Founded in a hot bed of fresh thinking and unique ideas, university spin-outs are becoming increasingly popular with both savvy investors, who can achieve a healthy return, and universities benefiting from funding channelled back into their R&D and facilities.
Working with eight Midlands’ universities, Mercia Fund Management (MFM) has supported spin-outs from seed to successful exit through investment, sourcing the right people to manage the funded company and providing strategic input. This article on Keele University is the third in a series that profile successful university spin-outs.
Keele University has its own technology transfer team and MFM has worked with the university for six years by providing seed and early stage capital to support spin-out businesses.
We asked two Keele University spin-out companies about their development, the benefits of working with an external venture capital fund and their top tips for companies seeking funding.
nanoTherics
Founded in 2007, nanoTherics develops and commercialises innovative magnetic nanoparticle-based products for the life-science sector.
The company came into existence using intellectual property from the universities of Florida and Keele, has been granted patents relating to gene delivery and generated over 60 system sales across three continents.
nanoTherics is based in the Keele University Science and Business Park where it benefits from direct access to industry leading researchers who are directly involved in the company’s field as well as specialist equipment and resources.
Introduced via the technology transfer team, nanoTherics and MFM started to work together as MFM has a strong track record in supporting and growing life-sciences businesses from an early stage.
Carl Jones, CEO of nanoTherics, said of the MFM team: “They are an active and responsive investor, with a strong reputation for supporting young businesses and pulling together investment rounds.”
nanoTherics also benefits from access to MFM’s incubator space at Forward House for seminars, management meetings and board meetings, and critically MFM’s support services such as management accounts and executive search.
Two key pieces of advice from nanoTherics’ CEO, Carl Jones, for other spin-outs are:
“Choose your VC partner carefully and opt for a supportive, knowledgeable and adaptive team.
Invest time in the planning process and ensure you have access to all the correct skills and resources required.”
Intelligent Orthopaedics
Intelligent Orthopaedics designs, develops and manufactures orthopaedic trauma devices for leg fracture treatment.
The company was founded in 2002 as a joint spin-out from Keele University, Staffordshire University and the University Hospital of North Staffordshire.
Major achievements include gaining a coveted FDA (510k) clearance to market of its products in the US and establishing a network of advocates (surgeons) in three out of the four key markets for orthopaedic trauma spending.
By maintaining close ties with the university, Intelligent Orthopaedics benefits from access to high-cost design and engineering equipment, as well as academic/clinical facilities for training events.
Attracted by MFM’s reputation for supporting early-stage and often pre-revenue businesses as they mature, Intelligent Orthopaedics has benefited from new investors introduced by MFM. Additionally, the medical technology company has gained new board members, including a new Chairman who offers the necessary skills to grow the company.
Key advice from Susan Hartman, CEO of Intelligent Orthopaedics, for other spin-outs is:
“Most things are likely to be tougher than you initially expected, but the history of many successful companies with game-changing ideas shows that it takes time, commitment and determination to become established.
The world is changing quite rapidly so do not assume that established business models adopted by companies in the past will still be relevant. Do not be afraid to test out different models and approaches.”