Not much seems to faze Riam Kanso. Dialling into a Zoom call from her office in East London the scientist and entrepreneur tells me that little worries her — apart from the threat of nuclear war.
Our Zoom call was marked by the absence of her uniform leather jacket. She has seven of them that look the same — a look she’s had since she was 15. “If you look back at photos from my PhD and postdoc days, I’m wearing exactly the same thing,” she says. “I’m a fan of rock music, and this is just my outfit […] it’s a bit of a shame that Jensen’s copying me now”, she adds, referencing Nvidia CEO Jensen Huang.
Kanso moved to the UK in 2008 from Lebanon, where she grew up. The student days she talks about were spent at the University of Oxford, where she was awarded a scholarship to study a PhD in cognitive neuroscience before completing a postdoc.
Oxford was the second reason she moved to the UK though. The first? Her love of rock music and a chance to see “legendary rock bands” like Black Sabbath live. As an aside, I’m told whenever the Conception X team descends on Finnish tech conference Slush they always make at least one pilgrimage to The Riff — a bar which describes itself as ‘your ultimate rock n’ roll destination in the heart of Helsinki’.
Building Conception X
After graduating Kanso spent time as a project manager at University College London and held other roles mediating between academia, industry and tech. She then launched Conception X, a programme that teaches PhD students in the UK what they need to turn their research into a company, alongside their degree. It offers a startup track for PhDs who are ready to build a company, and a project track for students interested in developing their business skills but who aren’t yet ready to incorporate.
She’s been building it for the last seven years, and in that time the programme has trained 450 teams, created 150 deeptech startups and built a portfolio worth £500m — which it classes as the combined value of the companies that have gone through Conception X and gone on to raise funding. It doesn’t take any equity in the companies which form as part of its programme, and is a non-profit funded by government, philanthropic, university, VC and corporate money.
Kanso’s life is made easier by the fact that being a scientific founder (or ‘venture scientist’, as she dubs them) is en vogue. She tells me that eight years ago, if she’d asked a room of 50 academics how many of them wanted to build a company, maybe four hands would shoot up. “Now it’s like 50% of them,” she says.
So what’s changed? “Universities are increasingly being assessed on the broader impact they create — not just research output,” Kanso tells me. “Innovation is now a key factor, and they’re also under growing pressure to produce spinouts.
“At the same time, senior academics leading large research groups are seeing shifts in both education and the economy. Many are offering more opportunities for students to engage in research commercialisation, viewing it as a positive contribution to their labs.”
Funding programmes like Horizon Europe — the EU’s €95.5bn research funding programme — have also placed greater emphasis on commercialising research. All these moving cogs have been complemented by a generation of academics who are just more entrepreneurial than their forebears, Kanso adds.
“The mentality was that PhDs aren’t business minded,” she says. “But the VC attitude has changed, and universities are getting on board that PhDs should commercialise research, because it’s a better win for the uni than if they just pass through and go and work for a consultancy.”
“I feel like cancer will be treated like the flu”
There’s a genuine belief among investors that the next generation of European unicorns will be founded on rich intellectual property (IP) discovered at one of the continent’s leading research institutes.
That, coupled with European policymakers being hyperfocused on tech sovereignty and making sure the next big developments in areas such as AI, quantum and semiconductors are made in their backyard, and not imported, means money is chasing scientists.
But it’s harder than it should be for academics to launch companies. Scientific founders face a set of challenges that you don’t come across building classic software products.
“You can’t just quit and build in your parents’ garage,” Kanso says. “You need to be part of a research institution.”
The reason is obvious. Companies Conception X has helped create are working on everything from producing electricity from soil to using quantum computing to discover new drugs — things you can’t just tinker with in a shed. Other ideas Kanso’s seen that excite her include techniques to refuel in low orbit, how to mine and plant crops in space and AI for manufacturing new materials.
Not all of the opportunities are sexy. “Corrosion is a trillion dollar industry,” Kanso says. Some of it is also wildly ambitious. “I feel like cancer will be treated like the flu, and we’ll be able to extract energy from anything.”
Research on this stuff is happening at European universities which go toe to toe with heavy US hitters like Stanford and MIT. The continent produces some of the best quality research in the world, from places such as the University of Cambridge, Imperial College London, University College London, ETH Zurich and the Technical University of Munich (TUM).
There’s a huge opportunity for institutions like them to spawn a generation of science-based, world-leading companies, Kanso thinks, but only if they get better at getting research off the shelf and into the market. “The amount of research sleeping in labs, it’s mind boggling,” she says.
