Innovation and R&D Escalator Workshop: Ronan Cunningham - Leveraging funding
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Transcript of Innovation and R&D Escalator Workshop: Ronan Cunningham - Leveraging funding
Leveraging Invest NI
and Innovate UK
Funding for Strategic
Growth
A Little Bit About Me and Why I’m Here
• 18 years in the US working in the aerospace and defence industry
• Director of Business Development and Director of New Technology
Development for a growing SME
• Currently EiR with NISP Connect
• Work with a number of early stage tech startups
• Successful in leveraging government grants to accelerate strategic
growth to >120 employees and $25M+/annum in revenues
• Lots of (hard) lessons learned along the way
Some Things We’ll Touch On
• When grants make sense
• How to use them as part of a broader strategy
• Preparing to write a strong proposal
• The importance of partnerships and collaboration
• Protecting your IP
• Getting beyond the grant and into the marketplace
Are Grants a
Good
Fit For Me?
What Grants Are Not
• Revenue
• A quick proposal
• A sure thing
• Your first customer
• Enough money and resource to get to market
What Grants Can Be
• A platform that helps to launch your technology and business
• Pre-validation of your idea for VCs and investors
• Door opener to many new connections, government & industry
• Time-consuming
• Frustrating
• Distracting
• Unbeatable resource if used the right way
They Can Be Highly Competitive
• Depending on the funding type, win rate can be as low as 1 in 10
• Competition is good! It makes you test your assumptions and battle
harden your business plan!
When Are They a Good Option?
• The technology is a core part of your business model
• Still need to de-risk the technology for private sector funding
• There is an identified market
• The technology is innovative and protectable
• There is not an immediate go-to-market urgency
• There is a good balance between technology push and market pull
Technology Push versus Market Pull
R&D Production Marketing Need?
R&D Production Marketing Expressed
Market Need
Be Prepared For the Following
• 40-60 hours of preparation time for a strong proposal
• Lots of writing and rewriting
• Lots of writing and rewriting
• Potentially long time lag between submission and award
• Mandatory contractual obligations and associated overhead
Fitting Them Into
Your Innovation
Strategy
They are most effective when part of
an integrated plan
Don’t Let a Grant Drive the Company
• Too many people focus on “how can my business model be
adjusted to fit into this grant/contract?”
• Leads to frustration and ultimately failure to launch the business
you dreamed of
• Focus should be on “how can this grant/contract fit into my business
model?”
• If it doesn’t clearly fit, you should not apply
• Be aware of the time lags that grants can add to product
development
My View on Strategic Use of Grants
The real value of grants is when they
allow you to get further along in your
product development and market
exploration in a timely fashion such that
you have developed significant
additional value in your
product/company before you seek
external investment
Only Bid if You Can Answer Yes
If you had the same amount of money in
the bank as you intend to submit a
proposal for, would you invest it in the
technology yourself?
Setting Yourself Up
to Write a Great
Proposal
It’s all in the preparation
It’s Not About Winning a Grant, It’s
About Getting to Market
• Winning a grant is not a goal in and of itself
• Primarily an opportunity to fund derisking of your technology
• Provides a platform to get your technology to market
• Proposal must be developed with bigger goal in mind
• Engaging with potential customers before proposing is key to a
great proposal
• The government agency is not a guaranteed customer
9 Questions You Need to Know the
Answers To
1. What are you trying to do? Articulate your objectives using
absolutely no jargon.
2. How is it done today, and what are the limits of current practice?
3. What's new in your approach and why do you think it will be
successful?
4. Who cares?
5. If you're successful, what difference will it make?
6. What are the risks and the payoffs?
7. How much will it cost?
8. How long will it take?
9. What are the midterm and final "exams" to check for success?
Understand Your Market
• Target industries and demographics
• UK and global market size
• Potential market share and value
• Typical business models (e.g., SaaS, PaaS, OEM, retail, etc.)
• Barriers to entry and typical adoption cycles
• Route to market
• Resources required
Understand Your Competition
• Avoid being a me-too business
• Must have an intimate understanding of competing offerings
• Identify competitors unique selling points
• Identify gap in the market
• Clearly differentiate your offering and uniqueness
• Technical
• Business model
Understand the Risks
• Technical
• Operational
• Commercial
• Financial
• Use to refine technical approach and business model
Have Peers Review the Proposal Before
Submission
• Official review panel may be made up of a different skills and
backgrounds
• If possible, have both people within your company/industry and
people unfamiliar with your industry do reviews before submission
• Industry peers can help poke holes in your assumptions, clarify
applications
• Non-industry peers help improve clarity of the proposition
If You Don’t Win, Don’t Despair
• The process you have gone through will strengthen your business
plan and ability to secure other types of funding
• In general, feedback from the review panel is excellent and adds a
lot of value
Protecting Your
Innovation
You need to have a comprehensive
IP protection plan
You Can’t Monetise What You Haven’t
Protected
• Copyrights
• Trademarks
• Trade secrets
• Patents
• NDAs
• Proprietary markings
IP Protection Extends to Employees,
Subcontractors and Partners
• Employee agreements include transfer of IP ownership
• IP transfer agreements for outsourced works (work for hire)
• Clear identification of IP and ownership in partnership agreements
Be Extra Careful When Using Open
Source Software to Develop IP
• Benefits of open source must be weighed against licensing terms
• Derivative works are not always protectable
• “Copyleft” licensing agreements
• Consult with an IP professional if open source may be key part of
your technology plan
Teaming and
Commercial
Partnerships
The right team with get you there faster
You Can’t Do It All Alone
• Partnerships reduce risk and are critical to your success
• Technical partners will:
• Improve and/or expand capabilities and potential market
• Commercial partners will:
• Shift your focus from technology push to market pull
• Allow you to develop a product that appeals to the end user
• Provide market entry point and sales and marketing resource
Big versus Small Partners
• Big companies are often ultimate goal but can be poor first partners
• Large and inflexible, long contractual timelines
• Impact of your technology on their bottom line too small
• Smaller (but right sized) partners are often better
• More flexible, hungrier to differentiate themselves
• Often times are suppliers to your target large companies
• Fast response times: don’t forget that this is a race to market
Sharing a Little Wealth Goes a Long
Way
• A small subcontract makes all the difference
• Large companies need to have a chargeline to bill to to make it
easy to support you
• Small companies have limited resources
• Puts some skin in the game for all involved
• Shows intent and provides reward for valuable contribution
Teams Work Well When Everyone is on
the Same Page From Day One
• Before you start a project together, establish in writing:
• Responsibilities of each party
• Ownership of background IP and separation/inclusion
• Rules on new IP ownership, sharing or licensing
• Expectations for follow-on work partnering (e.g. Phase II)
• Never start a project assuming this will be taken care of later
• What is difficult to discuss now is 10X more difficult later
Bridging the
Valley of Death to
Commercialisation
Start Planning for Next Phase
Immediately
1 2 3 4 5 6 7 8 9
TRLBack of
napkin
Validated
commercial
product
InvestNI and
InnovateUK funding VCs, angels, etc.
Significant time lag if done in series
Lots of Programs & Networks That Can
Help Smooth Way to Phase III
• _connect
• Springboard
• Cofounders Wanted!
• Invest NI Business Strategy Services
• Propel Programme