After the rejection, I had an exchange of emails with the director to see if it was worth trying for another source of funds, their ‘fellowship’. I was told that I needed to know someone in his list of referees, but he refused to reveal even one nearby name who I could approach, to begin validating the work and the connected science. I should have seen a clue in the title.

Eventually having got nowhere in getting the necessary help, I had to effectively reduce my costs, so I left the UK in 2002.

I remain with it and convinced of the power and potential of results that will come, so I struggle on in day jobs. I now also have the added burden of translating it into French to gain funding/recognition. Being English – and knowing how the French react – I am saddened that any future credit for launching the work will probably be claimed by France.

Of course, NESTA is not directly responsible for my challenges (I have a list of institutions, organisations and people that weren’t able to hear), however it was publicly stated at its inception that it was there to avoid the brain-drain. Having listened to the above-mentioned mp3 speech given by a Lord, it saddens me to speculate whether you still need to know someone in the establishment to live and innovate in the UK.

I went to NESTA in the summer – motto ‘making innovation flourish…’ and was told that our thoughts on MyLocalWriter.com, a DIY self-service advertising system called Addiply etc etc was ‘beyond their area of experience and expertise…’

Fortunately, albeit for a different project and strictly of the ‘pilot’ variety – 4iP have ridden to the rescue as ‘backchat’ becomes the first idea to pop out of their back door having gone through the full submissions process; and all in about 4-6 weeks. So, credit where credit is due.

But given, for many of us big and small, time is of the essence right now, pinning your hope on a NESTA, an EEDA, an EEMA, a ScreenEast, a Norfolk Business Link, etc, etc… is fraught with peril.

This money should go into a real SBIR system to fund start ups (in the true sense) with sales.

Points to avoid at all costs;

- matching funds, you raise 100k we give you 100k (if you can do that you dont need their money)

- Research only grants, this money must be available to fund products that can be sold, no restrictions

- Funding dying companies to do a research project (as I like to call it the “fund the MDs new Jag grant”)

- Funding social schemes, they have their place but not here

Things to look for;

- Fund entrepreneurs, not universities IP departments

- Fund the entrepreneurs most likely to succeed, not those that make the best political news stories

If this is done in conjunction with a complete shake up of the useless BusinessLink system, then great also.

I’ve just posted on the the TechLondon blog some more perspective on how policy and support should work in tandem with private capital:

http://techlondon.org/

However, nobody seems to have mentioned that this proposed NESTA investment is a long way from being the main event. A hell of a lot of support for business is out there, and has been for some time. I don’t have a £ figure, but there are something like 3,000 schemes out there for small business. As the result of a policy review started three years ago, these schemes are being centralised and simplified over the next three months, with the objective of making support more effective. Full details here:

http://www.berr.gov.uk/whatwedo/enterprise/simplifyingbusinesssupport/page44805.html

This will be delivered by (yes you guessed it) BusinessLink, and is a fundamental shakeup. Hopefully our industry will finally get some recognition and the specialist support it needs.

also what about web 2.0 graveyard – that must be getting pretty packed!

It is easy to look on small investments as sufficient in the Tech field when there is an incredible infrastructure of support.
Without that support already in place, then frequently cutting corners leads to inefficiencies in execution.
You can invest a small amount in a brilliant team for a great idea and it will still pay off, but more money would certainly bring that about faster.

The Dragon’s Den is an interesting phenomenen because of the wonderful synergies the Dragon’s bring to the businesses they invest in, which is probably more added value than a typical angel or VC arrangement.
On the Dragon’s Den, it is never a case that only 10% of the businesses make money, to compensate for the rest.

An approach to making this workable might be to first invest in the creation of some standardised open source legal docs. These ones available to US startups are designed to be balanced fairly for investors and founders: http://www.ycombinator.com/seriesaa.html

NESTA could then agree to match or provide 2/3 of a first round of investment when an angel agrees to invest on those terms. The angels would do the job of assessing the viability of the start up and none of the investment cash would need to be wasted on admin or legal fees. Later rounds of investment from the same fund would also be far easier and cheaper as all the legal work could be standardised.

Much better for the whole economy would be measures to make it easier for companies to offer employment – e.g. cut in the rate of employers’ National Insurance contributions (currently 12.5%), make it easier for people who are made redundant by increasing the tax free allowance on redundancy payments (currently approx £30k) , or make it easier to buy and sell companies by abolishing stamp duty on share transfers.

I’m also in favour of government backed schemes such as G2i, whose mission is to provide specialist and targetted information and training, or UKTI initiatives to assist companies build export opportunities, as these are not easily replicated in the private sector.

I know capitalism is rapidly going out of fashion right now, but remember one of the three biggest lies is: “I’m from the government and I’m here to help” after “the cheque’s in the post” and “I’ll respect you in the morning”.

*note, I am excluding social purpose start-ups from this, where the public sector clearly has a bigger role to play*

I think a bunch of early-stage companies would be able to develop working prototypes and better understand feasibility with a fraction of this.

Not saying that there aren’t plenty of companies that would benefit from this level of funding, either, but earlier-stage investments are needed, too.

The Nick Mathiason Guardian.co.uk story suggests it is to “Throw a lifeline to technology start-up firms” but I’m trying to get my head around if this is to kickstart the economy or deliver ‘true’ and ‘positive’ innovation for the future. With innovation and creativity come ‘mistakes’ and ‘lessons to learn from’ – the more ideas you back the better the odds of a winner – a quick financial return is less likely – but more lessons will be learned and more possibilities are likely to be generated.

Funding technologies that fuel lifestyle product development and sales is likely to support the economy short-term (and entice the traditional Bank/VC tickbox for investment) but I fail to see how it might solve anything in the long-term.

Funding technologies and startups for positive social change and ‘environmentally’ clean technologies is a more sustainable investment but its less likely to match up to the traditional ‘white colar’ investment vs financial return measurables.

Seedcamp is a fantastic launchpad for Startups but from what I’ve seen even it runs under the traditional financial model of ‘investment vs financial return’.

I suggest that true innovation comes from belief and passion, not financial gain – if you offer a company £500,000 to develop an idea they will flitter it away on wages, overheads and bells and whistles, if you offer the right person £100,000 they will live in tent, make it work, user test it, and prepare it for VC investment.

I simply ask – will investment feasibility be determined by £ or value ?

As Chani says above, it’s worth clarifying that it’s not ‘our fund’ per se rather the suggestion emerged from a report we published last Thursday, called ‘Attacking the Recession’. We also called for the Government to accelerate the connection of the entire country to ultra-fast broadband but that didn’t get picked up as widely.

most of what you suggest has been done for years. It has pretty much all failed. It sounds good, but it doesn’t work. For example, Business Links show no determinable benefit to the business landscape. They cost us in excess of £1bn per year. The vast majority of programs aimed at SMEs that are not start-ups (meaning older companies) has failed miserably. If you are, for example, a ten year old small company and you need ‘help’, then I am sorry to say that you probably don’t deserve any cash.

R&D schemes for start-ups work reasonably well when they are demand-led. A good example are the US ones (e.g SBIR). Nobody in the UK government/administration that I have ever met likes these kinds of programs. They are just too much work. But they would work really well. (and there is plenty of data that proves that, too)

Direct investment programs have more or less failed the world over. I have no idea what makes people believe this will change now. Indirect investment programs (e.g. found funds that invest in start-ups_ work pretty well. But then somebody else gets all the glory and not the politicians…

Let’s hope NESTA does something worthwhile with all the money. If they manage it like the £300m that they already manage, then this should quadruple their firepower. Looking forward to seeing them close that fund!