✋ Metacarpal, Space Intelligence Raise, Scottish Enterprise YE Numbers, Share Incentives

Plus a new grant fund for startups working with academia

Here's your Campfire for the 2nd of September, 2024.

💼 Want to create template legal agreements in minutes for free? Check out what Shepherd and Wedderburn making available for Campfire readers below in the ‘Asks and Offers section’. Also follow the Start to Scale LinkedIn page for useful videos and posts designed to help founders.

---

🌊 Updates

🥼 Edinburgh-based Metacarpal (Medical equipment manufacturing) raised £800,000 in seed funding to advance the development of what it says is the world’s first mechanical bionic hand. The funding comes from investors including SIS Ventures, Scottish Enterprise, Worth Capital, Oxford Technology, the University of Strathclyde, and Gabriel Investment Syndicate. IN ACS TS DGT

🚀 Edinburgh-based satellite data startup Space Intelligence has completed a Series A funding round of an unspecified amount led by new investors AzurX Space Ventures, with additional support from Intercontinental Exchange, Inc. The funds will be used to expand their global forest mapping data, aiding carbon offset projects and monitoring environmental impacts in corporate supply chains. VS TS

📝 Scottish Enterprise shared their year-end numbers and called it their 'strongest performance ever'. Numbers include investing £53.4 million into 117 early-stage companies ‘which in turn leveraged £152m of external investment’. Support provided to businesses last year also ‘unlocked £1.9 billion of capital investment’ spending in Scotland and £2.15bn in planned exports. They worked with 1,300 companies during the year to the end of March, securing 16,700 new and "safeguarded" jobs through the provision of government financial support. No breakdown was given on the number of new versus existing jobs. TH DGT IN

⛺ Knowvate Hub, a community focused on diversity among ethnic minority entrepreneurs, is launching an Ideation Bootcamp this autumn in Aberdeen and Glasgow. The three-day bootcamps, in partnership with the Royal Bank of Scotland, aim to help Black, Asian, and Minority Ethnic (BAME) entrepreneurs turn their ideas into successful businesses. The Aberdeen bootcamp runs from September 18th to 20th, and the Glasgow event follows from October 2nd to 4th, 2024. SBN

Scottish Enterprise and Interface have announced a new £250,000 fund to support research and development collaborations between businesses and academic researchers in Scotland. The Advanced Innovation Vouchers offer up to £20k in matched funding to SMEs working on new products, processes, or services with academics. The goal is to foster long-term partnerships between businesses and academia. DGT

🍺 Glasgow-based Brewgooder, an ethical brewer, has set up the world’s first Fairtrade-certified supply chain for brewing beer. Using climate-resilient fonio grain and through working with farmers in Guinea, they’ve developed a supply-chain that “ensures fair pay and supports sustainable growth in local communities”. TS

🏆 Girls aged 13-18 can enter the Growing Future Assets Investment competition, pitch business ideas to compete for cash prizes. This Dragons’ Den-style contest encourages Scottish teenage girls to explore the investment business and addresses gender disparity in financial services. TS

📣 Asks & Offers

🚨Start to Scale by Shepherd and Wedderburn is offering eligible subscribers of Campfire exclusive access to their ‘Start to Scale Hub’ which helps companies create template legal agreements in minutes for free. To learn more and request access click here.

📢 Una Watch is hiring! Una Watch, an innovative start-up focused on creating a unique, modular, repairable, and upgradeable GPS running watch, is hiring a Digital Marketing Manager. As they prepare for their Kickstarter launch in early 2025, they’re looking for someone to lead their digital marketing efforts. Interested candidates should send their CV and cover letter to admin@unawatch.com. For more details, click here.

💡 Frontier Robotics is hiring! A new vacancy for a UI/UX Engineer is open at Frontier Robotics based at the National Robotarium in Edinburgh. Responsibilities include: designing and developing graphical user interfaces using C++, Qt, docker, and ROS2, developing web interfaces using technologies like Node.js, designing interfaces that are user-friendly, aesthetically pleasing, reduce friction, and build user trust in data and autonomy, and more. Full job spec here. 👉 Send CV and Cover Letter here.

🥃 Are you a problem-solver driven by curiosity and a passion for your work? Do you thrive on deep, meaningful conversations and value fostering long-lasting relationships? Do you love whisky? If so, we invite you to become a founding member of Dram & Discourse. Learn more here

🦅 Barclays Eagle Labs launched their new Eagle Labs Academy, funded by the UK Government. The Academy provides access to free learning content and entrepreneurship training from different sources. Aiming for those starting their journey to those wanting to scale. Aside from the content, Eagle Labs has partnerships and access opportunities with the Department for Science, Innovation, and Technology, and their Demo Directory. Find out more here.

