Universities launching more start-ups

Some 3,118 new businesses emerged from universities in 2011, up from 2,457 in the previous year, according to the latest HE Business and Community Interaction Survey, reports The Telegraph.

Firms that originated in UK universities now have a combined estimated turnover of around £2.5bn, up from £2.1bn, and employ more than 30,000 staff. There has been a particularly pronounced increase in graduate start-ups, the figures show, with 2,771 emerging last year compared with just 2,156 in 2010 and 2,079 in 2009.

Venture capital firm MTI said the increase was welcome since it showed “universities are getting better at identifying commercially promising innovations … and supporting them through to commercial success”.

However, MTI said the figures did not reflect any more money being available for university start-ups. MTI runs the Orion Fund, a partnership with University College London and the Universities of Edinburgh and Manchester. It is currently trying to raise £150m to provide “seed” and follow-on funding for around 35 spin-out firms.

Cambridge University is also raising its own fund of around £1m to invest in the innovative companies that emerge from the university using the Seed Enterprise Investment Scheme, a Government initiative which offers a series of generous tax breaks to backers of start-ups.

Richard Henderson, managing partner at MTI, said these initiatives “are gaining traction and counterbalancing the latter-day inclination of venture capital to concentrate on later stage deals”.

However, he added: “The public and private sectors need to provide more financial support for the academic powerhouses generating some of our most exciting innovations”.

He proposed a “focused and determined relaunch” of the UK Innovation Investment Fund, a government scheme set up in 2009 to invest in spin-outs.