TWENTY brilliant ideas in York could hatch into real business ventures this year with the launch today of a York Innovation Fund.

Science City York, the partnership between the University of York and City of York Council, has announced the fund for new and start-up busineses within the city's expanding knowledge and technology-based sectors.

It means that anyone in York who can prove that their brainwave would technically work, be economically produced, cater for a big demand and ultimately make a profit, can attract capital investments of anything between £3,000 to £10,000.

The project, which is also being backed by Yorkshire Forward, the regional development agency, is Science City's response to a report it commissioned last year on how to improve technology transfer - or the process of translating ideas into viable businesses.

The report found that one of the main barriers was a paucity of finance in York of the kind obtainable in deprived areas like South Yorkshire - and that outside the university there was no "proof of concept" funding for early stage ventures.

The money - believed to be up to £100,000 initially in the pot - will help about 20 newcomers to start trading this year by pinpointing needs that will speed the process of establishing a sustainable, money-making business; secure adequate intellectual property rights; conduct market analysis and research; help with Internet design and marketing support and help with prototype design and assessment.

Funding will be offered on a part-equity, part-debt basis. That way, should the brainwave turn into a bonanza, return on the investments will be recycled into the fund.

The new fund, which concentrates on getting good ideas to the point of trading, complements another bridging idea, the 20-month-old York Technology Growth Scheme for ventures which are already at the point of trading.

Seven banks linked up with York Business Development Ltd as well as Science City York and business "angels" to pledge nearly £7 million towards the Technology Growth Fund, which plugs the equity gap for businesses needing up to £250,000 to take "that next big step."

The initiative takes advantage of the under-used Small Firms Loan Guarantee Scheme in which the Government underwrites up to 85 per cent of investment by banks in small firms with workable and marketable ideas.

York Development Ltd will also administer the new York Innovation Fund so that, theoretically, there should be continuity of finance from brainwave to full-scale production.

Andrew Griffiths, Science City York's business promoter, said: "One of the main barriers to starting a successful business is the lack of capital available to thoroughly research the potential and viability of the core business concept before beginning to trade.The York Innovation Fund will now be able to provide this capital, reducing the risk of new business failure and increasing the development of successful enterprisers and jobs for the future."

Applicants should phone Mr Griffiths or Carolyn Rendall on 01904 554642

Updated: 12:04 Tuesday, February 24, 2004