Need for Co-Investment Fund To Boost Angel Financing in Ireland
Urgent Need for Multimillion Euro Co-Investment Fund To Boost Levels of Angel Financing in Ireland – Expert·
International business angel expert calls for co-investment fund to increase financing for early stage, high potential firms· Co-investment fund should be designed along lines of stg£75 million fund in Scotland·
Dublin, IRELAND – April 13th 2010: An international expert on angel financing has called on the Irish Government to help create a multimillion euro co-investment fund in Ireland to support the development of high potential, early stage firms in a range of high-tech sectors, from information technology to life sciences.
Nelson Gray, who is a board member of LINC Scotland, the Scottish national angel investment network, said the Irish Government needed to actively consider setting up a fund similar to the stg£75 million Scottish Co-investment Fund (SCF), managed by Scottish Enterprise and used to support indigenous, early stage enterprises in Scotland. Mr. Gray – who was speaking in Dublin at a seminar organised by the Halo Business Angel Network (HBAN), the national network for angel investing in Ireland – said the Irish Government should use the new, early stage funds, announced by a number of Irish owned banks, as a foundation for the setting up of the co-investment fund.
“Governments have to take steps to promote investment by private investors in indigenous firms in high growth industries, like life sciences, medical devices and information technology. In Scotland, we found that the establishment of the SCF, to invest funds alongside private investors, helped to bring a viable angel capital industry into being,” said Mr. Gray. “Scotland actually has an economic and demographic profile not dissimilar to Ireland’s, and we have found that the co-investment fund has, overall, had a hugely positive impact, in terms of fostering investment in local industry from business angel investors and offering a critical source of finance for early stage entrepreneurs,” he said.
Figures from Scottish Enterprise for 2009 show that, since the SCF was set up in 2003, there has been stg£114 million invested in 154 companies, with half of this investment coming from syndicates of angel investors. The SCF operates on the principle that any investments by business angels through a formalised syndicate will be matched under the same terms and conditions by public sector funds. The maximum investment in any one deal is approximately stg£1 million, with most deals being around the stg£500,000 mark.
Diane Roberts, National Director, HBAN, said: “What is required here is the creation of an angel capital industry in Ireland, where individual investors and investment syndicates are systematically matched with appropriate investment opportunities. The importance of this kind of investment has already been highlighted in the Government’s Innovation Taskforce report as a means of increasing the availability of financing for high potential firms”.
Damien Callaghan, Intel Capital Director and member of the Government’s Innovation Taskforce, said: “To create the high value jobs we need, via new, innovative export-orientated companies, our entrepreneurs need easy access to risk capital. Experienced business people who invest their money and personal time into entrepreneurs’ businesses – i.e. business angels – are a fundamental element of an innovative economy”. “The Innovation Task Force recommended that the state help stimulate a strong and active business angel community.
The Scottish example and the strong results achieved shows how this can be done in a really innovative way,” said Mr. Callaghan.
HBAN, which was set up just last year as a joint initiative of InterTradeIreland and Enterprise Ireland, has already supported investment of more than €4 million in 21 Irish early stage enterprises, through its regional networks and investment syndicates. The 21 firms are from a range of high tech areas, including medical devices, mobile security solutions, life sciences and biotechnology solutions and software development.
About Halo Business Angel Network (HBAN): HBAN is an all-island umbrella group for business angel networks, dedicated to the promotion of angel investment and supporting the early stage entrepreneurial community in Ireland. HBAN operates regionally through the Dublin, Cork, Waterford, and Galway Business Innovation Centres (BICs) who each run local angel networks. Collectively HBAN actively works to increase the number of angel investors involved in investing in early stage companies and supports the formation of new and existing angel networks, both regionally and internationally, and within industry sectors. HBAN, which is a joint initiative of InterTradeIreland and Enterprise Ireland, also acts as a voice to Government, stakeholders, business and the media to promote the interests and needs of the angel investment community. Further information is available at: www.hban.org.
For further information contact:Diane Roberts, National DirectorHalo Business Angel NetworkT: 01 665 0420E: diane@hban.org