Lack of funding for young firms feared

Cross-border business development agency, InterTrade Ireland, has warned of a “funding gap” in post-seed capital financing for Irish companies.

At its annual Venture Capital Conference, in Belfast yesterday, the agency noted that the current landscape — with regard to seed funding for small companies — has never been better, in relation to both business angel finance and seed venture capital. However, it added that a “funding gap” in post-seed financing is possibly developing.

“There is strong evidence from across Europe, that governments need to continue to take a lead in pump priming venture capital funding for seed, early-stage and expanding companies. Northern Ireland and Ireland are no exceptions. The high risks of investing in these equity investment stages often don’t appeal to the private sector. However, there are potentially huge rewards for the broader economy when the state takes a lead in these critical investment stages,” InterTrade Ireland said, yesterday, in a message which mirrored feelings from many of the conference’s speakers.

“Given that many private sector funds have dried up, this has led to a funding crisis for many VCs,” according to Regina Breheny, director general of the Irish Venture Capital Association.

InterTrade Ireland chief executive, Liam Nellis said: “Research shows that venture capital-backed businesses achieve stronger turnover growth, profit growth and job creation than firms without VC funding.

“In the current environment, it can be very difficult to fund a growing business. This is particularly so for SMEs and, yet, there are many opportunities out there. The aim ofthe conference is to highlight the range of funding options available for businesses and discuss how best to access them.”