Frequently asked questions and answers

1. Why the pink background?
Our aim is to establish a brand with a clear link to the financial markets which we hope the companies that we fund will in time operate in.

2. What can the funds be used for?
The Cascade Fund can invest in either stimulus or growth funding. For a more detailed explanation please visit How much can I get and what can I use it for?.

3. How do I make an application?
Please refer to How and when to apply.

4. How many proposals will be funded each year?
There is no limit to the number of proposals that can be funded in any given year, similarly there is no requirement that each partner university must benefit equally from the Cascade investment, it is simply determined by which proposal is the most attractive, regardless of their origin.

5. Can Cascade make follow on investments?
Yes, though please note that The Cascade Fund is limited to investing a maximum of £250,000 in any one proposal in total, although other institutions may invest additional funds (see Question 6).

6. Will Cascade co-invest with other investors?
Yes. One of the aims of The Cascade Fund is to invite other funding institutions to make investments alongside Cascade.

7. Will Cascade invest in established spin-out companies?
This is dependent on the stage at which the spin-out company has reached. The aim of Cascade is to invest in the early funding round where the risk is too high for other sources of funding. For further details please see Who can apply?.

8. Do I need to start a company to access Cascade funds?
No. The Cascade Fund can provide Stimulus funding to help set up a spin-out company.

9. Will Cascade make grants?
No. The Cascade Fund is required to make a return on their investment. For a further explanation please see Typical offer terms.

10. What legal agreements are needed to start a spin-out company?
You will normally need an IPR assignment agreement, a shareholders' agreement and a memorandum of understanding amongst others. However, each spin-out will require slightly different legal documentation depending upon their circumstance - your Technology Transfer Office will be able to advise you on which documents you will need (see also the The Cascade Fund Guide to Starting a Spin-Out (Word document)).

11. What equity stake will Cascade take?
Each proposal will be assessed on its individual merit so the amount of equity stake taken will differ according to the level of investment required. For further guidance on your particular proposal please liaise with your Technology Transfer Office.

12. Will prior project expenditure (e.g. research council funding) count towards company valuation?
Sometimes. Past project expenditure may help to justify a valuation of the shares of a new company.

13. How is a start-up company valued?
A newly formed spin-out is unlikely to have any significantly valuable and realisable assets so valuation is based on projection of future performance. In order to estimate how your spin-out may perform in the future, significant market research is required. You will be given help by your Technology Transfer Office and Chord Capital with achieving an initial valuation.

14. How long does the process take?
There is no hard and fast rule governing how long achieving funding will take, as the application process is iterative. However, once you have made a proposal to The Cascade Board you can expect to hear of their decision within 3 months (less for a Stimulus Application), if the proposed investment is approved you can expect to receive the first tranche of funds within a month.

15. What help is available to make proposals investment ready?
In the first instance your Technology Transfer Office will work with you to produce a proposal. Additionally, you will receive advice from Chord Capital during the process. You may find that you make a proposal to The Cascade Board and they ask you to undertake further work on your proposal.

16. What is a business plan?
A business plan is a comprehensive guide to the proposed activities and performance of your company. There are a number of different sections you will have to include, but as a guide you will have to provide projected cash flow statements, profit and loss accounts, market intelligence and details of the market structure. Your Technology Transfer Office will be able to provide you with a draft structure for a business plan and will assist you in completing it. (see How to Write a Business Plan (Word document)).

17. What are the reporting requirements post investment?
As part of the offer terms you will be required to report on certain milestones such as production of prototype, first customer contract, etc.

18. How does Cascade exit an investment?
By trade sale or floatation. A management buy-out is also a possibility.

19. What happens if the project hits a problem or fails?
The Cascade Fund and your Technology Transfer Office will work with you to prevent problems. It recognises that early stage technology is a risky investment.

20. What are the responsibilities of a director?
Please see The Cascade Fund Guide to Starting a Spin-Out (Word document).