Founders, Family & Friends
When you want to raise finance you have a number of options available. You provide the capital yourself, you borrow the money (debt) or you get an investor (equity). The route to take is very much dependent on your capital need, what you need it for and on the type of venture you are considering. Regardless of the options, you will be expected to put some of your own capital in the new venture. That could be sweat equity (your time), sales, equipment, intellectual property rights and/or money. The more you put in yourself, the stronger your bargaining position with financers.
The main sources of capital at this early stage are:
The ideal Investor will have the following:
- A clear understanding of the nature of the business and their role in it
- A willingness to agree terms prior to making the investment
- Knowledge of the funding journey that a start-up business typically undergoes
- A well-defined exit strategy should the business prove successful
- The capacity to, and understanding that they may, lose the value of their investment
What funding or support is on offer?
If you are investing your own funds in your start-up business or have raised funding from family and friends you should contact your Local Enterprise Office or Enterprise Ireland to check if you qualify for matching funding. Please note that funding from these sources will be subject to eligibility criteria. There are also two important tax based schemes that are available from Revenue.
- The Revenue Seed Capital Scheme allows for promoters of 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 year. The individual claiming relief must be a full time employee or a full time Director of the company.
- 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. There is no tax advantage for the company in receipt of the EII, but securing EII status may enhance their ability to attract other external funding.
Certification for Seed Capital Scheme and Employment Incentive and Investment Scheme Applicants is a matter for the Revenue.