Venture Capital Funds
Venture Capital is capital provided by full-time, professional firms (venture capitalists) who invest with management in ambitious, fast-growing companies with the potential to develop into significant businesses.
In addition to injecting cash into the company, the venture capitalist is likely to add considerably to the credibility of the company and to supply management expertise, support and access to their contacts. As part of their mentoring and monitoring of their investment, they are likely to seek board membership.
In contrast to bank finance, venture capitalists are not looking for scheduled repayment, but for a minority of the share capital of your company in return for cash. The venture capitalists will typically look to realise their investment in five years, either through floatation on a public market, a trade sale or for their stake to be bought out by the company.
Venture Capital funds usually invest in companies that are raising €500k+ in equity. The companies must be in a fast-growing, attractive sector, with a strong management team and demonstrable skills. The product/service must solve a clearly identified problem.
Is Venture Capital an option for you?
- Does my company have high growth prospects and is my team ambitious to grow the company rapidly?
- Does my company have a product or service with a competitive edge or unique selling point?
- Can it be protected by intellectual property rights?
- Can I demonstrate relevant industry experience?
- Does my team have the relevant skills to deliver on the business plan fully?
- Am I willing to sell some of the company’s shares to a private equity investor?
- Is there a realistic exit opportunity for all shareholders in order to realise their investment?
- Am I prepared to accept that my exiting this business may be in the best interest of all of my shareholders?
If your answers are “yes”, external equity is worth considering. If “no”, it may be that your proposal is not suitable for venture capitalists and it may take additional work on your behalf to make the proposal “investor ready”.
The ideal Venture Capital Investor will have the following:
- a strong commercial track record
- excellent business credentials
- capacity to invest
- ability to identify commercial opportunity
- time to invest in the development of a young company
- established links and relevant industry contacts
- a clear exit strategy and ability to follow its money until that point
Which Venture Capitalists should you talk to?
When considering venture capital, it is important to ensure you are talking to the right people. This is dependent on the venture capitalists:
- Area of expertise
- Area of interest
- Current availability of capital
- Risk exposure in the same sector
How can we help you?
Enterprise Ireland can assist companies who wish to raise venture capital funding to grow their businesses. Enterprise Ireland does not act as a broker, but can assist companies with contact details and specific areas of interest for the major Irish venture capital companies. In addition, Enterprise Ireland can assist you with introductions to these specific venture capital funds.
Enterprise Ireland partners with Venture Capital funds to provide finance. The 2007 - 2012 Seed and Venture Capital Scheme was launched to improve access to finance for small and medium sized enterprises and to further develop the Seed and Venture Capital Industry in Ireland.
Venture Capital Funds in Ireland
Over €800m in funding is available in Ireland through networks of angel investors, seed and venture capital and development capital firms. A total of €685m is under management in EI-supported SVC funds. The funds currently open for new applicants include;
Development Capital Funds
The Development Capital Scheme is aimed at providing funding for the mid-sized, export-oriented businesses that are so crucial to our growth – particularly manufacturing and technology companies in traditional sectors including engineering, food, life sciences, services and electronics. The Funds will typically invest between €2-10million in equity, quasi equity and debt.
Innovation Fund Ireland
Innovation Fund Ireland provides a unique opportunity for leading international venture capital fund managers to establish their European headquarters in Ireland and access entrepreneurs and innovative companies. Ireland already has a very active venture capital industry and Innovation Fund Ireland is an initiative to further increase the availability of risk capital for innovative companies.
Key contacts/more information
Enterprise Ireland clients should contact their Enterprise Ireland Adviser or a member of the Growth Capital Team:
Growth Capital Department
Growth Capital Team
+353 1 727 2000