Following the recent news of a consortium involving NorthInvest securing up to £2m from InnovateUK as part of the Regional Angel Investment Accelerator programme, we sat down with Jordan Dargue, Investment Director at NorthInvest and Access to Finance Manager at the Innovation SuperNetwork, to get the low down on the programme and what it means.
So Jordan, can you explain what the RAIA means exactly?
The RAIA programme sets out to invest grants of up to 50% into novel research and development projects. The grant funding supports early-stage R&D projects, matching 50% of the total project cost alongside angel investment. For example, if a project value is £300,000 – the RAIA grant can invest £150,000 with a further £150,000 coming from angel investors. Projects can be between 6 and 12-months long, with total project costs between £50k and £1m.
Sounds great, what’s the purpose of this?
The aim of the RAIA funding programme from Innovate UK, as part of UK Research and Innovation, is set out to increase the pool of regional angel investors prepared to consider investing in earlier stage, ambitious, innovative businesses in the regions. The project has been established to:
- Increase Angel investment capacity in the north, working with the Angel investment community, and increasing angel investor networks.
- Deploy a range of activities and resources to support and champion diversity in investment and across the wider ecosystem landscape.
How exactly does this help entrepreneurs?
The key thing to note here is that any entrepreneur that successfully receives money through the RAIA programme has had their R&D project independently assessed by Innovate UK. Given their proven expertise in assessing innovation, will de-risk a business for investors, which could in turn propel the business to raise more funding, achieve better valuations and have a larger regional impact (and beyond!).
The combination of grant and angel support should serve allow businesses to meet both R&D costs and grow the business, which should help increase survival rates.
What could this mean for investors and their investment portfolio?
If the business had been able to secure RAIA grant funding for a research and development project, this will bring additional benefits to the investor. As I mentioned before, the fact that the project has been independently assessed and approved by Innovate UK validates the innovation of the project, which de-risks the business for an investor. The reduction in risk is further compounded by the matched funding of 100% of the costs of the project by the grant.
For investors looking to diversify their portfolio, the RAIA programme offers the opportunity to invest in early stage companies and accelerate their progress. There is an opportunity for syndication , additional mentoring from experienced lead angels and an introduction to co-funds and VCs for follow on rounds.
We’re really proud to have the support of Innovate UK and we’re already well underway with applications, so I suggest people get in touch with me quick to find out more!