UT spin-off program blog

At the event held in the beginning of May, upcoming deep-tech companies from the universities of Cologne, Kuopio and Tartu were able to validate their ideas in front of international experts and to exchange experiences with each other. The feedback and advice from international experts is very valuable, as it gives the teams an opportunity to further plan their activities and to enter foreign markets with better preparation.

The event was attended by two teams with a deep-tech business idea and two experts in the field from each university. The University of Tartu was represented by Voogteater and Silklytics teams, and Aivar Pere, lecturer in entrepreneurship,  together with Vaido Mikheim, deep tech project lead from Startup Estonia, as experts. The event was made possible due to the University of Tartu's membership in the GATE1 consortium, which connects European universities, uniting the two mentioned universities as well.

“International knowledge sharing and networking events are very important and I hope to see them more and more happening and having talked about. The opportunity to get feedback from people who are familiar with different markets, to see what developments are being done in other universities and to grow your international network, each aspect is valuable in isolation. To get all three in one set - I definitely recommend that the organizers continue with this type of activity and that the participants seize the opportunity, ”commented Mikheim.

Similar events for the spin-off program will be organized regularly with the members of the GATE-1 consortium in order to provide an opportunity for more teams to receive international feedback. The exact time of upcoming events is being coordinated.

The GATE-1 consortium, initiated by the University of Tartu, was formed three years ago and includes thirty entrepreneurial universities from all over Europe today. The aim of the union is to expand deep-tech innovation in Europe, to accelerate the development of spin-offs that have grown out of universities, and to contribute more widely to economic development.

The University of Tartu spin-off program started in new format in the autumn of 2020. The fourth admissions panel took place on March 7 this year, where 8 teams presented their ideas, five of them were accepted to the program. Representatives of all fields of the University of Tartu were invited to the panel to evaluate the scientific novelty of the ideas. In addition, a representative of the investor community, this time Mart Maasik, the head of Uni Tartu Ventures, validated the market opportunities for success for early-stage startups. 

Candidates for the program included projects from all fields, but those entering the program are from the Faculty of Science and the Faculty of Social Sciences

"During the next period, the newly joined teams will be able to create a business model for their idea with the help of mentors and test them on potential customers and investors," commented Triinu Lööve, the project manager of the multinational program. "Together with the new teams, we now have 19 science-based business projects developing in our program," added Lööve.

Among the participants in the program is Kaido Kurrikoff - Kaido is an Associate Professor of Molecular Biotechnology at the Institute of Technology of the University of Tartu. Among other things, he has supervised numerous masters and doctoral theses. Kaido joined the program to develop a platform technology that can deliver a variety of mRNA therapeutics to a patient's cells. Platform technology means that the development of clinical stages is carried out by pharmaceutical companies that license the created technology.

Among those accepted is Eric Roldan Roa. Eric, who works as a junior researcher at the Institute of Educational Sciences of the University of Tartu, is from Mexico. Additionally, he is studying for a doctorate at the same institute. An earlier remarkable achievement by Eric is developing combined educational program for teaching mathematics and music simultaneously. The spin-off Eric is currently working on is an educational company that specializes in community-led blended learning experiences for elementary school students and teachers. In particular, it focuses on the Latin American private school market, bridging the gap between consumers and cutting-edge educational research, innovative methods, educational technology, practices, industry needs, and multiculturalism. To this end, cooperation between researchers, educational institutions and Estonian companies creates learning experiences that are not intrusive into the ecology of a private school, but bring unique added value to the continuous professional development of teachers and the lifelong learning of students.

Mikk Espenberg is a researcher in environmental technology at the Institute of Ecology and Earth Sciences of the University of Tartu and in biology at the University of Aberdeen. He is also very closely related to teaching, as he gives lectures on various subjects at UT, mainly related to eco-technology. Bioremediation bioelectrochemical systems are considered to be a novel, sustainable and efficient strategy for the simultaneous treatment of contaminated water and energy production. The entry of nitrogen from agricultural soils into groundwater and watercourses impairs water quality. Clean drinking water and safe wastewater treatment is one of the main challenges for all societies around the world. By amplifying bioelectrochemical microbial purification processes, water quality can be effectively improved -  with the implementation of this science-based process and market validation, Mikk wishes to continue in the spin-off program.

