Astp site visit oxford 14 th september 2007 oxford catalysts dr mairi gibbs isis innovation
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ASTP – Site Visit Oxford 14 th September 2007 Oxford Catalysts Dr Mairi Gibbs, Isis Innovation. Academic background. Prof Malcolm Green Joined Department of Chemistry at Oxford in 1963 1975 First catalysis paper published

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Astp site visit oxford 14 th september 2007 oxford catalysts dr mairi gibbs isis innovation

ASTP – Site Visit Oxford14th September 2007 Oxford CatalystsDr Mairi Gibbs, Isis Innovation

Academic background
Academic background

  • Prof Malcolm Green

    • Joined Department of Chemistry at Oxford in 1963

    • 1975 First catalysis paper published

    • 1987 Fundamental advances on partial oxidation catalysis (published in Nature 1990)

  • Dr Tiancun Xiao

    • Visiting professor Beijing University of Chemical Engineering

    • Joined Oxford Chemistry’s Wolfson Catalysis Centre 1999

    • Royal Society BP Aramco Research Fellow

    • First patent filed 2001

The role of technology transfer
The role of technology transfer

  • Isis Innovation

    • First disclosure 15 February 2001

  • Project manager

    • Two project managers since inception

    • Dr Mairi Gibbs has managed since June 2002

    • Additional support from business development fellows and other project managers

  • Decision to file patents

    • Four filed to date, all costs initially met by Isis

  • Seed funding

  • Management of the spin-out process

Seed proof of concept funding
Seed / Proof of Concept Funding

  • The funding gap

    • Research grants are for non-commercial work

    • Typically long lead times

    • Publication / commercialisation trade-off

    • External investors want ‘belt and braces’

  • Operation of the University Challenge Seed Fund

    • £4m from DTI, Gatsby Foundation, Wellcome Trust, OU

    • Launched in 2000, used in three years

    • 68 projects from £2,500 to £250,000

  • Four Universities proof of Concept Fund

    • Cambridge, Imperial, UCL, Oxford £1.9m POC fund

    • Awarded under Higher Education Innovation Fund 2

    • Projects up to £25,000 or £50,000, no return to Fund

Seed proof of concept funding1
Seed / Proof of Concept Funding

  • Xiao and Green awarded £124,500 in June 2001

    • Led to equity in Oxford Catalysts Ltd in Dec 2005

    • Patent 2

    • Significant value back to fund

  • Business Development Fellowship

    • Funded Dr Xiao 2003-2004

    • Patent 3

    • Without it – no Dr Xiao and no spin-out!

  • Proof of concept award September 2004

    • £24,500 for building a prototype H2 generator

    • “Invaluable for showing to potential investors”

    • Patent 4

Where to now
Where to now?

  • The commercial options

  • To license or to spin-out? That is the question.

    • Ultimate customers for half the technology are major petrochems

    • Significant investment needed, long time lines

    • Entrepreneurial approach needed to develop H2 reformers for fuel cells

    • Potential loss of value by splitting IP, but

    • Potential loss of focus by keeping it together

    • Wishes of the academic founders

      • Dr Xiao needed a job

  • Technology launched by Isis in December 2003

    • Significant interest but no deals

Putting the package together
Putting the package together

  • CEO selection

    • Numerous candidates approached, none perfect

    • Dr Will Barton joins project Dec 2004

    • Contingent on successful fund-raising

    • Very good at operations, reluctant salesman

  • The business plan

  • Marketing to investors

  • Isis Angels Network

Astp site visit oxford 14 th september 2007 oxford catalysts dr mairi gibbs isis innovation

  • Investment briefing sent to ca. 100 business angels

  • Many venture capitalists contacted

  • Isis Angels Network investor presentation

  • Presented at Libraries House/Carbon Trust event

  • Presented at Venturefest

    • won the elevator pitch competition, the first £1000 for the company

The proposal
The Proposal

  • Targets for the business

  • Capital required

    • £500,000 to £1.5m sought

    • More => too much dilution

    • Less => insufficient funds to get off the ground

  • Offer to investors: Investment of £1.3m at a valuation of £2.7m

  • Some background before we tell you what happened next

I a few words about valuation
(i) A few words about valuation

  • Very difficult to put a value on a brand new company

    • No sales, assets, track record…

    • Net present value calculations need so many assumptions they are meaningless

  • At seed round, you can view valuation as a result of % shareholding:

    • The company needs £1.3M

    • The investors agree to provide £1.3M in exchange for 32.5% of the company shareholding

    • Therefore, ‘post-money’ the company is worth £1.3M/0.325= £4M

    • ‘Pre-money’, the value of technology, founders, management, plan and potential is £4M - £1.3M = £2.7M.

