innovation &technologyconference - april 2014
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Innovation &
Technology
Conference
April 2014
www.francisclark.co.uk
Agenda
• Welcome & Introduction
• Facility Tour
• Coffee
• Attracting & Retaining Key People
• The Witty Report
• An In Depth Patent Application Case Study
• John Piper
www.francisclark.co.uk
The Importance of Innovation
• An ‘export led recovery’ (George Osborne - 2010)
• The Dyson Report (2010)
• BIS Internationalisation of Innovative SMEs (2010)
• BIS Strategy for Growth (2011)
www.francisclark.co.uk
Innovation & Tech Business Lifecycle
www.francisclark.co.uk
R&D / Patent Box Update
• Increasing number of claims in ‘food and drink
technology’
• Continued confusion around ‘notified state aid’
• Capital v revenue on software guidance to be
updated
• Increasing number of patents being applied for
• Limited interest in ‘Patent Box’ by SMEs
• EU review of Patent Box in progress
www.francisclark.co.uk
Innovation & Technology Conference
Facilities Tour
1. Marine Building
2. Electron Microscopy
Attracting and Retaining
Key Members of your Team
Andrew Squires
April 2014
www.francisclark.co.uk
‘The Package’
• Pension payments
• Employee medical screening
• A mobile phone
• Childcare vouchers
• Parking at/near work place
• Cycle for work
• Training
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‘The Package’ – continued…
• Company cars
• Loans to staff
• Suggestion schemes
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Background
• Cabinet Office commitment to create and stimulate a “John Lewis
economy”
• Clegg: “one of the Government’s top two priorities for growth”
• Cass Business school report shows where employees own a stake:
• higher rates of staff satisfaction
• lower rates of absence
• higher rates of staff loyalty
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Successful Start-ups
• Often grow quickly
• Plans to sell
• Key staff need to stay on side
• Important in the early days
• Staff need to be kept, and motivated
• Employees share ownership seen as key
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Corporation Tax Relief
• From 2003
• Transformed ‘tax planning landscape’
• Relief is
• amount of share option gains
• amounts upon which employees suffer income tax
• Relief even where no income tax charge
• Comprehensive relief but traps exist
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Reasons for Adopting an Employee
Share Scheme
• Incentive reasons
• “High-tech” or “Low-tech” activities
• Need to attract and retain key individuals
• Something more than salary
• “Golden handcuffs”
• Leading to a shared vision of the future
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Reasons for Adopting an Employee
Share Scheme
• Participatory reasons
• Short-term vs long-term
• take home pay
• long-term objectives of the company
• “a stake in the business”
• more likely to acquiesce to decisions of management
• own long-term prospects closely tied to shareholders
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Reasons for Adopting an Employee
Share Scheme
• Opportunistic reasons
• Realisation of capital
• sale to an employee trust
• passing of shares to employees
• “good employer”
• use of company funds – with a tax deduction
• Management buy-out
• establish an employee trust
• shares to be held for employees generally
• helps to seek support of the workforce
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Evidence of Success
• Britain’s most successful companies cite employee
ownership as a key factor
• Lessons to be learned:
• breaking down the “them-us” divide
• success dependent on nature/extent of employee
communication
• current perception more important than tangible results
• most effective when part of ‘culture’ generally
• Pay is as much about fairness and recognition as it
is about incentive…
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Some observations
• Most people chose fixed pay over a bonus of a higher value
• Employees need to value the chance to participate
• Make it easy!
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“Remuneration Package”
• Reward and motivation key, but what about security,
a sense of participation and incentive to stay…
• Typical package:
• cash element, fixed and variable
• short-term focus cash incentive
• medium-term focus cash or share incentive
• security benefits
• perks
• other benefits
• Financial commitments and lifestyle aspirations
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Enterprise Management Incentive –
The basics
• EMI share options
• Tax favoured scheme
• No IT or NIC charge arises at grant
• No IT or NIC at exercise if option price is not less than MV
at grant
• CGT at 10% on disposal
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Enterprise Management Incentive –
an example
Lee starts working for Westwood Limited in 2013. The
company has limited funds but sees Lee as key to its future
development. It grants Lee options over 5,000 £1 ordinary
shares at an option price of £1/share (the agreed MV at
grant).
He exercises the options five years later, just before the
company is sold, when the share value is £10/share. He pays
£5,000 for the shares and sells them shortly afterwards for
£50,000 – the gain is taxed to CGT and he will qualify for
Entrepreneurs’ Relief – a CGT tax rate of 10%.