In his doctoral dissertation, John Yangyuoru Kupagme is studying the biodiversity of African soil fungi. Based on the acquisition of the Institute of Ecology and Earth Sciences of the University of Tartu, he has also established a company in development. With his project in the program, John wants to improve crop production and reforestation in Africa and elsewhere. To this end, it intends to use certain mycorrhizal symbionts to increase food production and improve plant health. The method helps to adequately prevent the harmful effects of chemical fertilizers on humans and the ecosystem.

Raising capital is one of the most important activities when it comes to building startups. It is important as well as challenging so it’s crucial to have proper knowledge about it from the very beginning. The participants of the UT spin-off program had an unique opportunity to learn about venture capital and what it takes for a team or startup to be investment ready. The seminar was led by Heidi Kakko who is a professional in early stage investments and developing startups and growth companies and has extensive experience in all aspects of venture capital. Additionally she is a member of the council of the University of Tartu and chairs the council of UniTartu Ventures. 

During the seminar our spin-off program participants gained a lot of knowledge and tips on how to plan and reach investments. Here are 5 important takeaways from the seminar: 

Don´t raise money too early 

It can be very tempting to raise money early to really have a spurt in , however it may not be the best idea. To begin with, you will probably give away too much equity. 

Secondly, as soon as you get an investor onboard, you will become obliged to approve and confirm your decisions, which can be quite a hassle at times. That is why it’s better to get as far as possible on your own and then find a partner to boost your growth.

Also, do your due diligence on your first investor as investors often look at who has invested in the company before them. If the initial investor is shady, it might break your next deal. 

You are choosing the investor as much as they are choosing you.

Investment deal is a two way path and you will be on it together for a long time. You should evaluate the investors as well - do they match your expectations and are THEY suitable for your company? In the end you both share the same goal - to grow the company and to profit.

It’s usually a good idea to find investment partners who understand your specific field, and are the right level for your stage or round. The investor is not merely the wallet you get the funds from. An investor should be your partner who you have mutual trust with and who you can always turn to ask for advice. 

Imagine yourself spending significant time with this person - do you feel a level of mutual connection and mutual respect? Are they easy to get along with your team and other (possible) investors? If the answer is not “yes”, they might cost you much more than they can bring you. Choose carefully!

Your team matters!

Perhaps you have heard the saying “team work makes the dream work”. It’s true, a strong founder will not go far without a great team, especially founding team. In fact, one of the main reasons emerging companies fail is because the team didn’t work. It’s crucial to have the right competence, but even more so to have people who value each other's perspective, have mutual respect and know each other's expectations.  

In terms of funding, investors are investing in the team as much as in the idea. A weak team will not succeed with a great idea, whereas a strong team can succeed with a weaker idea. So, remember to put a lot of thought and energy into evaluating and selecting your dream team. Hiring the wrong people can turn out to be a significant expense and affect your ability to get funded.

VC’s are looking for reasons to say “no”

Investors mainly want to see a return on their investment. If you can demonstrate that your business will make them money, you’re already halfway there. That is definitely not the only criteria to decide: there could be a million reasons why your company is a great match for the investor, but it only takes one “no” to call off the deal. Be ready to honestly answer every detailed question and make sure there aren’t any troubles. The investors often tend to say “no” instead of taking time to dig deeper to the bottom of whatever the issue is.

Also, tell your story: investors can be swayed by a great narrative about why your business matters to you, the origins of the idea, and what are your future plans with it. What needs is your business going to meet, which problem to solve, how will it change the world and  what makes it special compared to others - if you can’t properly answer such questions their answer to you will be “no”, they will not invest in your company. 

Negative outcome isn’t always a bad thing

Don’t be afraid of failing and admitting it. You tried something and it failed - it’s not really a failure as long as you learn from it. Let’s say you went to the market with something and it didn’t work, now you have valuable knowledge of what doesn’t work and knowledge that you have a chance to make better decisions in the future. When you lose, don’t lose the lesson. Show the investor you worked your way out of that failure and turned it around for your own good.

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