UCT Evergreen Fund
Download a booklet on the Evergreen Fund from the right-hand panel.
The dearth of early stage funding continues to prove a significant obstacle in the technology transfer process, causing many promising technologies to stall, lose the momentum of the research phase and not exit the university and move along the innovation path. Unfortunately most university-based inventions lack product prototypes and the broader experimental data that even the most promising technologies require before industry, Venture Capital funders or other funding entities are prepared to invest.
Another challenge is assembling the multidisciplinary team to launch the business - i.e., ensuring adequate business management skills are coupled with the technical skills available. VCs strongly emphasise the importance of the team in their investment decisions, yet without seed funding its impossible to get this in place.
During 2007 we revisited our technology transfer and commercialisation strategy and have adopted a pro-active approach in contrast to the previous strategy which could be described as passive/reactive', with efforts confined to advocacy, information provision and service.
As part of this change in strategy, the University Research Committee (URC) approved the establishment of a Pre-Seed fund (R500 000/a) and the first allocation was made in 2008. The first 36 months of operation of the fund have demonstrated that there is a significant capacity at UCT for commercially viable innovation. By the end of 2010 the Fund has granted close to R1.5 million to several innovative academics and researchers and helped turn good ideas into viable innovation projects, of which at least four already have commercialisable outcomes, either through licensing or spinout company formation.
The fund has shown that significant innovation leverage accrues from very little financial input. The fund sends a very clear message that UCT is serious about innovation, and is willing to put some money down to make things happen. But unfortunately the fund is too small to take our more substantial commercialisation opportunities to the next level.
Here, typical projects in this space require seed funding of between R 500,000 to R 1.5 million over a 6 to 18 month period, to ensure that momentum can be sustained and next-stage funding secured. This type of funding is just not available externally.
UCT Evergreen Seed Fund
The University's Council has approved the use of a donation made by Mr Richard Sonnenberg in 1987 for technology transfer activities, as the nucleus to initiate a self-sustaining (evergreen) seed fund that will be known as the UCT Evergreen Seed Fund. The current balance of the donation is in the order of R2 million. Download a booklet on the Fund from the right-hand panel.
This fund will build upon the existing Pre-seed Fund foundation, with the objective of assisting the successful transformation of good technology into good business. The fund will differ from the Pre-Seed fund in the sense that the investment will be considered a loan, rather than a grant. The loan will have to be paid back once further investment has been acquired or profits have been realised or the loan could be converted into an equity stake in a spin out company and the fund replenished when the equity is sold at a later date. It will also allow us to invest more than the current contributions through the URC Pre-Seed Fund, i.e. which has two levels of funding, "Explorer" (R20,000) and "Concept" (R100,000).
The fund will be administered by RCIPS and a committee will be formed to evaluate submissions. The Committee will include representatives of RCIPS, the URC Pre-Seed Fund's Review Panel, a representative from Central finance and member(s) from the Alumni & Friends Innovation Network. The committee will report to DVC Research, The Executive Director of Finance and The Registrar on an annual basis.
R2 million is a relatively small amount and will require very selective investment to ensure sustainability. Therefore it is hoped that the fund will be strengthened through external tax deductable donations, no matter the size, from people like yourself.
Donors can take pride in the difference their contribution will make and be assured that all returns from investments made, will be retained by the Fund to invest in further projects. Supporting this initiative, contributors have an opportunity to be an integral part of Innovation at UCT' and know that they are strengthening and building the South African economy though innovation and by creating start-up companies and employment opportunities.
If you would like to participate in the Alumni & Friends Innovation Network, or be kept informed of developments, please download and return the response form (right-hand panel above).