👭 Interested in connecting with possible co-founders? Fill in your listing on Cofounder Curious today! Connect with others for possible cofounder matching here.

👷Are you hiring? Send us a blurb and we’ll include it in the next newsletter!

✍️ Want to write something for Campfire? Have an opinion you'd like to share? get in touch!

The Basics of Share Incentives

By Robert Gelb, in partnership with Shepherd and Wedderburn

When you're building an early stage company, your most important resource is your team. No one is superfluous, and everyone not only matters, but is needed to be performing effectively for your business to grow. To attract and keep the best talent, many founders offer share incentives and opportunities for team members to benefit from the upside of a company's increased value or eventual exit.

I recently caught up with Stephen Trombala and Rodger Cairns from Shepherd and Wedderburn to ask them about share incentives. A subject, I will admit, that fills me with slight trepidation and a bit of anxiety — anything to do with shares can be complex stuff. They were positively bubbling with excitement and super keen to go into all sorts of detail about the share incentive landscape (I'm so glad for their sake they found their calling as lawyers...).

So what are share incentives?

At their most basic, as Rodger says, they're "an incentive arrangement that gives someone a pathway to getting shares in your company". Most of us are probably familiar with how equity plays a large part in discussions with co-founders and investors. When it comes to staff, there are a variety of ways you can structure share incentives, and sometimes as founders it’s hard to get up to speed quickly with the different ways of approaching it.

Why would one want to offer them to staff?

Rodger points to three drivers when it comes to why founders first start thinking about share incentives. "First, when you think about incentivising people to encourage them to work hard, share incentives enable them to benefit in the same way all shareholders do, and share in the fruits of their labour."

Retention should also play a significant role in how you see share incentives. "If you've got a load of good people, you want them to stick around. Often when you set up incentive arrangements, the benefit is vested over a certain amount of time, and likewise if the person ceases employment they'll normally lose the benefit," Rodger says.

The third reason to consider share incentives is to help with recruitment. Startups often compete for talent with lots of other, far more stable, far more lucrative opportunities. Yes, we can offer things like an ability to work with lots of different challenges, and in a truly fast-paced and innovative environment, but at the end of the day, compensation is always a challenge when it comes to competing for talent. "Offering equity, especially at the 'ground floor'," says Rodger, "often helps balance out potentially higher remuneration packages they might be offered elsewhere and might help recruit the talent who are more likely to want to work for a new company in the first place."

So, why not just give someone shares?

You could simply award shares in your business to someone. For example, Tabitha gets 50 shares in the business and joins the cap table. That can happen (though financially often not as simple as you might think), however it's more likely that you'll want to award options to acquire shares based on certain factors. Share options therefore are a way for you to give someone the potential to earn equity in your business, but still have some control over when, and how those options are exercised.

There's also the dreaded three letter word to think about. Tax. Non-tax-advantageous share incentives can result in your employees actually having to pay more money in order to get their shares. "They might have a charge to income tax on the point of exercising their option to buy shares," Stephen says, "and may have to pay income tax on the difference between the market value of the shares and the exercise price payable." All this before being able to sell the share means the employee has to have a bunch of cash kicking about in order to even participate in getting the benefit you’re providing to them. Tax advantaged arrangements are extremely beneficial and help staff with issues like this.

We'll go into EMI options next time, but often tax-efficient setups benefit both the employee and the company. One example is using exit-only options. With these, the option to buy shares only crystallises upon a company exit. As Rodger explains, "You're not going to have a massive number of shareholders coming onto the books until right at the end, and they may only be shareholders for a fraction of a second between exercising and selling the shares."

Up until exit, that means dealing with someone who leaves is very straightforward, and the option can lapse since the employee is no longer with the company.

"Whereas if you're talking about actual shares and somebody leaves," Rodger says, "then you actually have to physically do something with that asset. You have to claw it back in some way, and that leads to questions. Can the company actually claw it back? Do you have to set up some sort of third party trust to buy back the shares?" It can get complicated.

When do upfront share acquisition arrangements make sense?

If it's so much of a hassle to deal with shares, then why on earth would you do an upfront acquisition arrangement? "It's all about the tax," Rodger says, "When there's not a tax advantaged share option alternative and the shares are affordable for the individual at the outset, then it's usually much better for that person to either be given the shares for free or to purchase them at a low price. And then anything after that acquisition will typically be within the charge to capital gains tax rather than income tax." This is one reason why the sooner you establish cofounder share capital, the better.

Okay, we now have a pretty good grounding of what share incentives are. Stay tuned for next week when we go into detail about everything to do with EMI share options. Why they're so great, why they have nothing to do with the music industry, and the common challenges founders face when dealing with them.

