Research commercialisation - Proof of Concept Fund: guidance

1. Scotland's Proof of Concept Fund

1.1 Overview of the Fund

The Scottish Government is committed to partnering with universities to create a new approach to economic development that aims to place universities at the heart of regional and national growth. The commercialisation of world leading research through licencing and the creation and scaling of spinout companies is critical for developing new markets and creating future industries that will deliver growth, investment and skilled jobs to power our future economy.

There are many barriers to increasing commercialisation activity including a lack of funding at the proof-of-concept stage. The Scottish Government is working to address these barriers and one intervention being introduced this year is a new Scottish Proof of Concept Fund to kick start the step change needed in our research commercialisation ecosystem.

Proof of Concept (PoC) funding supports early-to-mid stage commercialisation activities as part of the development of innovative ideas or technologies, bridging the ‘Valley of Death’ between groundbreaking research and commercial applications.

1.2 Aims and Objectives

The PoC fund will support researchers to develop their innovative ideas and/or technologies to bridge the gap between groundbreaking research and commercial applications. This will help to de-risk the project and attract early-stage investment.

Increasing PoC funding in Scotland will support the pipeline of projects with commercial potential to develop their ideas, allowing them to licence their technology or form spinout companies that can grow and scale in Scotland, supporting economic growth and development.

1.3 Available Funding

There is £2,900,000 available for PoC funding in Scotland in 2025/26. The fund will have a range of award sizes to support projects across sectors at different stages of technological and commercial development.

Tier 1 £1,250,000 – this will support grant awards of £50,000 - £125,000

Tier 2 £1,650,000 – this will support grant awards of £125,000 - £250,000

All applications to the fund will be expected to be fully costed to justify the award size applied for.

Projects will be funded at 100% full economic cost (FEC). Grant awards will be made directly to the lead university.

1.4 Demand Management Measures

We expect there will be a high demand for funding through the PoC fund. To manage demand and applicant expectations we will be implementing demand management measures to limit the number of applications which can be submitted by each institution, based on whether they had 10 or more, or less than 10 currently active spinouts surviving 3+ years.

By implementing the demand management measures as set out above, it is anticipated there will be approximately a 15% success rate for applicants applying for funding.

1.5 Eligibility Criteria

Applicants can apply for PoC funding if the following criteria are met:

Lead applicant:

The lead applicant must be based at a Scottish university.

The lead applicant can be at any stage in their research career from post-doc onwards (PhD students are not eligible).

Employees from Government, agencies, private sector companies, industry bodies and sole traders are not eligible to apply for this funding.

Stage of project:

The funding will support projects seeking to undertake early to mid-stage commercialisation projects to validate the commercial potential of innovative ideas that have arisen from discovery research.

The fund is open to projects exploring any of the following commercialisation pathways; licencing or company creation, both spinouts and social ventures.

Tier 1 – Projects applying for Tier 1 funding (£50K-£125K) should be able to demonstrate that they have developed a unique idea or technology and that they can evidence there is a commercial opportunity. Tier 1 funding should be used to undertake early technical and/or commercial validation of the technology and should not be used for further basic research.

Tier 2 – Projects applying for Tier 2 funding (£125K - £250K) should be able to demonstrate that there is a commercialisation opportunity for their project e.g. from customer feedback and have a well-developed commercialisation plan and intellectual property (IP) plan. Tier 2 funding should be used to further develop the commercial requirements to meet user/market need.

Project sector:

The fund is open to projects from all sectors/disciplines.

University support:

All applicants to the fund must have the support of their university, and evidence of support will be required in the application. Early engagement with your Technology Transfer Office (TTO), research office, knowledge exchange office or equivalent is recommended to ensure support can be provided.

Applications must be submitted by the university TTO or equivalent to be considered and should not be submitted directly by the applicant.

Each application must have a named contact from the TTO. If the project is funded, the TTO contact will be responsible for ensuring the project delivery phase is properly managed to ensure milestones are met within the required timeframe.

Other funding received:

Any other funding that has supported the research/project to date must be declared in the application.

Tier 1 & 2 - Projects that are successful in receiving funding from the UKRI Proof-of-Concept fund will not be eligible for funding from this fund to prevent duplication of funding.

Tier 1 only - Projects will not be eligible if they have previously had ICURe explore/exploit and/or HGSP Opportunity Qualification funding and support.

