Finding Investors For Your Startup In Ireland
Sourcing private capital for your business start up can be incredibly difficult. Luckily, there's a treasure trove of free information available on the web on who to ask and where to find the perfect investor for your start up. Remember, no matter what option you choose, you more you invest in your company yourself, the stronger bargaining position you will be in with potential investors. This doesn't necessarily have to be money - it can be your time, intellectual property rights or equipment.
Founders, Family & Friends - Usually the first port of call, family and friends can provide great help during the initial start up phase of your business. Once you've combined your personal contribution and any investments from family and friends, head to your local enterprise office. Your local enterprise office may be able to provide you with a like-for-like matched funding.
Tax-Based Schemes - Get in touch with the Revenue and you might be eligible for one of their tax-based schemes. The first scheme is the Revenue Seed Capital Scheme allows qualifying start-up companies to claim a rebate on investment made in their new enterprise based on the individual’s income tax payments for the previous 6 years. The Revenue Employment Incentive and Investment Scheme allows individual investors to obtain income tax relief on investments made, in each tax year, into Employment Incentive and Investment (EII) Scheme certified qualifying companies.
Business Angels (BES, Angel Networks) - Business Angels are the biggest source of investment for start ups. They're typically successful entrepreneurs that have made their money from previous investments. As well as investing their money in your business, they will also bring a wealth of business knowledge and experience with them. Investments can run from €20,000 - €500,000, the higher levels usually reserved for Business Angel Syndicates. The best way to find your next Business Angel is your local business innovation centre (BIC), IntertradeIreland, Halo Business Angel Network or Enterprise Ireland.
Corporate Venturing - this involves one company providing venture capital to another company. You'll find most corporate venturing tends to stick to companies within their own sector. You'll find corporate venturing companies will invest in very early stage start-ups if they think it fits in with their own research and direction as a company.
Seed Capital Funds - these are a popular option for early-stage companies. A seed capital fund involves your receiving an investment in exchange for equity in your company.
Enterprise Ireland currently support €124 million in seed capital funds. There are four main seed funds for companies in Ireland:
- AIB Seed Capital Fund - €53m
- AIB Start-up Accelerator Fund - €22m
- Bank of Ireland Early Stage Equity Fund - €32m
- Bank of Ireland Start-up and Emerging Sectors Equity Fund - €17m
Venture Capital Funds - these are provided by full-time venture capitalists. By getting a venture capitalist's cash investment, you'll also get access to their industry contacts, managerial advice and the added bonus of their company's credibility onto your start up. In return for all their input, venture capitalists will most likely want board membership or a minority of the share capital of your company.
To get venture capital funds you must be raising €500k+ in equity and be in a fast-growing, attractive sector.
Funds currently open for new applicants include:
- Atlantic Bridge Venture Fund - €67m
- Atlantic Bridge Venture Fund II - €75m
- Bank of Ireland Kernel Capital Partners - €51m
- Delta Partners - €105m
- Fountain Healthcare Partners - €73m
- Seroba Kernel Lifesciences - €75m
- NCB Ulster Bank Diageo Fund - €75m
- The Frontline Ventures Fund - €20m
- SOS Ventures Ireland Fund - €20m
Development Capital Funds - If you're a mid-sized exporter based in Ireland, you may be able to avail of the Development Capital Scheme. There's between €2 million and €10 million available to companies in manufacturing, electronics, technology, engineering, food and life sciences.
There are also these three development capital funds available for Irish companies:
- MML Capital Ireland - €125m
- BDO Development Capital Fund - €75m
- Cardinal Carlyle Ireland Fund - €290m
Innovation Fund Ireland - Companies included in Innovation Fund Ireland include: Sofinnova Ventures, Polaris Partners, Highland Capital Partners Europe and DFJ Esprit.
Public Listing - Initial Public Offering (IPO)is known as going public. It's a company's first sale of their shares to the public. There are benefits and disadvantages of putting your stock on the market and you should consider what is best for your company if you're considering going public. Most companies go public by joining a stock exchange. Irish companies typically join the Irish Stock Exchange, AIM London Stock Exchange for smaller companies, London Stock Exchange (Main Market) and NASDAQ (National Association of Securities Dealer Automated Quotations).