“The opportunity for Europe is in this early-stage creation of completely new deeptech off the back of the crazy uni research we have.”
Fixing the spinout pipeline
Universities have come in for some flack in the UK, with fingers pointed at them for being too greedy with equity and too slow to negotiate spin-out terms, delaying academics from launching companies while running the clock down on their funding.
The greediness has been tackled somewhat. Last year, a number of the UK’s top universities adopted government-backed guidelines designed to reduce their share in affiliated spinouts. Recent research from data platform Beauhurst and the Royal Academy of Engineering shows equity stakes taken by UK universities in their spinouts at record lows — though there’s still a big regional disparity up and down the country.
“We have somehow managed to flow under the radar of a lot of this drama,” Kanso says.
How much equity is taken in spinouts created through the Conception X programme is at the discretion of the universities the PhDs are coming from, and it doesn’t have any fixed rules for that. It does, however, support founders through the process of negotiating spinout terms by connecting them with deeptech experts, coaches and other PhD founders who’ve been through the same process. It also has a partnership with law firm Orrick.
The next big thing that needs fixing in the ecosystem is proof of concept funding, Kanso says; money to cover the period between the end of a research grant and what is needed to be in a position to commercialise the IP — what’s referred to as the spinout valley of death.
Conception X last week announced a funding pot of £600k to fill some of that gap. The money has come from an angel syndicate which includes scientists and engineers from Google and DeepMind.
The syndicate will make 15 uncapped equity investments of £40k into deeptech teams at the pre-incorporation and pre-seed stage. With such a deal company valuation isn’t set at the time of investment, and instead the money converts into equity at the next priced round, which should take place a maximum of six months after investing. Unlike the Conception X programme, the money is open to applicants from across Europe.
“It’s designed to fill a major gap in the ecosystem: when a promising idea is ready to leave the lab but there’s no immediate funding available to file a patent, buy essential hardware, build a proof-of-concept and spin out.
“Most VCs aren’t ready to step in, and grants take too long. It also helps level the playing field across universities, where access to early commercialisation support can vary widely.”
The race for research talent
Spinout success depends highly on Europe attracting the best minds to its universities. That’s a race playing out between the continent and its global competitors like the US and China as much as it is between individual European nations.
The UK recently promised more visas for highly skilled tech talent with a focus on international AI workers and science graduates, as well as a £50m funding package to try and lure US researchers to this side of the Atlantic. The EU has similarly gone on the offensive recently with its ‘Choose Europe for Science’ initiative intended to attract foreign researchers to European shores. France and the Netherlands have similar programmes.
“The fact that the government is focusing on this problem now is encouraging,” Kanso says about the UK, in a follow up email after our conversation.
“We’ve seen firsthand the difficulties that siloed visa schemes create. For some PhD founders there’s a gap when they’re about to finish their PhD and their business is still mostly an idea — they don’t know yet if they’re going to have that security to remain in the UK and build their company here. All these issues create unnecessary delays and barriers to talent.
“Siloed visa schemes are creating uncertainty at exactly the wrong moment: when scientists are deciding whether to build their future, and their companies, in the UK.”
Kanso tells me the UK should prioritise the introduction of a youth mobility scheme which “would support individual founders, but also help startups attract the critical early talent they need to grow, including cofounders, first hires and collaborators.”
She was speaking before a UK-EU summit that took place in London this week, where the two signed a new deal to ‘reset’ relations which includes an agreement to work together on a ‘youth experience scheme’. If it goes ahead, it could mean young people might be able to travel and work freely in the European Union again post-Brexit.
“No-one wants to touch the super early stage”
The UK is awash with university affiliated venture funds for spinouts, with a number of new investment vehicles being launched in the last couple of years. But Kanso’s critique is that they don’t invest early enough.
“I wish with uni funds they looked at the super early stage,” she says. “We’ve sent a lot of these funds companies and they’ve said they’re too early for us […] no-one wants to touch the super early stage.”
She’d like to see each fund giving every spinout produced by the university they’re attached to £30k for a nominal 1% equity stake, and have the company set up next to the institution and incorporate in the UK.
Fixing support at the top of the funnel is vital if the UK wants to scale its spinout ecosystem and develop world leading companies coming out of its universities.
“It is still a numbers game,” Kanso says. “If you push more people to build stuff some of them will be successful, some won’t […] but maybe their second or third company will be successful.
“It’s crazy to think more companies at the early stage won’t spur more money for more companies and exits.”
Read the orginal article: https://sifted.eu/articles/conception-x-founder-big-interview/
