A number of funds are helping start-up companies reach their goals.
Last year was one of the most successful for Enterprise Ireland, seeing more entrepreneurs than ever before create companies, writes Trish Dromey
Despite tough economic times, more entrepreneurs than ever before set up companies in Ireland during 2012 and Enterprise Ireland is hoping to see even higher numbers this year.
“During 2012 we invested in over 150 companies in the start-up stage, including close to 100 High Potential Start-Ups (HPSU) as well as 60 companies under the Competitive Start Fund Programme,’’ said HPSU manager Tom Cusack, adding that this was a significant increase on previous years.
He said many of the companies use technology in creative ways to offer innovative products and services. A number of them are involved in web-based services and cloud computing.
“We are now seeing more than 3,000 proposals a year for the various programmes,” Mr Cusack said.
The HPSU programme on offer to companies with a typical investment of €250,000 has long been the main plank in Enterprise Ireland’s support for start ups, but the Competitive Start Fund, which started in 2011 offering equity funding for companies at an earlier stage, is now making a strong impact.
It provides a €50,000 equity investment for young companies in the ICT and industrial sectors. Enterprise Ireland also launched a number of regional Competitive Feasibility Funds, which provide early grant aid for start-ups.
“This has been very successful for young companies which need to do a certain amount of product validation to raise additional funding,’’ Mr Cusack said.
Last year Enterprise Ireland began targeting female entrepreneurs in the manufacturing and internationally traded services sectors, offering them Competitive Feasibility Funding and Competitive Start Funding.
In June, Enterprise Ireland had over 80 applications for the Competitive Feasibility Fund for females and provided feasibility funding to 20 companies, including Cork firm Dee’s Wholefoods and WizZki in Kerry.
In October, Enterprise Ireland launched a Competitive Start Fund for female founders of companies with scalable technologies, which can be sold internationally. Mr Cusack said funding for 10 companies will be approved early this year.
In Oct 2011, Enterprise Ireland created a €10m fund to attract entrepreneurs to relocate to Ireland and establish their start-ups here. “This year more than 12 or 13 projected were sourced from outside Ireland, all were HPSUs which came from the UK, the US, and Australia,” Mr Cusack said.
He believes Ireland’s success in generating start-ups is not just down to Enterprise Ireland but also to the presence of a growing number of accelerators.
These are privately owned companies which provide mentoring, incubation space as well as funding.
“We now have three of the top eight accelerator companies in Europe, including NDRC LaunchPad, the Propeller Venture Accelerator Fund, and Startupbootcamp with new groups such as Wayra and HealthXL coming on stream in recent months,” he said.
The participants in these accelerator programmes often go on to seek Enterprise Ireland funding at a later stage.
At a HPSU showcase in early 2012, details were released on 92 start-ups which had been helped by Enterprise Ireland the previous year. These are expected to generate 1,600 jobs over three years. They included Dublin company Connected Trips, which at the time employed five and was expected to add 17 more workers by 2014.
Mr Cusack said HPSUs helped by Enterprise Ireland last year are expected to create 2,200 jobs over the next three years. Companies on this programme which used technology creatively included Scurri in Wexford, which was set up to sell unused capacity in delivery trucks, and Cargo Defender in Donegal, which has a product to prevent theft in haulage trucks.
“Over the last 10 years Enterprise Ireland has invested in over 1,000 start-ups. Our success rate is very high compared to the international average, with more than 80% of our portfolio companies continuing to trade successfully,” Mr Cusack said.
He said the key difficulty for start-ups at present is not shortage of funding but the shortage of skilled IT staff. “We have a good supply of graduates but many lack the work experience that companies require and we are now looking at piloting a programme offering skills vouchers which will get senior developers to work with graduates and help them quickly develop the relevant skills.’’
Enterprise Ireland expects a high level of start-ups in 2013. “We have a strong pipeline, many companies which have previously been funded under the Competitive Start Fund will now be moving up to the HPSU programme,” he said.
Games companies are now becoming more prevalent and, according to Mr Cusack, 60% of competitive start funding is being allocated to internet and gaming companies. The range of innovative companies being supported this year include Sneaky Vegetables, which offers game-based learning for children.
Enterprise Ireland is continuing to look for entrepreneurs that have an internationally focused business with the potential to employ 10 or more people and generate €1m in revenues within three years of starting up.
Entrepreneurs who have business ideas in the ICT and Industrial sectors are invited to make an application to the Competitive Start Fund, which will open on Jan 9. Details can be found on www.enterprise-ireland.com.
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