Credit due

That the bubble of consumer credit has burst is probably no bad thing: but for businesses, finance is their lifeblood, especially for the fledglings with no track record and precious few assets.

The Oxford Investment Opportunity Network (OION) can bridge that finance gap, offering 13 years of experience of matching companies with investors.

Known universally as ‘Onion’, OION is now actually three investment networks— OION itself, Oxford Early Investments (OEI) and Thames Valley Investment Network (TVIN).

OION concentrates on high technology businesses, mainly life sciences but also precision engineering.

While medical devices and diagnostics feature strongly in their portfolio, drug discovery companies are now far less prominent.

OEI follows the OION model, but as its name suggests, is about pre-seed and seed capital. These high-tech businesses revolve strongly around intellectual property and patents.

TVIN covers fast-moving consumer goods and lifestyle companies.

Eileen Modral is network manager, responsible for OION and OEI, while TVIN has its own manager, Leo Dunn.

Ms Modral said: “OION was set up by Oxford Innovation as part of the drive to commercialise research. It took about six years to get established and create a network of business angels. We do have links with venture capital organisations, but most of our funds come from angels.

“With the recession, the last eight months have really seen some changes. Investors are taking far longer to invest, often because they have earlier investments which they need to continue to fund, while they have also seen a fall in their own liquidity.”

The same problems affect venture capital firms and raising new funds is problematic, so the appetite for investors to raise cash in this way has diminished.

OION helps secure funds between £200,000 and £1.5m, for firms that are more developed, revenue generating and ready for the critical push to the next step.

Thanks to a major institution (which prefers to remain anonymous) offering match funding over the last year, the network has achieved a record number of deals and attracted new investors to OION.

Deals range from £25,000 to Bioco, a company which helps small biotechs to succeed, to £530,000 to Axon, which offers diabetes care. In between these two figures are a number of fundings around £250,000.

Ms Modral sees about 600 business plans a year. She conducts a sift, passes some to TVIN, then contacts those of interest.

Companies learn of OION by word of mouth, from investors or from the website of the British Business Angels Association, of which OION is a member.

Some companies are not investor ready, so Ms Modral will keep in regular touch to check progress.

And not all the companies are from Oxfordshire — some are from across the UK and also Europe.

Many cross-border relations are being established. Companies with their headquarters in UK may conduct research elsewhere.

Investors are increasingly building contacts across the continent, sharing expertise and reducing risks.

The network holds 21 meetings a year featuring five companies in each meeting. It falls to Ms Modral to ensure no two companies at any meeting are in the same field.

Prior to a meeting, the companies are given a dry run in front of a panel of some of the network’s investors, who critique a focused 10-15 minute presentation. There is a fee for any company presenting — £400 for OION, £300 for TVIN and £200 for OEI.

The network has 115 investor members, of whom about 50 are active. OION and TVIN also have business members, usually professional firms such as accountants or lawyers.

Ms Modral added: “The number of business members has decreased a lot. It costs £1,000 a year to join and the firms need to see a good return on that investment.”

OION also has sponsors including the National Endowment for Science, Technology and the Arts (NESTA).

OION works closely with Isis Innovation, Oxford University’s technology transfer office, and holds one special investors’ meeting a year with Isis.

This allows OION to help any potential spin-out firms to become investor ready.

Success brings it own rewards and in July, OION was named Angel Network of the Year at the British Business Angels Association annual awards.

Ms Modral said: “A total of 21 companies raised £4.5m investment in a tough climate and leveraged an additional £10m from other sources in consequence. We’re pleased with that.”