'The I&I Programme's mission is to support individuals or small teams who have ground-breaking ideas which they wish to commercialise.'
OK as it stands, but the weasel word is 'ground-breaking'. 'Potentially profitable' would have been better.

'Until 2004, the Programme has typically made ca. 45 investments per annum, of which ca. 35 were made into new investee companies. The average investment size was ca. £55,000. Since 2004, the Programme has increased the average amount of money invested into companies to ca. £100,000 and the total number of investments in new companies per annum has decreased to ca. 25.'
Here we go - more money pumped into fewer projects. Thus an increase in risk. The original aim was to invest no more than £50k per project. And the pre-2004 average investment of £55k appears to be contradicted elsewhere by the statement:
'By 2004 the Programme had approved £13.9m in 224 separate transactions, of which 46 were for further funding to existing investees. The average investment size was £73,060.'
What accounts for the discrepancy between £55k and £73k per investment? Is it the result of piling more money into existing projects, thus adding yet further to the risk? We simply don't know.

'The applicants rejected by the I&I Programme have a significantly lower expected economic impact than those invested into, demonstrating that the I&I Programme selects stronger companies over weaker ones and indicating the extent to which the I&I Programme can add value to its investees. It also shows that the pool of investments that the I&I Programme can choose from is generally of low quality.'
Unless we're missing something, the first sentence makes no sense. The justification for the second sentence is therefore obscure. It sets the tone though for the dismissiveness of inventor-led projects that is to come.

'Overall, the estimated economic impact that the Programme is estimated to achieve over the next five years is substantial. We currently [2005] estimate the Programme's investee companies to achieve an additional economic impact of £94m ± £36m by early 2011. This compares with approximately £20.3m that the Programme has expended so far.'
Given the sharply reduced value of the investment portfolio reported in the latest NESTA accounts, this now sounds like extreme optimism. The term 'economic impact' needs explaining. Does it mean 'book' value - guesswork, in other words - or actual trading figures? If the latter, it would be useful to know how many of the 'investee companies' are actually trading, and with what success.

'It largely attracts applicants to the Programme which the Programme chooses not to invest in. The Programme has addressed this problem by reaching out much more actively, identifying investible businesses and attracting co-investment, as well as following investment to the investee companies of the Programme. As a result, the quality of the companies that have been invested in has increased and the investment community is much more knowledgeable about the Programme.'
Pivotal. Translated, this means: 'NESTA felt it was getting too many rubbish applicants, so it decided to go out and look for better ones that would make investors happier'. The first sentence is almost bizarre, given that an open programme aimed at private inventors was always bound to attract many no-hope applications. Calling this a 'problem' and effectively walking away from it is pretty silly.

'Our analysis shows that the overall quality of applicants that the Programme currently attracts is low. This, combined with a filtering mechanism that does not remove low quality applications efficiently, does not allow the I&I Team to concentrate its efforts effectively. We recommend that for the time being, NESTA concentrates its efforts on the number of high quality companies that it sees, until it develops a mechanism for attracting a larger number of high quality applicants and screening and reviewing proposals more quickly and with better results.'
More bad news for inventors, now all tarred with the 'low quality' brush. And we take issue with the bit about 'a filtering mechanism that does not remove low quality applications efficiently'. For the duration the I&I Programme, abettermousetrap.co.uk personnel were the main external filtering team. We turned round most applications (in fact all of them where there was no request for additional information) within the contracted 15 days. Many were same-day turnrounds, most within a week. The filtering system set up by NESTA was fundamentally very efficient, so where was the problem? We might have been able to enlighten The Library House had they asked us for information - but they never did. An odd omission from an otherwise thorough piece of research, and a wasted opportunity. There was much we could have told them about what was right and wrong with the I&I Programme - but then, we believed in it, so our opinions might have been unwelcome.

'NESTA should focus on what valuations it needs to generate a 5% annual return across its entire portfolio, including cost. We therefore recommend not investing in companies where NESTA thinks it cannot generate its target return, regardless of the principle merit of the idea.'
An example of NESTA being urged to think of itself as a company behaving strictly self-interestedly (as most companies must) rather than as an organisation intended to promote the interests of inventor-entrepreneurs. All the emphasis seems to be on 'valuations' rather than on the practicalities of getting inventions to market.

'”Inventor” is defined as a person with no prior experience of starting a business, who has a very strong interest in the technological aspects of an innovation, but limited interests in building a business in order to commercialise this innovation. [...] In our discussion with the I&I Management, it has become clear that NESTA [...] has started to concentrate on investing in investees which are more of the entrepreneurial type. We think this is a step in the right direction, as it is likely to increase the efficiency of the Programme.'
A casual denigration of inventors, most of whom have a very keen interest in the business of commercialising their inventions. How else do they make money? In fact, we're aware of at least one NESTA-funded inventor who feels strongly that NESTA actually thwarted his efforts to be entrepreneurial.