Innovations and innovators: Ensors' James Francis and Jayson Lawson on the keys to success
Part of a new series published in association with Ensors, Cambridge Innovation Park and Nuffield Health
When James Francis arrived at Ensors seven years ago, one of his early contributions was to encourage the accountancy firm to sponsor Cambridge University Entrepreneurs (CUE).
Since 1999, CUE has supported and accelerated business innovation and entrepreneurship by training students, staff and alumni. It organises one of the most successful student-run business creation competitions in the world, and has awarded £600,000 in prize money to more than 60 start-ups. Many have developed into successful companies – such as Owlstone, Geospock and Light Blue Optics – raising more than £250million in investment, and producing more than 500 full-time jobs.
It’s a good example of how Cambridge’s academic prowess is translated into business success.
“The university spins out a lot of companies,” says James. “It is very focused on investing in its students and related entities. Several of the colleges have funds that they invest.
“But it’s not always about money – it can be lab space, or a professor’s time to advise.”
Cambridge Judge Business School also nurtures new businesses through its Accelerate Cambridge programme, offering training, coaching, mentoring and workspace. Among its notable successes are agritech data science firm KisanHub and political risk assessment company Cytora.
This entrepreneurial environment supports a wide range of professional services firms, such as Ensors, which employs more than 50 people across its Cambridge and Huntingdon offices.
“We’re very fortunate that Cambridge just keeps on growing,” says James, a partner in the firm. “I act for several angels who have made their money in Cambridge and have a loyalty to Cambridge – they keep on investing here, which is really exciting. It’s different if you went elsewhere.”
Such loyalty to Cambridge helps ensure that the spin-outs continue their trajectory.
A novel idea and suitable funding are essential ingredients in fuelling innovation. But a third is good advice.
“It’s important to come and talk to us early to identify potential issues,” says Jayson Lawson, who joined Ensors last year as corporate services director.
“I had an individual come to see me who had been running a business for 10 months and was only then starting to think about how to manage her business and deal with the regulatory aspects of her company.
“She needed a lot of advice from a financial and legal perspective. She had been taking advice from a friend in China, where the laws are completely different.
“I introduced her to half a dozen different people – such as intellectual property lawyers and employment lawyers as she wanted to take on staff and needed to think about protecting her IP.”
Building a supportive network of experts around you can be a critical step for start-ups.
“I advise coming to us before you’ve formed a company,” says James, who started his accountancy career at PWC on its graduate scheme. “There are several ways of structuring a business. It could be a plain vanilla company, or a charity, or a company limited by guarantee, or a partnership or a sole trader. Just think about what your aspirations are from the outset before you put a legal framework around it. Whichever avenue you go down has different consequences in terms of reporting and tax.
“I always start with a blank sheet of paper, write down what a person is trying to achieve and then formulate with them what is the best business structure.”
Jayson adds: “It’s much better to understand the business first. That gives you a better understanding of what the numbers are going to look like and where the issues the business is facing will come from.
“To achieve the business’s goals, there might be other people you need to speak to and haven’t thought about. We have the benefit of working with other businesses and we can see the pitfalls that other businesses have been through and advise accordingly.”
James adds: “Real entrepreneurs realise they can’t do everything. So they surround themselves with people who can do everything between them.
“A client might say ‘I’ll do the books myself on a Sunday afternoon’. But they shouldn’t be doing that. They should be worrying about how to get to market. Yes, they’ve got to pay us to do it, but it frees up them to do what they are good at. We are experts in our sector – use us.
“Sometimes entrepreneurs fail because they try to do everything themselves. There aren’t enough days to do that.”
Increasingly, Cambridge companies are embracing collaboration as a way to drive forward their businesses. Nowhere is that more apparent than in the burgeoning life sciences sector, where biopharmaceutical companies like AstraZeneca now routinely work with academic researchers and organisations, and with other businesses.
The hope of many in that sector is that such collaboration can help drive forward the notoriously slow process of drug discovery and development, helping to deliver the next cohort of blockbuster drugs that will fund further innovation.
“The third clinical trial stage, when it goes to human trials, is when you need eight-figure committed working capital facilities,” says James. “Companies either cash out at that point, or they need a backer to see them through.”
Is there enough funding available in Cambridge?
“There is always funding,” replies James. “It’s whether it’s at the right price, at the right dilution or the right percentage.
“And people don’t always know where to get it. That’s part of our job – to ask people whether they have thought about grants, initiatives, or going to a bank.”
The growing alternative finance market – such as the crowdfunding platforms offered by Cambridge-based SyndicateRoom – offers another funding route.
And those engaged in research and development can also explore the opportunity of applying for tax credits.
“The incentives from the government can be very attractive,” says Jayson. “Inevitably there are businesses missing out. “We talk to all our clients about the various options as many businesses assume they are not going to qualify but, in reality, when you get in to the detail there are opportunities.”
The right idea, the ideal business structure, appropriate funding and a network of advisers and experts – it’s a recipe for success in the supportive Cambridge business environment.
But what of the ‘B’ word? Will that spoil the party?
“Some of our clients are cashing out because of Brexit,” says James. “They don’t like uncertainty. Others are saying ‘We’ll get through it’. They take precautions. There is an air of caution.”
“It gives rise to opportunity too,” adds Jayson. “You don’t know what your competitors are going to do – they might decide to cash out.”
Opportunity, it seems, is always around the corner for Cambridge’s innovators.