Frequently Asked Questions
Northern Gritstone is a new investment company that is seeking to raise up to £500 million from strategic corporate partners, institutional investors, and qualifying individuals, creating one of the largest dedicated investors into the commercialisation of university science and technology related Intellectual Property (IP) in the United Kingdom.
Intellectual property (IP) refers to creations of the mind such as inventions literary and artistic works, designs, symbols, names, and images used in commerce. IP is a novel or original output of an intellectual activity. It can include inventions, industrial processes, software, databases, written work, designs, and images.
Northern Gritstone has been founded by the Universities of Leeds, Manchester, and Sheffield, three of the UK’s leading educational research institutions. In 2018 the founding Universities came together to create the Northern Triangle Initiative which was successful in securing a £5m award from the Research England Connecting Capabilities Fund (CCF). The objective of the CCF was to provide investment to demonstrate and enhance the viability of new projects generated from University research which were then able to create a significantly increased pipeline of University spinouts. The sharing of best practices resulted in a significant improvement in the productivity and effectiveness of each respective Technology Transfer Office (TTO). By 2020 the CCF had supported up to 20 commercially viable projects, substantially improving commercialisation rates across the three universities, thus generating a sustainable pipeline of University spinouts. Northern Gritstone will build upon this collaboration to provide significant start-up and follow-on funding to support the intellectual property developed at the founding Universities.
University spinouts (also known as university spin-offs) are essentially companies that have been established to commercialise technological inventions developed from university IP and associated research.
The founding Universities recognise they have a key role to play in building a stronger UK economy in years to come and contributing to ‘levelling up’ through their contribution to productivity, jobs and growth. Their collaborative relationships with many of the world’s best-known businesses across multiple industry sectors are helping turn ideas into products and services on which the industries of the future will be built. Up until now, a key constraint for the North has been the lack of availability of investment capital to grow companies based upon academic research in comparison with the south east of England. The current strong pipeline of academic spinouts provides a unique opportunity for investors to address this constraint by supporting and participating in the substantial growth of IP rich companies in the North. By combining the investment expertise and capital provided by Northern Gritstone with the scientists, researchers, engineers, and innovators from the founding Universities we will create a powerful resource to help deliver economic growth in the north of England.
NG is a private English limited company with share capital under the Companies Act 2006. The founding Universities and other investors will hold ordinary shares in the company. The shareholders in NG will appoint a Board of Directors with the founding Universities each appointing a non- executive Director. The Board of Directors will be collectively responsible for directing Northern Gritstone’s operations.
A limited number of Institutional investors, corporations, and qualifying individuals (most commonly, a high net worth individual or a sophisticated investor), will be invited to initially subscribe for shares in NG. NG will not seek investment from potential shareholders whose activities it deems to be prohibited or to do so would materially impair the reputation of any founding University. Retail investors will not be able to buy shares in NG.
Over time, NG is seeking to raise up to £500million from its shareholders.
As founders, the three Universities will be each granted a non-dilutive minority share in NG. The founding Universities will not be required to purchase additional shares in NG. Each founding University has a proud track record of transforming academic research into commercial success through their Technology Transfer Offices (TTOs) who will continue to be responsible for supporting the translation of the findings and ideas from research into the commercial opportunities that NG can invest in.
Collectively, the founding Universities have an annual research income of over £650million and are home to over 8,000 researchers who filed over 180 new patents for the period 2018-2019. This will generate a substantial pipeline of University spinouts for NG to invest in. The management teams at both NG and the founding Universities will be focused on making this a success over the next few years but welcome, over time, discussions with other northern based Universities about improving IP commercialisation rates.
NG will invest in early-stage companies developing and commercialising technology and IP formed at and/or spun out of the Universities of Leeds, Manchester, and Sheffield. NG will also be able to invest up to ten per cent of the money it raises from shareholders in other IP rich companies in the north of England, particularly companies that licence IP from one of the three founding Universities.
There will be no formal limit on the amount of each investment NG makes but it expects invest between £200,000 and £5,000,000 into each company potentially during multiple investment rounds.
The Board of NG will establish an Investment Committee that will undertake due diligence in respect of all proposed investments and make final investment decisions on behalf of NG.
NG will be headquartered in the north of England and will have staff co-located in each of the founding Universities.
If NG has been successful in investing the sums it raises from shareholders, and also builds value in its investments, then there is a possibility the Board of NG will choose to raise further shareholder funds to continue investing in IP rich companies.
Yes. If the company has been founded as a result of research and/or development at one of the founding Universities and the University in question owns the rights over the Intellectual Property developed, then it will be eligible to apply for funding from NG via the relevant University Technology Transfer Office (TTO).
No. NG will consider investing in businesses based on research from any faculty of a founding University.
Any questions on the detail of Northern Gritstone should be directed to firstname.lastname@example.org