The company can claim a deduction for CT purposes equal to
the market value of the shares less the amount paid – here it
would be £45,000.
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Enterprise Management Incentive –
The company
• It must carry on a commercial ‘qualifying trade’ – some
business activities are excluded
• The company must have:
• gross assets of < £30million
• < 250 full-time equivalent employees
• The company must not be controlled by any other company
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Enterprise Management Incentive –
The employees
• Employees can qualify for EMI options if:
• they are employees of the company (including directors);
• they have no material interest in the company; and
• They work for the company for at least
• 25 hours per week; or
• 75% of their working time
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Enterprise Management Incentive -
The options
• The options to purchase must be:
• to acquire unredeemable, fully paid-up, ordinary shares
• exercisable within 10 years of grant non-assignable
and they may be:
• issued with performance conditions limiting the right of the
employee to exercise them (e.g. the company achieving a
specified share price/turnover/profit)
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EMI and Entrepreneurs’ Relief
Recent changes
• What was the problem?
• Welcome changes:
- No 5% requirement
- ER accrues one year post option grant
- Still need to be employed
- Trading company requirement
• For ‘ees getting <5%?
• Issue immediately exercisable EMI options
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Share schemes
• There are a number of tax-advantaged schemes available
• EMI is least restrictive
• All share/share option schemes are intended to be used as a
way to ‘incentivise’ employees over a medium to long-term
period
• Some schemes can impose a relatively heavy administration
burden (e.g. SIPs) whilst other (e.g. EMI) come with much
lower requirements
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Share schemes- CSOPs
• Popular if do not meet EMI conditions eg company’s size,
qualifying trade or control/ownership
• Company Share Option Plan (CSOP) is an alternative
• Generally whilst a greater range of companies can use a
CSOP, an EMI scheme is more flexible concerning
participants, targets etc
• Tax benefits of a CSOP are very similar to those of an EMI
scheme
www.francisclark.co.uk
Share schemes -
‘Employee Shareholder’
• Employees can ‘surrender’ some employment rights in exchange
for shares in their employer
• Individuals can receive between £2,000 and £50,000 of shares
which will be exempt from CGT on sale
• No exemption from IT and NIC on issue – an immediate tax charge
may accrue.
• Only the first £2,000 worth of shares will be IT & NIC exempt.
• For CT purposes a CT deduction will be available, based on the
value of shares acquired by employees.
www.francisclark.co.uk
Other arrangements
• Deferred payment plans
• Growth shares
• SIP
• Schedule 33 Finance Bill 2014
www.francisclark.co.uk
Innovation & Technology Conference
Digesting The Witty Report
Katie Farley – Francis Clark
www.francisclark.co.uk
Digesting the Witty Report
• ‘Universities generating cutting edge research and
resulting insights may be likened to the tip of an
arrow, with the arrowhead behind it representing
the economic activity enabled by research-led
innovation. Maximising the size of these
arrowheads and their economic benefit to the UK,
specifically, is fundamental….’
Review Preliminary Findings, July 2013.
www.francisclark.co.uk
Digesting the Witty Report
• UK universities have ‘an extraordinary wealth of
ideas, technology and human energy – much of
which is world leading and capable of seeding not
just new companies but whole industries.’
• But without better-focused funding, organisation
and collaboration, he says, there is a risk of delay
and of ‘British inventions building foreign
industries.’
www.francisclark.co.uk
Digesting the Witty Report
• Sir Andrew Witty, CEO GlaxoSmithKline
• October 2013
• Review of Business-University Collaboration 2012 Sir Tim Wilson
• Lambert Review of Business-University collaboration 2003
• Annual investment in research in UK universities and research
centres excluding businesses’ internal spend is circa £10 billion
• Universities should be incentivised pro-actively to seek out
innovative and potentially innovative SMEs and to support them
with technology, expertise, talent and know-how
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Digesting the Witty Report
• Strong record in university-business collaboration.
The World Economic Forum (WEF) ranks UK 5th in
the world and 2nd in EU for university-business
collaboration in R&D
• Universities have bid for, and applied, over
£300million of ERDF funds since 2007, frequently
in multi-party engagements with businesses and
others.
www.francisclark.co.uk
Digesting the Witty Report
South West Examples
• GAIN growth hub founded by Plymouth University, with Plymouth City Council and
Tamar Science Park. Brings together more than £120 million of business infrastructure,
world class research facilities and expertise in a network focused on growth and
investment.
