InnovationQuarter awarded for effort to bridge ‘Valley of Death’
We are very pleased to announce that InnovationQuarter’s proof-of-concept fund UNIIQ has been awarded with the special mention for commitment to excellence by the jury of the European Association of Development Agencies (EURADA) in the non-member category. Every year, EURADA awards several best-practices of non-members and members of EURADA. With UNIIQ InnovationQuarter aims to bridge the riskiest early-stage investment phase that exists for academic spin-offs. EURADA’s complete press release you find here. In June 2020, representatives of InnovationQuarter will partake in EURADA’s Agorada2020 to officially receive the special mention from a representative of the European Commission.
In 2016, UNIIQ was established by a joint effort of InnovationQuarter and the three renowned universities based in Zuid-Holland: Delft University of Technology, Leiden University and Erasmus University Medical Center Rotterdam. UNIIQ is a € 22 million proof-of-concept fund addressing the funding gap that exists for academic spinoffs, startups and existing SMEs with disruptive innovations by providing convertible loans up to € 300,000. The milestone-based funding is used for technical- and market validation. UNIIQ operates independently and is managed by a high-quality team of 6 investment professionals, most of whom have prior experience in the private sector.
UNIIQ was awarded with the special mention for commitment to excellence due to its unique features. In various ways UNIIQ differs from other governmental investment funds:
- Due to the collaboration between the three universities and InnovationQuarter technical expertise and market knowledge are brought together. UNIIQ’s team is based at the headquarters of InnovationQuarter where the team is able to tap into the network and expertise of other professionals working at InnovationQuarter. To keep close contact with the Universities’ technology transfer offices there is an additional dedicated investment manager for each university. UNIIQ’s investment managers nurture close ties with organizations in the entrepreneurial ecosystem, such as incubator YES!Delft (the incubator of the Delft University of Technology). Given the high risks of investing in the proof-of-concept phase, access to their knowledge is essential.
- UNIIQ identifies innovations and teams with the potential to positively impact society and helps them reach this potential by getting on board as a company’s first investor. Unlike many other governmental investment funds, UNIIQ is permitted to invest without co-investors. This allows UNIIQ to help young innovative technology companies realize their plans and bridge the riskiest phase from concept to promising business – also referred to as the “Valley of Death”.
- Finally, UNIIQ’s investment conditions were drafted with the ultimate goal of securing follow-on investments in mind and allow for a speedy process. The convertible loan conditions are standardized and entrepreneur-friendly. A unique feature is that not UNIIQ but the entrepreneur has the right to convert the loan if a qualifying investment round is raised. This is vital for securing follow-on funding, as conversion may be seen as a hurdle by future investors. To the best of our knowledge, UNIIQ is the only public investment fund that provides convertible loans without claiming the right to convert.
Transferring UNIIQ to other EU-regions
Transferability was an important selection criterion of EURADA’s jury. We believe that UNIIQ has great potential for transferability. In many European regions, innovative companies face problems while raising early-stage funding for their disruptive technology. The initial investment by the founders and their family and friends is often not sufficient to reach enough validation to convince investors or potential clients. Often, this causes the company to plunge into the so-called “Valley of Death”. Solidly set-up proof-of-concept funds, such as UNIIQ, have the potential to overcome the Valley of Death towards a follow-on investment, decreasing start-up mortality greatly. We are convinced that setting up a multi-shareholder fund like UNIIQ to bridge this gap is a feasible intervention that can be transferred to many regions. To successfully transfer UNIIQ’s concept, regional universities, governments and the local development agency do need to have a mutual understanding of the challenges innovative companies in the region face. This takes time and can be challenging, but is undoubtedly worth the effort.
The European Association of Development Agencies (EURADA) was created in 1992. It has 27 years of experience facilitating the analysis and selection of best practices on regional economic development. EURADA gathers 77 Development Agencies from 23 countries from Europe and beyond representing 140 million of citizens. One of EURADA’s focuses is promoting cooperation among professionals by creating networks, facilitating structured exchange of knowledge with the aim to promote innovative and transferable techniques in the field of local and regional economic development. In addition, EURADA advocates the role of Development Agencies as key player for economic growth of European territories.