18/11/2011

Ann Casey on co-investing in success

A collaboration between Finance Wales and Fusion IP, the company which commercialises university-generated intellectual property or IP, has already seen Finance Wales invest £3.8 million in seven spinouts.

Ann Casey of Finance Wales reflects on the benefits the relationship is delivering for the spinouts the companies are investing in.

“When we signed the memorandum of understanding with Fusion IP back in 2007, Cardiff University had been identified as one of the UK universities most likely to generate commercially viable IP and Fusion IP had signed an exclusive agreement for the rights to Cardiff’s IP,” Casey explains. “We were excited by the pipeline of potential investment opportunities a strong relationship could bring.”

Spreading the risk

Now, seven co-investments later, Finance Wales and Fusion IP have invested in hi-tech spinouts commercialising a diverse range of IP. The companies have also developed a strong relationship along the way and Casey believes this relationship offers real benefits for investor and investee-company alike.

Finance Wales and Fusion IP obviously benefit from working together - we can spread the risk, share diligence costs, for instance. But the spinouts also benefit. Co-investment increases the availability of investment capital and in a number of deals, our involvement has also attracted other co-investors with additional funding or sector specialisms, including ERA, Disruptive Capital Finance and Longbow.

Ann CaseyFinance Wales' Early stage investments executive

Helping spinouts

The backing of strong investors also helps spinouts as they commercialise their ideas and bring them to market because they often require follow-on investment. Both Finance Wales and Fusion IP are able to follow their investments to ensure that spinouts achieve their potential.

In any potential investment, valuable IP is important, but so too is a realistic exit strategy and a strong management team with a commercial focus.

As Casey explains: “Spinouts need to develop a commercial focus from the outset as this can mean the difference between success and failure. Fusion IP will often second staff to a pre-revenue academic spinout in the early days to help its management team develop its commercial focus and plan for exit.”

Now, as the relationship between Finance Wales and Fusion IP enters its fifth year, Casey is pleased with the investment opportunities that have resulted from the tie-up as well as the other benefits it has brought for the two investors and the spinouts they have invested in.

“Not only have we invested £3.8 million since signing the memorandum of understanding, but we’ve developed a strong relationship which has benefited the spinouts we’ve co-invested in. Co-investment can pay real dividends and I’m convinced that we’ll be able to achieve even more in future,” continued Casey.

This article first appeared in Spinout UK's Quarterly Journal (www.spinoutsuk.co.uk)