This is part one of a three-part series about Share Incentives in collaboration with Shepherd and Wedderburn, who sponsor Campfire. Part two covers EMI, and part three showcases tips, tricks, and strategies that companies can use when thinking about the best structure for their business. To find out more about how Shepherd and Wedderburn can help you design a share incentive scheme that works for both you and your team members, reach out to them here.

---

📅 Events

☕ Series: Unfiltered: An in-person, informal catch-up with the Scottish tech community! Come join us for a coffee!
⛾ 03/09, 08:30 🗺️ Dundee, MORE INFO
⛾ 04/09, 08:30 🗺️ Inverness, MORE INFO
⛾ 04/09, 08:30 🗺️ Stirling, MORE INFO
⛾ 04/09, 08:30 🗺️ Edinburgh, MORE INFO
⛾ 04/09, 08:30 🗺️ Aberdeen, MORE INFO
⛾ 04/09, 08:30 🗺️ Glasgow, MORE INFO

🌐 03/09, 10:00 🗺️ Edinburgh: Edinburgh International Connectivity and Expansion Roundtable Discussion: Join us for an exclusive roundtable discussion featuring CEOs, entrepreneurs, and academics passionate about international expansion. MORE INFO

🌱 03/09, 16:00 🗺️ Glasgow: The Sustainability of AI: Join Adam Bastock (Small99) & Henry Bruce (ExpectAI) for a dynamic and interactive exploration of the complex relationship between AI and sustainability. Is this emerging tool crucial for environmental protection or an emerging threat to our planet? MORE INFO

🍻 03/09, 17:30 🗺️ Edinburgh: Tech Meetup Edinburgh - September 2024: ​​​​The Tech Meetup is a monthly excuse for the tech community around Scotland to network, learn and share new ideas! Come along to enjoy informative presentations from your peers, listen to exciting projects in the community and make some new connections. MORE INFO

🤖 04/09, 15:00 🗺️ Edinburgh: Unleash The Power of ChatGPT & Artificial Intelligence (AI) To Grow Your Business: Join our AI Masterclass with Stephen Whitelaw, a leading expert in technology and Artificial Intelligence. ChatGPT and other similar AI applications use natural language processing to create humanlike conversational dialogue. MORE INFO

🎯 04/09, 16:00 🗺️ Online: Pond-skipping: How to navigate M&A in the UK & USA with ease: M&A remains a pivotal cornerstone for founders looking to successfully build and exit their businesses - so where d'you begin? Both the UK & USA are major players in the game, each with their own pros, cons and quirks to influence the decision-making process. This Sifted Talks we're weighing up the key differences between these gargantuan markets to sketch out the many paths your business can take. MORE INFO

🍕 05/09, 18:00 🗺️ Glasgow: Tech Meetup Glasgow - September 2024: Join us at Civic House, Glasgow on the first Thursday of each month for our free event featuring two talks on tech with soft drinks and pizza. MORE INFO

🔓 05/09, 16:00 🗺️ Aberdeen: Blockchain Unlocked: Pioneering Scotland's Future & Tomorrow's Industries: Join us for a relaxed and engaging mixer where we’ll explore blockchain’s transformative potential for Scotland’s economic landscape. Hear from three blockchain startup founders and representatives from the Scotland Blockchain & Digital Trust Taskforce in an event designed to be both informative and fun. MORE INFO

🤝 09/09, 18:30 🗺️ Inverness: Inverness Tech Meetup: Whether you're a seasoned professional, tech-curious, or attending for the first time, whether you're seeking new contacts, eager to learn from others, or ready to share your expertise—please book a ticket now, as places are limited. MORE INFO

🗣 10/09, 11:00 🗺️ Dundee: Dundee Presentation Club: Join us in the Abertay cyberQuarter for a chance to practice your pitches and public speaking in a friendly, supportive setting. MORE INFO

🛡️ 11/09, 08:30 🗺️ Glasgow: Scot-Secure West 2024 – Cyber Security Summit: Scot-Secure West‘s programme is focussed on improving awareness and best practice through shared learning: highlighting emerging threats, new research and changing adversarial tactics, and examining practical ways to improve resilience, detection and response. MORE INFO

⛓ 11/09, 17:00 🗺️ Edinburgh: Blockchain Scotland Meetup: ​Welcome to the Monthly Blockchain Scotland Meetup at the Bayes Centre in Edinburgh. The event takes place at the ground floor in G.03. MORE INFO

🚀 11/09, 17:15 🗺️ Glasgow: Space Sector Drinks Reception from Shepherd and Wedderburn: Following the day’s events at Space Comm Expo Scotland, we would be delighted if you could join us at a drinks reception being held at the Red Sky Bar, Radisson RED, Glasgow. There will be a chance to network and catch up over some drinks and canapés. Spaces are limited so please RSVP by clicking the button below. MORE INFO

