The assessors will score your answers for questions 1 to 10. You will receive feedback from them for each one.
Your answer to each question can be up to 1 page of A4. Do not include any URLs in your answers.
Question 1: Investment criteria
Innovate UK wants to give equal opportunity to companies seeking funding and investment across the whole of the UK. Do you have any constraints in terms of investments?
- any geographic limitations around where you can invest, your existing footprint and any plans to extend your reach through this proposal
- whether geographic or technological overlap with your existing portfolio influences your decision to invest
- any limitations on when and for how long you intend to invest
- any restrictions around the timing and availability of capital, such as whether fund raising is subject to syndication
Question 2: Capital
What approach will you take to investing capital?
- the sources of your capital available for investment
- how much capital you have available to invest into this competition and how you will meet the requirement to provide investment at least equal to Innovate UK’s grant allocation from 2020 to 2024
- how you will generate sufficient investments into relevant businesses carrying out suitable innovation projects to fully commit the grant funding alongside equity investment within 2 years
- how you intend to meet the requirement to have 3 times the initial grant allocation of investment capital available for follow-on funding by 2025
- your strategy for holding investments linked to this proposal and how this compares to your typical approach
- evidence around your typical investment size at each stage of company development and how this compares with the investment approach in this proposal
- whether you prefer to invest alone or in syndication with other investors
- your fee structure with respect to applicant SMEs throughout the life of the application and investment management cycle
In a separate appendix named ‘Appendix Q2-(application number)’ you can submit in PDF format up to 10 A4 pages. You can include charts and diagrams. The font must be legible at 100% zoom.
Question 3: Investment timing and rounds
Innovate UK typically issues grants to companies developing highly innovative, disruptive technologies. Through the Investment Accelerator, we are keen to encourage private investment into these companies. What types of companies do you invest in and how will you change your approach for this competition?
- how you will adjust your investment strategy for this programme
- what is the earliest stage of company development you would intend to invest in
- whether you are prepared to invest in university spin-out companies, and any constraints on the universities you work with
- the total number of companies in your portfolio
- how many of these companies first took investment from you in the range of £250,000 and £2 million
- the number of exits, initial public offerings (IPOs) or mergers and acquisitions achieved by investee companies in the last 5 years
- how you will develop the capability to assess and support companies coming through this programme
- your target return multiple for this proposal and how this compares to your typical target return multiple, plus your performance against target over the past 5 years
- if you intend to fund over several rounds of investment
- the decision matrix for investments and divestments, including the governance arrangements
In a separate appendix named ‘AppendixQ3-(application number)’ you can submit in PDF format up to 10 A4 pages. You can include charts and diagrams. The font must be legible at 100% zoom.
Question 4: Investment scope
The ISCF Quantum Technologies Investment Accelerator will increase funding and investment in businesses that aim to support the commercialisation and industrial exploitation of quantum technologies in the UK. What is your interest in the field of quantum technologies?
Describe or explain:
- your interest in the field of quantum technologies and why you believe it is an exciting area for investment
- how many investments you intend to make a year in this programme
- the investment opportunities you are interested in: products, services, business models and so on
- whether you aim to focus your investment in one, or more, of the three technology strands (connectivity, situational awareness and computing)
- any investments you currently have that could be classed as quantum technologies
- your anticipated future portfolio of quantum technology companies, including the distribution of investments, average transaction size and timing of investments
- how you will use this programme to access new opportunities in quantum technologies
Question 5: Added value of your investment
Innovate UK has established the Investor Partnerships Programme because we recognise the added value an investor can bring to companies beyond the investment capital itself. What additional value can you provide to companies in this programme?