    • NB this is ‘fully diluted’ – take care, terminology affects %

  • Before investment this is not a real number, but it is still important!

Post-money value£4M



Ii who has shares in this proposal
(ii) Who has shares in this proposal?

  • Founding academics + University 67.5%

  • Investors 32.5%

  • Small share pool for managers – everyone contributes

Post-money value£4M



Iii timing when to raise external investment
(iii) Timing - When to raise external investment?

  • Valuation is a function of development

  • To get a good valuation you need

    • A good commercial plan, customers, well developed technology, a good team, a strong patent portfolio, and a vision of the pot of gold at the end of the rainbow (and luck)

    • Any gaps reduce valuation because they increase investor risk

    • Achieving all these things costs time and money

  • It may be possible to raise money earlier

    • But then the valuation will be much lower


Shareholding required by investors


Chart shows play-off between value and investor shareholding for a fixed £cash requirement

Technical, commercial and team development

Astp site visit oxford 14 th september 2007 oxford catalysts dr mairi gibbs isis innovation

Full Amount (Exclusive)

Leader but < £1M and non-exclusive

Follower (£150 – 250K)

East Hill



CIX (Cross + Laing)


Isis College Fund (Quester)

Seven Spires

Seven Spires


IP2IPO (but £750K max.)

East Hill


IP2IPO (?)

IP2IPO (?)


Carbon Trust



Other Angels

Back to the story -

Response from investors:(April 2005)

Unblocking the deal
Unblocking the deal

  • Management, management, management

  • Corporate finance or ‘deal-doing’ skills

  • A flexible approach

  • Maintaining trust

  • Managing

    • Investors

    • Founders

    • Customers

    • Spin-out management

    • Lawyers, patent attorneys, etc

The new terms
The new terms

  • Optimising the deal

    • Trading valuation v simplicity

    • Meeting the investors needs

    • The value of a good relationship

  • Maintaining the momentum

    • Managing the investors

    • Keeping control of the situation

  • Completing the spin-out

    • Finalising the licence

    • Popping the cork

Picking up the pace
Picking up the pace

  • Within 2 months of seed investment, decision to go for IPO

    • Cost of £120,000 to abort

    • Very favourable market conditions

    • Development of Board, new members

    • Much work in a short timeframe

  • The pros and cons of flotation

    • Rapid route to significant finance, avoids tyranny of annual investment rounds

    • Puts a very young company in the public eye

  • Further negotiations

    • Pressure on terms of the Isis licence

Astp site visit oxford 14 th september 2007 oxford catalysts dr mairi gibbs isis innovation

Astp site visit oxford 14 th september 2007 oxford catalysts dr mairi gibbs isis innovation

  • Success!

    - £15m raised at a valuation of £50m

    • Value has drifted down, value today £49m

    • Investors are long term and prepared to be patient


  • Patience and belief

  • Invest seed money carefully but don’t be afraid

  • Problems will arise – look flexibly for solutions

  • Academics must provide the driving force

  • Technology transfer can keep the project on track

Oxford catalysts timeline
Oxford Catalysts Timeline

  • 1963 Malcolm Green joins University of Oxford

  • 1999 Dr Tiancun Xiao joins Chemistry Department, Wolfson Catalysis Centre

  • 2001 Researchers approach Isis Innovation – First patent filed

  • University Challenge Seed Fund award £124,500 to finance Dr Xiao

  • 2003 Commercial discussions begun with major petro-chemical companies

  • 2004 June Oxford Catalysts wins Elevator Pitch - Venturefest Business Plan competition

  • Sept Proof of Concept award (£25k) for bench top demonstrator

  • December Dr Will Barton retained as potential CEO of NewCo

  • 2005 January Investment presentations begin

  • March Isis Angels Network investor presentations

  • May Investment syndicate forming

  • September Reversion to IP Group offer

  • November Introduction of Roy Lipski to team

  • December Investment of £500,000 and launch of spin-out

  • 2006 February Decision to float on AIM stock market

  • April AIM float: £15m raised at total post-money valuation of £65m

  • October market cap £52m, 14 employees, new offices and laboratory

  • 2007 July £4m new investment through new shares placing