Dr Richard Thompson knows a thing or two about spinouts and technology businesses, having spent much of his international career working with them.

After returning to Wales he first helped Welsh Universities with spinouts and start-ups before establishing himself as a technology investor with leading UK SME investor, Finance Wales. Part of Finance Wales’ technology team, he’s actively investing in technology-based companies including spinouts.

Available capital

Raising early stage equity investment isn’t easy and it’s become harder recently, but Finance Wales has capital available and invests in first and follow-on rounds. “Our appetite for investment is high, as is the quality of opportunities on offer.

Having launched its £150 million fund in 2009, Finance Wales is rapidly becoming one of the UK’s most active early stage investors and in 2009-10 made 30 early stage investments, 14 of which were co-investments.

Dr Richard Thompson
Increasingly, Dr Thompson is talking to technology businesses and spinouts from outside Wales. “These small companies approach us; they are mobile and are prepared to relocate to secure investment. In the past, companies would move to Wales to secure grants or for the incubator facilities. Now we’re finding they’re seeking VC investment and we ‘signpost’ them to what else is on offer.”

Challenges for spinouts

Having capital to invest at an early stage, and an appetite to follow its investments, Finance Wales makes a refreshing change, Dr Thompson believes. “We have over 10 years’ experience of working with spinouts, we invest as early as just about any other VC I know; we can follow our money and we’re proactive in finding co-investors.”
Dr Thompson knows the challenges technology businesses and spinouts face and experience tells him that securing long-term exit-focused investment is the key. “Proving their technology is just the start. There are management teams to help build, markets to develop and sales to be achieved, but these challenges can be overcome with exit-focussed investment,” he explains.
In particular spinouts not only need investment capital, they need time, focus and the support of a strong investor to give them the best chance of success and to attract co-investors. For Dr Thompson, Q-Chip, the Cardiff-based biopharma company chaired by Ken Powell, founder of Arrow Therapeutics, is a good example.
"Q-Chip has so far secured £8.5 million from Finance Wales, Disruptive Capital, and a high profile angel syndicate including British venture capitalist, Jon Moulton. Q-chip is one of a number of Cardiff University spinouts Finance Wales has invested in with Fusion IP.

Finance Wales’ early stage team is well networked with the higher education sector and examples of our many related investments include Glamorgan University spinout, GeoVs, as well as Calon Cardio and Haemair which are both based at Swansea University’s Institute of Life Science.

Dr Richard Thompson
Now, with some exciting portfolio companies under his belt, money to invest and to follow his investments, Dr Thompson is keen to meet even more technology-based companies.

See Finance Wales' latest early stage investments.

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