Edinburgh Forth Photonics recently raised £6.1m funding to commercialise the Dynamic Spectral Imaging System (DySIS) cervical cancer identifier. Investors were London-based NBGI Ventures, Albion Ventures, and Scottish Enterprise’s Scottish Venture Fund.

Forth, a collaboration between the research work of Prof. Costas Balas of Athens-based Foundation for Research and Technology, Hellas (Forth) manufacturing in Greece, is now also located in Edinburgh for its bioscience commercialisation expertise.  It will use the funds to create 10 new jobs locally, marketing DySIS in the UK, and Europe, as well as a US launch and commercialisation, subject to Food & Drug Administration clearance.
                       
Given this collaboration and outcome, why would nine Scottish technology start-ups go to California to meet potential investors in an initiative sponsored by Scottish Development International and organised by the Edinburgh Stanford Link and the Millennium Group?

The answer:  markets, more money and specialist global know-how.

The organisers identified that the Valley’s VC community was fed up paying to attend events, not knowing who is pitching, and enduring start-ups with small skill at presenting their case. The dozen VCs at the Redwood meeting were thus briefed on the ventures (two electronics, one services and six software) with the nine participants groomed to relevant, fast, 20-minute presentations.

The other reason for the trip: “Scottish start-ups have access to some degree of local funding, but generally funding is at a lower level than is seen in the US, while local VCs rarely bring global technology expertise to the table, which is what start-ups really feel they need,” said a spokesperson.

The outcome?   "I really wasn't looking forward to coming down to Redwood City, but this was an outstanding opportunity,” says NEOS Ventures partner Hon Luu. “Great companies with real potential."

"I want to talk with all of them," adds Piers Cooper, partner Kalmund Capital.

“Three VCs asked for more information,” noted Andrew Mulford, founder and CEO of “In Case of Emergency” ICEphone, now dubbed the Swiss army knife of handsets, with military, emergency service and consumer versions. It already has “an order of 64,000 units for delivery in the third quarter of 2009.”

Mulford says his company initially raised Angel investment entirely in London as “Scottish angels are currently somewhat timid.”  He thinks the funding is there, “but it takes longer to complete deals just now.”

Stuart Little of IRT Surveys, promoting clean technology through software as a service that adds values to thermal images for KWh, CO2 emissions and monitory values to aid building surveyors, energy consultants and utility companies assess building energy loss has three interested VCs.

“A good strong response,” agrees Mark Smith, CEO NXVision, offering place-shifted TV viewing, live or recorded, via an embedded software solution.  “We’re talking to two, one of whom straddles the Atlantic, being in both US and UK.”

“We picked up two VCs, one very interested in a very small specific area,” says COO Chris Wright of Mutators Research, which helps customise content for virtual worlds with advanced procedural modelling and genetic algorithms, “to reduce costs and improving efficiencies.” Wright adds “Our markets are US, Japan and UK and currently  finding good rare skills people is far less difficult than it was a year ago.”

The same goes for five-year old Code Play.  Its Sieve C++ multicore programming platform allows a smooth transition from single-core to multi-core processors and graphics accelerators, giving greater processing performance, without the need to rewrite software.

Code Play and many of the nine start-ups used their California time to meet
people and companies outside the VC community. “We had a number of very useful discussions with the VCs,” says VP marketing Mike Breewood. “And also met two consultants who could be useful as representatives.”

“It might be seen as a bad time to be pursue funding,” he reflects “but then, who wants to keep their money in a bank right now? And if you are looking for office space, hiring people or even needing organisers, this is the right time.”

Code Play with around £1m turnover, and good project contracts, also sees Japan as a major market, and has a Japanese country manager.

As yet, technology start-ups do not look to Japan for venture capital.  But most have latched onto the major difference between UK/Europe and US VC expectations. 

“VCs in Silicon Valley have a very different perspective” says Simon Montford, CEO of Snocat. His company offers a social trading network ‘view by invitation only’ (Vibio) application, aimedto make trading on ebay, amazon and craigslist safer and more enjoyable.

He reflects "In America every start-up is expected to believe they can become the next Google or Microsoft. In Europe they want to hear that you will eventually be sold to Google or Microsoft!”                          

                                                                                                   Gail Purvis.