• SETsquared is a collaboration between the universities of Bath, Bristol, Exeter,
Southampton and Surrey which partners in enterprise activities. It currently supports
approximately 250 technology start-ups and has given birth to around 1,000 high-tech
start ups since its inception ten years ago. In July 2013 the University Business
Incubator Index ranked it the best in Europe and fourth in the world.
• University of West of England plays a leading role in ERDF-funded regional innovation
networks in the South west supporting SMEs in Aerospace and Advanced Engineering,
Creative Industries, Biomedical Sciences, Environmental Technologies and
Microelectronics; more than 700 businesses have been supported over a 3 year period.
Expert Advisory Group
Professor Wendy Purcell, Vice-Chancellor and President of Plymouth University, Board
member of Heart of South West Local Enterprise Partnership
www.francisclark.co.uk
Digesting the Witty Report
Recommendations
• Increased funding for ‘Third Mission’ activity
• Increased Reporting on Research and Knowledge Exchange
• Greater Use of Metrics to Identify Areas of Research Excellence
• Greater Emphasis on Engagement with SMEs
• New Stakeholder Relationships – LEPs and UKTI
Universities at the Heart of Economic Growth
Delivering Witty
Adrian Dawson
Our mission
• To be the enterprise university
– - build and sustain connections with local,
national and international partners to
enrich our academic experience.
– - raise aspiration amongst groups under-
represented in higher education
– - provide opportunities for our students,
staff and the communities we serve
through economic development, social
inclusion, community outreach and
strategic partnerships.
Our tools:
• Expertise & knowledge – 800 academics and
technical specialists
• World class facilities (Coast, ISO accredited labs)
• Resources – 30,000 Students, plus graduates
Economic Growth
Teaching Students
=
Skilled workforce
World-class Research
=
Innovation & Business
Development
Civic leadership & Community
=
Place
Universities’ contribution to economic growth is multi-faceted…
Creating innovation environments
• Innovation Centres
• Formation Zones
Driving Innovation through talent
Knowledge Transfer Partnerships
Funding Innovation
Plymouth University & Western Morning News
Growth Fund (PWGF) & now GAIN Growth Fund
The Growth Acceleration & Investment Network
• A community of support providers that brings into one place everything and everyone that a business needs to grow;
- supports people with ideas, businesses that want to grow, and investors
- joins up physical assets ensuring they are more than the sum of the parts;
- connects universities and colleges, innovation centres and science parks, centres of expertise and research with the region’s business base;
- Adds value to existing networks and projects
POWER BUSINESS
DYNAMIC WITH GRADUATES
YOUR
Our aims:
• Supporting local business to innovate and grow • Providing opportunities for graduate talent in
the South West • Encouraging more interaction and collaboration
with the Knowledge Base
Unlocking innovation
Meet RouteShoot
They developed an innovative app which enables users to create their own GPS referenced video with multiple potential business customer applications. However they realised they needed to invest more time, resource and expertise into their Android platform. That’s where Ben comes in! He’s a Computer Science graduate from Plymouth University. We worked with RouteShoot to shape the job description and manage the recruitment process and he started in post with them in February. In the short time that he has been with the company his energy, knowledge and work ethic have transformed the capability and response times of the business, helping get them onto the front foot in a competitive market
“We’re excited about our future. As a business experiencing such growth and interest in our product, Grads for Growth’s help has been invaluable and we look forward to their further support” Gary Wilson, MD
What’s in it for me?
• We’ll help you to define and recruit the role, advertise, shortlist and interview
• We offer a dedicated business development team as well as a significant project investment fund of either £1800 or £2400 depending on the length of the project
• You’ll also enjoy access to the latest academic thinking through our relationships with leading universities in the South West
GET IN TOUCH TODAY TO TALK TO US ABOUT HOW WE CAN DRIVE YOUR BUSINESS FORWARD.
T: 0845 600 3660 E: hello@gradsforgrowth.co.uk Visit: www.gradsforgrowth.co.uk
Innovation & Technology
Conference 2014
Case study – a patent application
in depth
Dr Matthew Greenwood - Bryers
A patent is an intellectual property right
that protects inventions with a monopoly
that lasts up to 20 years.
“Pat-ent” or “Paytent”?
