Spin-out chairman urges cash backing

THE chairman of one of Edinburgh University's most high profile spin-out companies has criticised British venture capitalists for not pumping enough funds into start-ups in the clean technology sector.

Derek Shepherd, who is spearheading the development of wind turbine generator maker NGenTec, said VCs need to put "their money where their mouth is" if they want technology companies to stay in Scotland.

NGenTec raised 2 million last year from Amsterdam-based SET Venture Partners and Scottish Enterprise's co-investment fund.

Although Shepherd said he on the verge of announcing a second substantial investment in the company, he is being forced to head to a clean tech conference in Monaco next month to try to raise the 10m he needs to take his product through to production.

Shepherd, who was previously managing director of the international arm of temporary power supplier Aggreko, told Scotland on Sunday: "If we hadn't had money from Scottish Enterprise and the UK government's Department of Energy and Climate Change then we wouldn't be at the stage now where we are creating jobs."

NGenTec already has five staff and expects to grow to 16 workers by the second half of the year. The firm will move to Edinburgh's George Street next month.

A spokesman for trade body RenewableUK said: "We need the government to support prototypes. Public support at the initial stage will attract private capital."

Tom Murley, who chairs the British Venture Capital Association's clean tech committee, said: "There's a lack of experience among VC fund managers when it comes to clean tech so they are unsure about which companies to invest in.

"But there's also an ongoing lack of general VC finance available following the financial crisis."