• Intervention rates ;

For all eligible companies, up to 50% of Internal and External costs up to a maximum grant of £50k.

Scottish Investment Bank Seed Fund

Funding between £20,000 - £250,000

• Scottish Enterprise introduced the Scottish Seed Fund (SSF) to improve the availability of finance for start-up and young growing companies in Scotland. The SSF can invest between £20,000 and £100,000 on an equity basis in early stage businesses that meet the SSF criteria and are keen to grow.  Priority will be given to businesses demonstrating high-growth potential in terms of launching new products, entering new markets and increasing employment.

• The SSF will invest in start-ups and early stage companies at the end phase of product development and/or commercialisation. When deciding whether to invest, detailed due diligence will be carried out by Scottish Enterprise.  In addition, the following will be taking into consideration:

• the nature, age and stage of the business;

• management skills;

• potential for innovation and growth;

• availability of other funding; and

• how the funding will be used.

Key rules and eligibility

• In order to be eligible for investment from the SIB Seed Fund your company must:

• demonstrate it has explored other funding sources;

• secure at least one external equity investor, for example, a business angel;

• match at least 50 per cent of its financing requirements via private sector sources.

• This could include: • money from a bank, venture capital firm or business angel; or • further investment by the existing owners of the company or new investors,

but not: • SMART/SPUR awards; • Regional Selective Assistance grants; and • capitalisation of existing stakeholder loans.

• Must also be an incorporated company, predominantly located in Scotland and an SME. (See EU definition).

Scottish Co-investment Fund

Funding from £100,000 - £1 million

• The Scottish Co-investment Fund (SCF) is a £72 million equity investment fund set up by Scottish Enterprise, and partly financed by the European Regional Development Fund (ERDF), to invest £100,000 to £1 million in business deals of up to £2 million.

• The SCF does not find and negotiate investment deals on its own; instead it forms contractual partnerships with its private sector partners (SCF Partners). The SCF Partner finds the investment opportunity and offers to invest its own equity cash. If the opportunity needs more money than the SCF Partner can provide, it can call on the SCF to co-invest.  

• If you are a company looking for investment, you must first secure funding from one of our SCF partners.

• http://www.scottish-enterprise.com/se2008-scif-search

Key rules and eligibility

• The SCF investment in a company must not exceed £1 million in one tranche or in multiple rounds.

• The total deal size should not exceed £2 million (this will include any debt component).

• The investment must be at least matched pound for pound by the SCF partner.

• The terms obtained must be pari-passu with the SCF partner.

• Scottish Enterprise cannot hold in aggregate more than 29.9 per cent of the voting rights of a company.

• Public money cannot account for more than 50 per cent of the total risk capital funding in a deal.

• Must also be an incorporated company, predominantly located in Scotland and an SME. (See EU definition).

Scottish Venture Fund

Funding from £500,000 - £2 million

• The Scottish Venture Fund (SVF) has been set up by Scottish Enterprise in conjunction with the Scottish Government to invest £500,000 to £2 million in company finance deals of between £2 million and £10 million.

• The SVF can only consider investment opportunities brought to the SVF by one of its private sector partners. If you are a company looking for investment through the SVF and do not currently have any investors, please contact one of our SVF Partners in the first instance.

• http://www.scottish-enterprise.com/svfpartners

The process• Generally, the SVF will only invest when:

• at least 50 per cent of the aggregate investment derives from sources other than the public sector;  

• the percentage of voting rights in the investee company available to Scottish Enterprise, as a result of the investment, is less than or equal to 29.9 per cent; and

• the investment will benefit and make a positive contribution to the Scottish economy and where there are no trade displacement or regulatory issues.

• While deals will normally involve venture capital funding, the SVF will consider other types of company finance requirements. The SVF will typically invest through equity instruments but will also invest through mezzanine or debt instruments, provided that the commercial terms are on a matching basis with its partner.

• All three funds are external led equity finance and will potentially support company expansions, buy-ins and turnarounds depending of the equity partner chosen. In the first instance companies should contact their Scottish Enterprise or Business Gateway Advisor.

Where else can you find sources of grants, loans, allowances, equity and support?• Local council – Check your local government website. For instance West of

Scotland Loan Fund - http://www.wslf.co.uk/• Business Gateway - www.bgateway.com • NESTA - www.nesta.org.uk• Youth Business Scotland (ex-PSYBT) – www.psybt.org.uk• R&D Tax credits – www.hmrc.gov.uk• LINC Scotland – www.lincscot.co.uk• Universities – SEEKIT projects, such as The Encompass program.

• Carbon Trust - http://www.carbontrust.co.uk• Technology Strategy board - http://www.innovateuk.org/• Scottish Funding council – Innovation Voucher scheme. - http://www.sfc.ac.uk• https://fundmap.co.uk/ektn/ - website which highlights UK and EU grant funds.

• …..and many more!