Tier 2 only - Projects in receipt of other funding e.g. ICURe explore or HGSP are eligible to apply for this fund, but the activities funded must be distinct from those being funded by other programmes and this should be set out in the application form.

1.6 What activities will be funded?

The fund will support activities to:

• Further develop research toward user/market readiness
• Develop commercialisation plans to reach users/markets

We are not providing an exhaustive list of the activities that will be covered by the funding, but we expect applicants to explicitly state the detailed activities the funding will cover in the application form which should be specific to the project.

Example activities which the fund will cover include:

• development of prototypes
• product, process and service design
• market exploration
• user testing and feedback
• developing routes to markets, users or audiences
• development of the business model including future financial sustainability
• developing product, process or service value chains including scale up requirements
• developing understanding of market, user or audience segmentation and positioning
• developing intellectual property strategy
• establishing or demonstrating freedom to operate
• developing regulatory or standards requirement needed to reach users and audiences
• validation studies
• prototype demonstration
• ‘technical’ and real-world concept optimisation

Resources to access specialised expertise or to subcontract elements of the projects pertinent to your specific commercialisation journey e.g. legal requirements, expert business advice and investor input, regulatory requirements or standards are an eligible cost and will be assessed as part of the resource justifications in your application. If external support is required, the contractual obligations around IP must be agreed and made clear in the application process.

This fund cannot to be used to support the following activities:

• fundamental or curiosity-driven research
• discovery research
• public engagement activities
• the filing of intellectual property (for example, patent, trademark, registered design)
• generic conference attendance
• publication costs

1.7 Additional Support

Tier 1 - Projects receiving funding from Tier 1 (£50K - £125K) will be expected to identify any gaps in knowledge/experience in the project team and identify suitable training opportunities to address this. Support to find suitable training opportunities would be provided and up to £5,000 of the project budget should be allocated for training purposes. Identifying training needs and using funding towards this is mandatory for all projects in receipt of Tier 1 funding.

Tier 2 – Projects receiving funding from Tier 2 (£125K - £250K) will be provided with mentorship support as part of the project. The type of mentorship provided will depend on the stage of the project and the experience of the project team. Applicants will be asked to identify what type of mentor support they would benefit from.

1.8 Application Process

Applications to the fund will open on Thursday 12^th June for a 3 week period, with the application deadline at midnight on Friday 4^th July. The number of applications which can be submitted by each institution is capped as set out in section 1.4, above.

The application form can be downloaded from the SG webpage. Guidance on completing the application form is available in section 2 below. Completed application forms should be emailed to spinouts@gov.scot before the application deadline. Applications must be submitted by the university TTO or equivalent to be considered and should not be submitted directly by the applicant.

Only applications which have been selected to apply by the university are eligible to submit an application. A statement of institutional support from the TTO or equivalent must be included as part of the application.

Following the submission of your application to the funding opportunity, your application cannot be changed, and applications will not be returned for amendment. If your application does not follow the guidance, it may be rejected.

1.9 Assessment Process

Once the application window is closed, an initial sift will be undertaken to check applications meet the eligibility criteria specified in the fund guidance.

An independent expert panel will be convened to review applications against the specific criteria as set out in the application form. The panel members will use the evidence provided in the application to assess how the project advances research toward your specific goals, as well as the development of the commercialisation requirements needs. Applications will be scored against the fund criteria.

Application guidance setting out what information we expect to be provided for each section of the application and what the assessors will be looking for is set out below.

The highest scoring projects in each Tier will be awarded funding until all funding budget has been exhausted.

Applicants will be notified of the outcome of their application as soon as possible after panel assessment. Feedback will not be provided on applications.

1.10 Timeline

Grant extensions beyond 31 March 2026 will not be permitted as funding must be used within the 2025/26 financial year.

1.11 Measuring Progress and Evaluating Success

Applicants will be asked to provide SMART milestones they expect to achieve during the project. Successful applicants will be expected to provide project update reports halfway through the project (end of December) and at the end of the project (end of March) outlining the progress made towards the milestones.

In addition to achieving milestones, project success will be measured against the following:

• increasing Technology Readiness Level (TRL)
• securing funding from other sources
• securing support from other programmes
• protection of IP
• market validation i.e. letters of intent
• longer term commercial outcome i.e. spinning out or agreeing licencing deals