Qi3 – Quality, Insight, Integrity & Innovation - UNITING TECHNOLOGY & MARKETING

Tag: sustainability

Here’s to the future of low energy lighting systems

I’m delighted to confirm today the latest investment led by the team of angels at Qi3 Accelerator; this time we’ve led a £1.1m syndicate investment in a company called iSotera.

iSotera has developed a novel control power distribution and control network for the next generation of LED lighting systems.

My colleague Paul Anson discovered iSotera over a year ago, and we have been working with the founder Marc Ottolini ever since in order to help him bring his business to an investment-ready state , providing input to all aspects of the business plan.  Peter Cowley of Martlet and our friends at 42 Technology have been instrumental in the technical evaluation. We introduced iSotera to a number of other Business Angels, and particularly significant was a presentation to London Business Angels in September 2011.  This brought together a syndicate of over 20 parties, including our colleagues at Synergy Energy and enabled co-investment by the Low Carbon Innovation Fund. We’re also delighted that Moonray Fidelity has joined us in this important investment.  Note that Qi3 Accelerator is not a fund, it’s a group of independent angels led by Tim, Paul and me, so an investment like this requires all of us to feel persuaded to commit our cash to worthwhile businesses.

So why iSotera? We all know that LED lighting is going to take a significant market share over the next decade, replacing incandescent lighting and compact fluorescents.  iSotera has spotted the opportunity in the more prosaic area engineering of power distribution and control for LED lighting.  iSotera’s technology enables more efficient energy usage, lower cost of ownership and easier installation, revolutionising the cost and energy impact of lighting installations.  So rather than investing in LED technology, we’re backing a system that makes it greener, cheaper and easier to install.

Marc Ottolini is a superb enthusiastic serial entrepreneur and has shown tenacity and determination to drive the company to become a significant market player.  Several leading lighting distributors are queuing up for the launch later this year of the first production systems.  Backing a great technology and a great team with our financial resources and commercial support feels to me like a winning mix.

The Qi3 Accelerator team will be playing an active role in the development of iSotera, with Paul, Nat Billington (Synergy Energy) and me all taking board positions.  We look forward with pleasure to the development of another UK High Value Manufacturing company.

Why we’re passionate about High Value Manufacturing

After this week’s announcement of the Qi3 Accelerator Bootcamp, friends are asking me why we’re doing it.  Are we mad? How will we make money? And, above all, why High Value Manufacturing (HVM)?

The simple answer is that we’re doing it because we see the need!  After reviewing nearly 400 prospects, we see a common set of areas in which businesses need to improve if they wish to attract investment.  Let’s be clear here, I’m not just talking about seed stage ideas.  I’m expecting that the bootcamp will be most attractive to young established businesses looking for early or expansion stage capital.  We’ll be helping on all aspects of engineering businesses, from managing technology and product development, go to market strategy, finances and Intellectual Property.

When I attended the NESTA Startup Factories conference  last summer, it became obvious to me that, whilst Accelerator Programmes were flourishing in the software and Internet space, few people had tried them in ‘harder tech’.  When we set up the partnership with Cambridge’s ideaSpace, it seemed natural to run a bootcamp as a one-off pilot to test our evaluation process and the concept of such a programme.  We aim to support 8 businesses with tough love through an intensive 3-day process, and we’ve attracted a range of top notch coaches and mentors to get the best out of this short, sharp shock.

But above all, it’s about having fun working with ambitious people in the field I love.  I grew up at Oxford Instruments, a mid-sized engineering company where the customer was king and the love of technology and manufacturing was deeply ingrained.  I’ve spent my life selling and marketing other people’s technical inventions around the world.  For me, HVM means making real engineered products, be they destined for environmental sustainability, healthcare, industry or defence.  My pleasure as an investor is seeing engineering and commercial jobs created here in the UK, and products exported across the globe.

We’ve been fortunate to attract partnership from ideaSpace, sponsorship from Harrison Clark, Williams Powell, Synergy Energy and Wren Capital, and support from NESTA and the Technology Strategy Board.  Bootcamp participants will have to contribute a token amount towards their accommodation in Cambridge’s lovely Madingley Hall, and we’ll make up the balance of the costs ourselves.  We are not seeking equity stakes in the companies that participate, although we’ll naturally be keen to see if they are attractive investments at the end of the process.

