How Brilliant Idea Evolves to Dazzling Product; for Five Years Newcastle Venture Capital Firm NorthStar Equity Investors Has Helped Countless Science and Technology Businesses Start or Grow. Christopher Knox Reports. in Association with NETPARK NET

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THE region's science and technology sector has been the envy of the country for years now, with institutions such as Newcastle's Centre for Life and The Centre of Excellence for Life Sciences (Cels) helping to foster a culture of innovation.

However, it is the initial funding start-ups receive which can be the difference between success and failure and can prove essential for inventors looking to turn their blueprints into fully functioning products.

By the end of the year NorthStar Equity Investors (NSEI) will have invested pounds 33m in the regional economy through its two funds, the pounds 10m Proof of Concept (POC) Fund and the pounds 23m Co Investment Fund (CoIF).

Where NSEI differs from most standalone investors is that it also provides technological and commercial expertise, with a team having the knowledge to turn ideas into viable businesses.

The firm also works alongside other investors in the North East and beyond to ensure promising entrepreneurs find the financial backers that best suit their business model.

Dr Richard Exley, who has headed the POC fund since its inception in 2003, said: "However good the technology is, it needs a market and that needs to be quantified.

"Once we believe that the technology can be sold, we start building an investment case and a plan of how to implement the idea.

"At this point we also start to look at the skills needed to bring the technology to fruition and begin to build a team.

"It's important to remember that investors invest in people first and foremost. No matter how brilliant the technology and exciting the market, no one will back it if they don't believe in the management."

The firm, which has also created pounds 47m through deals with other companies and angel investors looking for a slice of the action, recently announced a pounds 2.4m extension to the POC fund, which will be available to entrepreneurs until the end of next year.

The POC fund was created to help plug the investment gap facing businesses in their earliest stages, when the risks, and chances of failure, are most high.

Financed by One North East and the European Regional Development Fund (ERDF), it has already helped to create 200 jobs in the region and committed more than pounds 10m to 170 hi tech companies across a wide range of sectors, including healthcare, IT, biotechnology and the environment.

Many POC companies have gone on to achieve further funding. In fact, nearly a third of NSEI's CoIF portfolio are businesses that have grown from initial POC funding.

Dr Exley said: "When it began, our challenge as an investment team at NSEI was to find good opportunities across the regions and, needless to say, we've been constantly impressed with the range of ideas from entrepreneurs, existing companies and the region's universities.

"Sourcing new high quality POC deals is a huge part of NSEI's role and is without doubt our key focus over the next 18 months now that it has been extended.

"Managing our investments, however, is just as important as making new ones. Having worked with 170 businesses in the region, the majority of which are start-ups, our role is to help them continue their growth. …


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