Tax efficient fund launched for start-up university spin-outs

Technology investor Mercia Fund Management has launched its sixth tax-efficient fund which is focused on commercialising start-up spin-outs from universities across the Midlands, the North and Scotland.

The University Growth Fund will combine the government’s Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).

It intends to encourage entrepreneurship across the UK’s universities to give student entrepreneurs the opportunity to see their ideas come to fruition, and secure the funding necessary to bring their ideas to market.

Mercia says that investors can expect to realise their portfolios between years four to seven, with a minimum investment of £25,000, equating to 75% EIS and 25% SEIS.

According to the Spinouts UK Annual Report 2015, the number of successful exits by university spin-outs is continuing to rise with IPOs, trade sales and mergers increasing significantly over the last four years.

However, as a result of the geographic bias of capital to London and the South East, businesses from elsewhere in the UK are struggling to find the financial support needed to commercialise their ideas.

Nicola Broughton (pictured), head of technology transfer at Mercia, commented: “University spin-outs provide a vital source of disruptive start-up businesses and technology, with many achieving successful commercialisation of their IP.

“At Mercia, we are pleased to be able to offer dedicated funding and expertise to spinouts, which will allow more intellectual property to make it out of the lab, and onto the market.

“The Gold Triangle of Oxford, Cambridge and London is still very much the main investor focus, despite the fact that 52% of all active spinouts originate from the Midlands, North and Scotland.

“We are continuing to build and strengthen our university investment partnership network across the Midlands, the North and Scotland, where we are seeing fantastic, and largely untapped, opportunities across key technology led sectors.”