Describe or explain:
- what expertise you can bring to actively build value in a business, including the development of business skills, recruitment, supply chain development, market access and so on
- what expertise you can bring to a company specifically operating in the field of quantum technologies
- what relevant sector and technology specific expertise you have
- how your investment will use Innovate UK grant funding to help scale and grow innovative UK companies operating in the broad field of quantum technologies
- how you will encourage diversity (for example in terms of age, gender or ethnicity) among the companies seeking investment
Question 6: Impact of the Investor Partnerships Programme
The Investor Partnerships Programme at Innovate UK has been established to encourage private investment into early-stage, innovative UK companies.
How would your investment into these grant funded projects impact the Quantum Technologies challenge?
Describe or explain:
- the anticipated outputs for the Quantum Technologies challenge
- the difference being an investor partner would make to your fund, such as giving you a faster route to market or reducing risk
- how being an investor partner would change the nature of your investment activity, such as enabling you to invest at an earlier stage, widening your technology portfolio, investing in different types of businesses or investing in more risky R&D within your portfolio
- what would, or would not, happen if your application to become an investor partner is unsuccessful
Question 7: Raising awareness and engaging with businesses
How will you raise awareness of this opportunity and engage with suitable businesses?
Describe or explain:
- your strategy for raising awareness about the opportunity amongst the entrepreneurial community
- how you will engage specifically with businesses in the area of quantum technologies
- how you will ensure the opportunity is promoted to a diverse range of company founders (for example in terms of age, gender or ethnicity)
- your strategy for promoting the programme to potential investee companies to attract suitable quantum technology projects for grant funding by Innovate UK from the allocation, alongside your private investment
Question 8: Investor partner team
Who is in the team and what are their roles?
Describe or explain:
- the roles, skills and experience of all members of the team who will be responsible for delivering the programme and their forecast time commitment to delivering this proposal
- how the team will be incentivised to ensure the programme objectives are met
- any roles you will need to recruit for
In a separate appendix named ‘AppendixQ8-(application number)’ you can submit in PDF format up to 10 A4 pages. The font must be legible at 100% zoom.
Question 9: Process management and tracking the portfolio
How will you manage the operational processes and track the portfolio of grant funded companies?
Describe your processes for:
- identifying potential applicant companies with suitable innovation projects for grant funding
- managing the allocation of grant awards to successful applicants
- syndicating with other investors, if applicable
- tracking and reporting on applicants for project grant funding and for equity investment
Question 10: Financial information and operational costs
How much grant allocation are you applying for and what will your costs be to manage this funding?
- the preferred amount of grant allocation you are applying for and the rationale for this
- the minimum amount of grant allocation you would be prepared to operate with
- the maximum amount of grant allocation you feel you could effectively allocate to businesses within the time period
- your anticipated costs for managing the distribution of grant funding and how this represents value for money for you and the taxpayer
- how your costs might change depending on the amount of allocation you receive
- the financial standing of your business, including but not limited to assets under management, long term liabilities, provisioning and returns to investors
You should include historic and forecast financial information about your fund showing that it will have the financial capacity to manage an allocation of funding on behalf of Innovate UK.
You must provide a separate appendix named ‘AppendixQ10A-(application number) in PDF format and up to 2 A4 pages long. It must show the schedule of fixed charges for the 4 year deployment of the allocation. You should account for VAT as described in section 7 of the allocation agreement. You must agree to these charges as part of schedule 2 of the allocation agreement ‘investor partner management and operational charges’. The agreement will be ready to view once the competition is officially open.
In a separate appendix named ‘AppendixQ10B-(application number) you can submit in PDF format up to 10 A4 pages for additional financial information, including historic and forecast balance sheet, profit and loss income and expenditure, and cash flow statements.
The font must be legible at 100% zoom for both appendices.
Question 11: Legal structure
What is the legal structure of your fund?
- the legal structure of the fund, or entity, proposed to hold and manage the distribution of grant funding
- the controls and oversights in place over the processes and how decisions are taken within that entity
In a separate appendix named ‘AppendixQ11-(application number)’ you can submit in PDF format up to 5 A4 pages. The font must be legible at 100% zoom.
This question is not scored but will be used during our due diligence review.