Pipex Limited was established in 1975 by
its current Chairman Mr Alan Smith MBE,
and today remains a successful privately
owned, family run, specialist UK based
manufacturing, engineering & construction
business.
www.pipexpx.com
MARRS® OFFSHORE
Advanced FRP Phenolic Handrail
Systems
© Pipex Ltd
© Pipex Ltd
STAGE 1
Information Collection
1. Corner Connectors
2. Adjustable Top Rail Connector
3. Offshore FRP Rail System
4. Continuous Handgrip
UK Patent Application filed 8 February 2010
STAGE 2
First Anniversary – 8 February 2011
PCT International Patent Application filed 2 February 2011
The Patent Cooperation Treaty (PCT) assists applicants in
seeking patent protection internationally for their inventions.
By filing one international patent application under the PCT,
applicants can simultaneously seek protection for an invention
in 148 countries throughout the world.
STAGE 3
PCT National Phase
May 2012
UK National Phase Patent
Application filed 16 May 2012
Request for accelerated
prosecution
CLAIM 1
1. An offshore handrail system
comprising a top rail and one or
more support posts, in which the
rail and post/s are formed from a
phenolic-based FRP material.
Stage 4 - June 2012
Patent Office Examiner issues her first
Examination Report, including a
discussion of the “prior art”
June 2012
Conversations with the Examiner
Arguments used:
1. The prior art shows FRP handrails, but does not show
phenolic-based FRP handrails or their use specifically for
offshore applications.
2, It is surprising that phenolic-based FRP can be used for
handrail structures.
3, Commercial success – the product was hugely successful
4. Long-felt want – the success was immediate, suggesting
everyone had been waiting for this product and had not been
able to acquire it previously.
Success!!!!!!!!
August 2012
Useful tips illustrated by this case:
1. Put as much information as possible in the
application
2. The PCT system is incredibly useful
3. Accelerated prosecution can be very useful
and it really works in UK
4. Patent Examiners are real people – don’t
be afraid to speak to them and be nice to
them!!!
5. Use “secondary indicia” to help
Any Questions?
Contact Details:
Dr Matthew Greenwood
Bryers
7 Gay Street
Bath
BA1 2PH
mgreenwood@bryerlaw.com
01225 428877
©
From F1 to J1 John Piper
Founder, Pipermoto
Presentation to Francis Clark 8th April 2014
©
— Background: where I’ve been to get here……..
— Pipermoto: a new start……..
Introduction
©
The working weekend
— fresh from Uni with a
degree in mechanical
engineering
— age 25yrs beer money
mechanic
©
It never rains…..it pours
©
— F3: my first proper job in motor
racing
— F1 mechanic to Giacomo Agostini
in a privately run Williams
©
From the toolbox to the drawing board
©
— 5 years as design engineer at
Williams'
— Prototype Metro 6R4 Group B rally
car
©
“Making plans for Nigel!”
©
— F1 gearbox design
— Race engineer during Mansell’s
debut season
©
Colourful work
— Benetton F1 Gearbox design for 4
seasons
— Suspension damper design and
supply
©
©
Finns ain’t what they used to be……
©
— Founding Technical Director
Prodrive Engineering
— Design of the first Subaru WRC 4
wheel drive system
©
Going the distance
©
— Recruited by Ross Brawn as Chief
Designer for the TWR Jaguar Gp C
sports cars
— Winning Le mans in 1990 and the
World Sportscar Championship
1991 with the ground breaking
XJR14
©
Bearing the cost……
©
— Race engineer for the Harrods
McLaren
— On the podium at Le Mans
©
Deeper Blue
— Concept car comissioned by Jac
Nasser
— Winner of the ‘Best Car in Show’
©
©
Racing from the front
©
— Panoz GT1 Le Mans car
— Technical Director of Reynard
Special Vehicles
©
“ I don’t have the foggiest”
— Set up Piper Design in London
— Foggy Petronas World Superbike
©
©
Consuming interest
— Cadillac concept car , Electric Smart
Car, M&S fuel saving aerodynamics,
Rolls Royce interior gadgets, Virgin
Atlantic lay flat seat, and more…….
©
‘Salt fever’ - 350mph at Bonneville in a JCB
©
— Bonneville Salt Flats
— Setting a new world record using
two JCB digger engines
— Chief Designer of the worlds fastest
diesel powered car
©
“Don’t stop me now..”
