SETsquared is a collaboration between the universities of Bath, Bristol, Exeter, Southampton and Surrey which supports the growth and success of new business opportunities through spin-outs, licensing and incubation. They accelerate the development of technology-based ventures from initial idea to commercialisation through direct links to entrepreneurs, investors, business professionals and academics. They have supported over 650 companies, helping raise £750m in funding and creating over 1000 jobs.
Nick Sturge is the Director of the Bristol Business Acceleration Centre, which provides business support for high-tech ventures. I spoke to him about his organisation and how high-tech start ups can get the support they need.
Hi Nick, can you tell us what the Business Acceleration Centre does?
The Business Acceleration Centre is designed to accelerate high-tech ventures with the potential for high growth. We offer a range of support services to these ventures including coaching, mentoring, workshops, events, flexible office space and access to our range of contacts including investors and business experts. The aim is to provide broad, flexible support to get businesses up and running. We take high-tech ventures with potential for high-growth (projections over £10m) that need to add value.
How many companies do you support?
We currently have 57 companies at the Bristol Centre, representing a variety of different sectors.
How has the picture changed since you started working at the centre?
I started at SETsquared as a Mentor in 2005, becoming the Entrepreneur in Residence and then Centre Director in 2006.
We have around twice the number of companies on our books today compared to 2006 and around six times the number of applicants per month. The thing that has really changed is the extent of our support network: we have a much better relationship with investors and business professionals now. This is very important as we often rely on pro bono input from experts. We have invested time and effort into the support network and work closely with partner organisations like the Watershed’s Pervasive Media Studio and the Local Enterprise Partnership. A joined up approach means the start ups are far more likely to succeed.
How does the application process work?
The application process is fairly straightforward and culminates in a short interview where we ask three key questions:
How did you get to where you are?
What is the product or service and at what stage is it?
Where do you want to go?
We take ventures on at a very early stage of their development. The advantage of this is that we are far more capable of ‘taking a punt’ on a product or idea. We still have to judge the market carefully and predict the venture being successful. We don’t care where an idea has come from: we actually get more ventures from the general public than we do from academic researchers. Around 40% of applications are successful. The level of support a venture needs varies considerably. While some companies will need a physical office space and intensive support, others will need their support to be more ad-hoc. The incubation period for businesses at the centre can be between six months and five years.
How do you help the companies get financial backing?
One of the biggest obstacles for the high-tech startups is formulating a good funding strategy. The amount needed will vary: some of the startups will have already been trading in the market and have a revenue stream from their sales, others will only have an idea in their head. Most of the ventures will need investment from Angel Investors, Venture Capital or a Corporate. We have to manage our investor relationships very carefully and adapt to the market, we understand how to pitch the right venture to the right investor in order to maximise the chance of investment. The actual level of investment has declined due to the difficult economic climate, we had total investments of £23m in 2008, but that dropped to £9m last year. However, it should be pointed out that very good ideas are still getting the backing they deserve.
What particular technologies are you seeing at the Centre?
The big thing at the moment is cloud computing. We have a number of companies that are improving the infrastructure and software of cloud computing. Brightpearl provides cloud computing retail software for small businesses. We provided mentoring, business planning and access to investments and the company is now a great success. A common criticism of cloud computing is the issue of reliability, so I am also excited about Hybrid Logic, who are developing a ‘failsafe’ web platform.
We are also seeing a lot of advances in green technology, especially in smart home technology and energy saving. Some of these developments are not particularly complex, but are providing simple products with wide-ranging applications
What are some of your best success stories?
Some of the great success stories for the Bristol Business Acceleration Centre are: Brightpearl, the cloud software company; mybuilder.com, which connects customers and tradesmen online; Tidal Generation Limited, a renewable energy company now owned by Rolls Royce and DocCom, a secure online network for healthcare professionals.