Technology start-ups are to benefit from government funding with the launch of the Rainbow Seed Fund. The new fund will focus on the development of high technology businesses emerging from public sector research laboratories.
Rainbow has been established by a partnership of public research laboratories with £4 million won through an open competition run by the Office of Science & Technology in the Department of Trade & Industry. The new fund will complement the success of the University Challenge funds to help realise the huge potential of the UK’s research base.
The partnership involves CLRC (Central Laboratory of the Research Councils), Dstl (Defence Science and Technology Laboratory), NERC (Natural Environment Research Council), PPARC (Particle Physics and Astronomy Research council) and UKAEA (Fusion). Between them, the partners spend over £700 million annually on research across over 28 locations and institutes.
The fund will be run by Midven Limited, a venture capital management company specialising in seed investments and research environments in the public sector. Terry Swainbank of Midven, said: “Rainbow represents an exciting opportunity to help entrepreneurial scientists in these institutions evaluate the commercial potential of their research and for new spin-out companies to be created from the more robust proposals.”
Rainbow will make investments in individual projects from around £10,000 to a maximum of £250,000 to fund activities including market research, preparation of a business plan, building a prototype and early business development.
Swainbank anticipates that the projects will generate a lot of interest from investors, who may wish to co-invest or provide second or third stage funding.
Rainbow will be monitored by a board including representatives from the partners and six non-executive directors. Former chairman of UK research council ESRC, and also a venture capitalist, Dr Bruce Smith is chairman. He said: “I am looking forward to seeing a great variety of exciting and promising technologies benefit from the Rainbow fund.