It’s not uncommon among SMEs to view the process of applying for grant funding as a drain on resources, or even a diversion from a company’s business plan.
However, as the CEO of a fast-growing technology SME, I believe we actually owe our pace of growth not only to the funding we’ve secured, but also to the rigour of that funding process.
I am convinced that the journey taken to secure grant funding, although time consuming, is good for the business. In my experience, I’ve found that it sharpens the offer and allows innovation to develop into product reality.
The innovation in our case started life with our chief scientific officer Professor David Russell, who founded our company based on his research into the detection of drugs and drug metabolites in fingerprints.
Today, we have a product nearing commercial launch, a handheld fingerprint-based drug screening device. Requiring only a single fingerprint sample to screen for commonly abused groups of drugs, the product is a compact and portable device that provides drug test results in less than ten minutes.
The grant application process
Before we reached the current stage, however, we went through the experience of applying for and being successful at gaining grant funding on three occasions.
The most recent was a sizeable grant from the EUREKA Eurostars Programme, which is administered in the UK by the government-backed innovation agency, Innovate UK (the new name for the Technology Strategy Board).
EUREKA subjects each application to a structured and rigorous assessment, and although the process of securing the grant was close to being arduous, that particular funding injection allowed our technology to be adapted and trialled in an Anglo-Finnish opioid drug rehabilitation study.
Every business will have different experiences of the funding process, but the reality is that grant funding is not ‘easy’ to get and nor should it be.
Graham Mobbs, European operations manager at Innovate UK has been quoted as saying that as a bare minimum, bidders need to demonstrate that there is clear market potential for their innovation and that they have investors willing to match funds. Graham has also said that later stage applications, development of prototype, feasibility studies, collaborative R&D, etc, have more rigorous assessment criteria in order to ensure that grant monies will be well used, on a project with excellent prospects for success and a clear exploitation route.
My understanding is that often, even where companies are unsuccessful in their applications, the application process was beneficial in that it forced the company to examine its fundamental assumptions and to take a look at the marketplace and their company’s ability to meet market challenges.
In addition, because the application process is robust, it’s also seen as a good benchmark for private investors who look favourably on an SME that is backed by the UK’s innovation agency or European funding. This has certainly been the case with our company.
The Eurostars win and earlier Innovate UK Biomedical Catalyst awards have constituted a valuable part of our overall funding strategy. Their contribution to our performance over the next two years will go far beyond the initial awards, and this is something we’ve already seen materialise.
A mixture of funding
In January this year, we secured £750,000 in funding from a consortium of private US-based investors, following an earlier investment of £2 million from US backers in 2012, and we expect to secure additional funding from private investors on the back of the Eurostars win.
Overall, a combination of private investors and grant funding has formed a virtuous circle, with each funding event increasing validation of our technology. The effects are highly complementary.
As well as help with accessing finance and investor interest, funding bodies such as the Innovate UK offer tools and programmes to help SMEs access knowledge and skills, and find everything from government contracts to supply chain partners, lead customers and partners.
There are innovation networks, including the Knowledge Transfer Networks and the ‘_connect’ community, with more than 50,000 members where you can find knowledge, advice and potential partners for innovation projects. They also run a series of support events for potential applicants, which I’d highly recommend attending. Often in London, they run pretty much every week and research indicates that attendance significantly enhances bidders’ prospects for success.
In our experience, we found that aside from financial benefits, one of the most positive outcomes from applying for Innovate UK funding is that we got to work with key opinion leaders and gained invaluable advice along the way.
With a portfolio of support and funding products on offer at different stages in businesses’ innovation journeys, Innovate UK is committed to supporting innovation by SMEs with high growth potential. After all, they know that these companies will be a major source of the UK’s future economic growth.
More than half of the companies that work with Innovate UK are SMEs, so it’s not surprising that they’re actively seeking to enhance how they support innovation in such businesses.
Dr Jerry Walker is CEO of Intelligent Fingerprinting.