Heriot-Watt spin-offs step Forward for funding

18 June 2001

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Heriot-Watt University has entered a partnership with venture management firm Forward Group, to provide financial and management support services for selected Heriot-Watt spin-out businesses. Forward will provide Â£10m of funding as part of the Partnership Agreement, which will run for a minimum four-year period. This latest initiative follows in the wake of a similar joint venture with Leeds University signed in 1999, soon after the group was established. By the end of the first year of the Leeds University Partnership Agreement, Forward had committed more than Â£7m to spin-out businesses from the university, taking the position of â€˜preferred supplierâ€™, where both financial and management expertise was required. Forward was set up 18 months ago by Andrew Mitchell and Ray Chamberlain, both of whom have successfully launched technology businesses, to release the commercial potential of intellectual property generated within the UKâ€™s universities and research institutes. The group invests from its own balance sheet and introduces Forward team members to spin-out companies to provide hands-on management support in such areas as operations, finance, sales and marketing. The latest partnership with Heriot-Watt has been cast in the same mould as the Leeds partnership, with Forward receiving preferred access to new technologies developed within the institution. Forward will typically invest between Â£2-3m per venture, to be drawn down incrementally by the new business as required. In return for its investments, Forward will acquire controlling equity stakes in portfolio companies. Investees will continue to pursue R&D within the Universityâ€™s labs eliminating the need to seek alternative research facilities. The University will, in return, acquire between 20-30% of a spin-outâ€™s equity. The academics behind the research will also receive significant equity stakes in spin-outs. It has been reported that, depending on the future success of its business model, Forward may seek to raise a fund from institutional investors.