1. bullets
2. Compile styling design
direction
— Bloodhound SSC Engineering
Director for the first 21/2 years
— Setting up the engineering team and
design base in Bristol
© ©
— Non Executive Director on the
Marussia F1 board.
— Technical representative for the
LDC investment
Keeping an eye on the cost
©
Faster than a Veyron Cleaner than a Prius
©
— Lead Engineer setting up the
Powertrain Team
— 0-60 3.4 seconds
— CO2 28g/km
©
©
The Marketplace – the industry
©
— In contrast to the overall downturn in sales
since 2008 premium bikes are on the increase.
— There is an appetite for premium, specialist,
limited edition bikes as demonstrated by the
launch of the Lotus C-01.
©
The Marketplace – the bikes
— Greater appreciation for artisan hand built
products – something that hasn’t come off a
production line.
— A desire for something personal, unique to me.
— Major bike manufacturers are now
commissioning studies from artisan makers e.g.
Yamaha and Wrenchmonkees
©
— Founded in 2012
— We specialise in the design and manufacture of hand-built motorcycles and
scooters.
— Our approach to bike-building combines the craft of an artisan with the
precision engineering and perfection of top level motor-sport.
— We want our products to be desired by those who share our passion.
Everything we do is designed and detailed with the enthusiast in mind.
— We treat every product opportunity as bespoke. Starting from scratch,
designing and sourcing the best components to deliver each and every bike.
About us
©
Our position
©
NO FRILLS/PURITY
PRAGMATIC
HUMOUR &
INTEGRITY
DESIGNED TO PERFORM
BEAUTIFULLY FINISHED
HAND BUILT FORM FOLLOWS FUNCTION
— Our mission is to create the most
beautiful and most capable bikes
on the road.
— Always faithful to what we believe
to be the motivating forces behind
a life on two wheels
— We are absolute purists in our
pursuit of performance handling.
— We are proud to be part of a great
British engineering tradition
©
The most beautiful and most capable bikes on the road. What we do.
©
©
What we do
©
We offer full bike design from concept thru prototype and validation to low
volume manufacture. Including:
— Styling
— Clay and digital modeling
— Frame and mechanical parts engineering CAD design
— Suspension kinematics
— Aerodynamics
— Systems (fuel, cooling, exhaust, electrical/electronic) engineering.
©
Concepts
©
1. Define vehicle
specification
2. Compile styling
design direction
3. Originate design
ideas
4. Establish
mechanical
package
requirements
5. Draw sketch
proposals
6. Establish
ergonomic
positions
7. Create styling
renderings
©
Design Development
©
1. Establish basic vehicle
layout geometry
2. Analyse suspension
kinematics solutions
3. CAD package
mechanical
components
4. Create design ‘hard
points’
5. Develop systems (fuel,
exhaust, cooling, air-
box) design
6. Draw clay model
armature
7. Develop styling and
mechanical design
8. Produce detail manu-
facturing drawings for
prototype parts
©
Prototype Manufacture
©
1. Build and refine
styling clay
model
2. Lasers scan clay
to create surface
CAD data
3. Prototype mould
bodywork
4. Manufacture
prototype parts
5. Prototype vehicle
build
©
1. Circuit Testing
2. Aero testing
3. Road riding
©
Pipermoto J1
Our first product
©
©
The Spirit of Scootering
— Inspired by the past without the desire to
revisit or recreate it.
— By design, reflect the aspirations and
expectations of the modern rider.
— You can have a beautiful machine without
sacrificing enjoyment or functionality
— The simplicity, convenience and spontaneity
of a bike that can take you anywhere at any
time.
©
Our first product
— A true ‘Super Scooter’
— Classic step-through layout
— 690cc 70Hp engine
— 17” wheels
— 52deg lean angle
— 50/50 weight distribution
— Sub 185kgs
— Composite bodywork
— Upside down forks
— Low weight Ali rear swingarm with pushrod
operated three way rear spring damper
— Brembo brakes
Pipermoto J1
©
Pipermoto J1
©
Realisation 1. Rear
suspension
2. Bodywork fit
3. Exhaust, fuel
&gear systems
4. Frame/Front
suspension
©
Business start up – the challenges
©
- Funding the project myself.
- Tackling every aspect of the bringing the
business to reality.
- Progressing from prototype to production.
- Francis Clarke have supported me with
company set up and R & D Tax planning.
©
Taking orders today!
Thank you
www.francisclark.co.uk
Questions
www.francisclark.co.uk
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