So are we just do-gooders?  Well perhaps.  I see it as a superb experiment, an opportunity to help some great businesses, committed entrepreneurs, and work with experienced mentors whilst having great fun.

To join the bootcamp apply here.  It’s a one-off; entries close on 4th May and the bootcamp will be held on 23rd – 25th July.

My next posting will be the one about the aubergine…

Qi3 Accelerator leads syndicate investment in Phase Vision

It always takes far longer to close a deal than I imagine at the outset. There’s always some hiccough or another that introduces a few weeks of delay.

Anyway, I’m delighted to be able to confirm today that Qi3 Accelerator, working with existing investors Octopus Investments, has completed a £1.5m investment in Loughborough-based industrial inspection business Phase Vision.  I’ve joined the board as a non-executive Director, to support the development of the business in the aerospace, automotive and nuclear markets, and to represent our substantial Business Angel consortium.  Our syndicate comprises a wide range of Cambridge, London and East Midlands based investors.  Great task sharing between Tim, Paul and me, together with support from other investors, made this a real team effort.  Most importantly, the management and staff at Phase Vision have been a pleasure to work with throughout, seemingly unflappable in the face of our persistent questioning.

And this is why we started Qi3 Accelerator; to find great British engineering companies and provide them with the financial and management support they need to accelerate their development.  Phase Vision offers for me the perfect combination of a strong team, a super product that benefits efficient manufacturing and reduces environmental impact, and global export opportunities.

I’m sure there will be plenty of problems along the way – it’s a risky game investing in High Value Manufacturing, particularly in the midst of a prolonged economic downturn.  But in life you have to choose whether to be a spectator or a doer, and I hope to see Phase Vision do well.

Saying no to Green Energy investments

Starting a new renewable energy business is a tough call.  After only a few months of angelhood, I’ve already come across at least two dozen pre-revenue wind, wave and solar power technology companies.  Each one offers its own version of “we’ll make it cheaper and our business model will thrash the competition”.  Each one (so far) has been accompanied by insufficient understanding of the real issues with new technology adoption; inertia and technology substitution.

By inertia, I mean the natural tendency of customers to continue to buy what they were buying before.  The latest version perhaps, but it takes a determined effort to engender a paradigm shift in purchasers’ attitudes.

The perennial myopia of the focused inventor leads to a lack of awareness of alternative ways of achieving the same goal.  Just because you think you have the best widget, others won’t necessarily share your view.  There are always technology substitutes that will be equally valid in the mind of the customer.

I spent nearly half an hour on the phone today, trying to help an entrepreneur to realise that a more thorough approach to competitive analysis was vital.  A proper understanding of direct and ‘class’ competition should lead to a much more realistic strategy and a firmer basis for competing.

In each of these renewable energy markets, and at each level of power generation, there are now between a handful and tens of companies already selling their wares.  It’s the challenge of the prospective new entrant to convince investors that his approach is rigorous and likely to succeed.

Concentrating on Photovoltaics

It’s all very well having a grown-up staged methodology for evaluating investment propositions.  But eventually you reach the end of Stage 4, and have to decide whether to sign a cheque or not.  I gave myself the weekend to read through the background material and my due diligence assessment.  And then took the plunge.

On-Sun Systems is the newest company in the Anglo Scientific incubator.  The company is developing a low cost tracking mechanism for Concentrated Photovoltaics (CPV).  Their panels will be inexpensive, flat and capable of being roof-mounted.  In the 25% of the world solar market which receives sufficient direct sunlight for CPV to be worthwhile, their panels should deliver a competitive amount of solar energy for a given roof space and per dollar invested.  Most importantly, as a lapsed physicist who has spent my lifetime working with semiconductors, I love the fact that this business is developing an opto-mechanical tracking mechanism and not semiconductor materials.  There are already several suppliers of triple junction photovoltaic cells, and these will be merely a component in the assembly, rather than the focus of investment for On-Sun.

Above all, I like the people.  Every member of the management team has been approachable, professional and all of my (numerous) questions have been answered promptly and to the best of their ability.  I hope I’ll be reading these words with the same feelings in 3 years, but I’m pleased to be supporting the development of this business and look forward to their quarterly progress reports.

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