Lack of Proof of Concept Funding

We need more people starting up knowledge-based businesses. We have to acknowledge success if far from certain. There will be failures: unless there are we, as a region, are being too conservative in our thinking. However, with the help of organisations like Connect we can load the dices in favour of success and avoid the mistakes of the past. Enterprise and innovation is not a one way street. We need good technology that matches to a market need. All too often an idea misses the mark; aligning the technology with an addressable market need is what innovation is all about. Connecting entrepreneurs with the resources they need to nurture their initial seed of an idea until it reaches sustainability is a key part of the equation.

A key part of this that is lacking in the Yorkshire region is Proof of Concept funding. If we look to our neighbours, the North East has a £10M fund, set up to stimulate the growth of new technology companies. The North West similarly has access to the Rising Stars fund that backs early stage companies. These funds typically put £25-60K into a company at inception, with the option to invest further if the idea is shown to have legs. What access do would-be entrepreneurs have to funding at this level in the Yorkshire region? The reality is very little, but this is a key part of the innovation landscape.

Some pump priming is needed if we expect the region to generate sustainable technology businesses further down stream. The reality is that 3 out of 4 of these investments may not generate a return, but the ones that do will make up for the others - or that is how it should be if we are finding the correct balance between risk and reward.