Keeping It Simple Is Key To Funding Success
**Hot tips to R&D funding – what works and what
**Technology R&D – can be a myriad of false starts and forked roads for businesses
Navigating a successful path through public funding for industry R&D is just a matter of keeping it simple, according to Technology New Zealand Advisory Committee member John Cunningham.
The key is a simple equation that Mr Cunningham says puts paid to criticism that industry R&D funding is 'just too hard.’
“If a company can’t describe in clear simple terms how it will grow and what its proposed technology development programme will do, then chances are that development programme hasn’t been thought through enough,” he told a recent seminar of Technology New Zealand TechLink advisors.
Mr Cunningham said many companies said they found the Technology New Zealand application process daunting. “It is rigorous and even demanding, but when you’re investing taxpayers’ money you need to be totally convinced that the company has given the process detailed attention.”
Mike Markham, of Auckland-based Epic Flexible Packaging, recently gained Technology New Zealand funding for development of the company’s technology in the industrial, horticultural and food packaging sectors. “We found the process quite straightforward because we had good existing records. The most difficult part was trying to convey the technical process in layman’s terms," he said.
“Would we have gone ahead with the project without funding? In all probability, yes. We had assessed the risk and decided it was important to our company’s growth strategy.”
Mike Johnstone, founder of hot new software company KeyLogix, said Technology New Zealand funding helped the company by providing funds to develop its ActiveDocs software. It also, importantly, taught the company valuable lessons in clear thinking.
“It forced us to define and articulate the route to market as well as identify potential hurdles that we were likely to faced. We can use those lessons to confidently pitch to venture capital managers internationally for our next round of funding.”
Companies can work with Technology New Zealand staff or the nation-wide group of TechLink advisors who guide companies through preliminary assessments and help develop proposals for funding.
The Technology New Zealand Advisory committee considers around 300 applications a year. Last year it recommended investment of over $18 million to businesses.
“Obviously there are some clear signals that we (on the Advisory Committee) look for in an application,” said John Cunningham. “Firstly, identify the technology gap. What is the problem? What is the company prepared to put up in terms of money and people resource? And where is the risk? If the company is not putting up some cash, then its not something that Technology New Zealand should be supporting.
“One thing we frequently find missing is the
‘kill event’”, he said.
“This is the point at which a company says – well if it doesn’t work as we think, by this point, then we stop the project. We find companies have amazing faith in everything going right, whereas our experience shows that technology R&D can be a myriad of false starts and forked roads.”
According to Mr Cunningham, companies which put up a simple project plan aligned to a business plan are most likely to succeed.
The project plan should cover areas such as events and milestones, the technology gap, people and skills, detailed costs, an IP agreement and the amount of cash from the company. A business plan should address the people, technology, market channels, finances for at least three years out, and project benefits.
Tony Hadfield, manager of Technology New Zealand, says companies who think they may be eligible for funding should contact a TechLink consultant or a Technology New Zealand investment manager. “All of the preliminary information is on the website (www.technz.co.nz),” he said.
“We want to debunk the myth that it is a difficult process, and replace it with a better understanding of what we’re looking for and how we can help.”
For more information:
*Tony Hadfield, Technology New Zealand at the Foundation for Research, Science and Technology, 04 917 7812, 025 454 095, www.technz.co.nz
*John Cunningham, 09 303 3488 xt 105, 025 814 614 a/h 09 631 7977
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