♻️ 11/09, 17:30 🗺️ Edinburgh: Saving the World with the Circular Economy by The Melting Pot: The first in our debut series of Social Impact Speaker events sponsored by Charisma Charity Recruitment, ‘Saving the World with the Circular Economy’ will explore the contributions of members of our social innovation ecosystem working towards a brighter future with a circular economy mindset embedded within it. MORE INFO

🤖 11/09, 17:30 🗺️ Edinburgh: Data Science + AI Meetup: Inside Vector Databases + AI for Drug Discovery The Edinburgh community meetup for all things Data Science - join us at Codebase to learn about how Vector Databases work from Weaviate's Developer Educator and Edinburgh local JP Hwang. We'll also hear from Rohan Gorantla about how AI is being applied to drug discovery in academia. MORE INFO

🌞 12/09, 08:30 🗺️ Perth: Perth Tech Mornings: Open to everyone, join us in the Famous Grouse Ideas Centre in Perth Creative Exchange to connect with members of the local tech community. Come for a coffee, networking and build connections. MORE INFO

🚀 12/09, 10:30 🗺️ Perth: Perth Coworking Day: Join us at the Famous Grouse Ideas Centre in Perth Creative Exchange for a day of free coworking. This is a great opportunity to connect with the regional tech and business community, use the excellent facilities available and get an extra dose of Friday motivation. MORE INFO

👥 12/09, 12:30 🗺️ Edinburgh: Mindful NetWalking in the park: Join this Mindful Netwalking experience: Meet other Founders, enjoying the healthy way to network, inspired by a gentle walk. MORE INFO

🔌 12/09, 17:00 🗺️ Stornoway: Unplugged - Stornoway - Hybrid: Open to everyone, CodeBase Unplugged is a networking event for professionals working in, or interested in, tech startups. Join us for some conversation, short talks and light refreshments. We’ll have a session on the opportunities available through the Techscaler programme. MORE INFO

♻️ 17/09, 13:30 🗺️ Glasgow: Corporate Connections Sustainability Showcase: Barclays Eagle Labs are helping corporates to find faster solutions to some of the challenges they're facing by harnessing the innovation and agility of startups. In this showcase you will hear from founders, demonstrating sustainable solutions to aid potential challenges across your organisation. The event will include a networking arcade featuring exhibitions and prototypes with the innovators showcasing across the stages. MORE INFO

⛺ 19/09, 09:00 🗺️ Aberdeen: Ideation Bootcamp Programme | Aberdeen: ​Join us for an intensive 3-day bootcamp designed to empower BAME entrepreneurs with the skills and knowledge to launch successful startups. Whether you have an existing idea or are seeking inspiration, this event will help you refine your concept and develop a solid foundation for your business. MORE INFO

🌃 19/09, 18:00 🗺️ Glasgow: FuckUp Nights Glasgow Vol.2: Join us for FuckUp Nights Glasgow Vol. 2, where inspiring speakers will share their stories of professional failures and the valuable lessons they’ve learned. It’s an evening of honesty, growth, and surprises that you won’t want to miss! MORE INFO

🍹 19/09, 18:00 🗺️ Dundee: Dundee & Tayside Founders Mixer: Join us for our Dundee & Tayside founders mixer! Open to everyone involved with tech startups in the region. Come along and try a selection of amazing cheeses from The Cheesery and meet other founders and members of the CodeBase team. MORE INFO

🚀 21/09, 10:00 🗺️ Edinburgh: Makers gonna make: If you have a side project or app idea you want to work on but struggle with time or motivation, this monthly event might be for you. It's a space for indie makers to build, hack, and tinker together, with the chance to present your work to a supportive community that values honest feedback and accountability. The goal is to create something from nothing and share it with the world. MORE INFO

🎯 Deadlines

📐 Royal Academy of Engineering – Enterprise Fellowships Now Open: Are you a graduate or researcher with a brilliant tech innovation? Apply now for 12 months of spinout and startup training with a grant up to £75k. Not your average accelerator – no fees, equity or IP taken. Apply by 27 August here.

🎯 Scottish EDGE Round 24 is now open for applications until 2pm on Wednesday, 11th September 2024. Early-stage Scottish businesses can apply for categories like Scottish EDGE, Social Enterprise EDGE, Young EDGE, or Wild Card EDGE. The competition offers a funding pot of £1.5 million, with individual awards of up to £100,000. A free online support workshop will be held on 28th August 2024 to guide applicants. More details Apply by September 11 here.

🇬🇧 Upcoming Innovate UK deadlines:

• Innovate UK Smart grants: July 2024 Applications close 23 October

Think someone would like this issue? Forward it to them! Check out previous issues by subscribing.

That’s all for this week - have a great one!

Team 🔥 Campfire