Founders face several barriers when scaling in Ireland, new survey reveals 

Over 30% respondents to the survey said that access to VC funding in Ireland is 'very poor'

One of the main obstacles for founders in Ireland is the lack of access to venture capital investment, according to Ibec's new report.

Irish entrepreneurs face several barriers when trying to scale their companies domestically, according to a new report.

One of the main obstacles for founders in Ireland is the lack of access to venture capital investment, according to a report by business representative group Ibec. 

“There needs to be more pillar venture capital funds incentivised to be based out of Ireland. A company will quickly outgrow the Irish funding ecosystem,” said an Ibec member who works in a medical technology company.

Traditionally, a lot of VC funding is sourced internationally, which may result in shorter-term investments with limited scope for Irish firms to scale in the future, Ibec said.

Over 30% of respondents said access to VC funding in “very poor” in Ireland. Initiatives have been introduced to make funding more available for entrepreneurs.

The Irish Innovation Seed Fund programme was recently launched to help companies secure funding. This programme incorporates the European Investment Fund, Enterprise Ireland, and the Ireland Strategic Investment Fund.

Ibec's director of membership and sectors, Sharon Higgins: '[R]ising interest rates, increased asset and labour prices, and difficulty in accessing capital and attracting talent are all beginning to stifle innovation and growth of the domestic founder-led ecosystem.' File picture: Conor McCabe

VC funding for Irish tech companies in particular was quite strong at the start of the year, increasing 21% to a record €778m, according to the Irish Venture Capital Association (IVCA).

In a survey, the IVCA found that this was due to a “stellar” Q1 performance when funding reached €380m. However, funding in Q2 crept up 2% to reach €398m.

“It was a strong first half overall for Irish tech companies raising funds, especially when one considers the geopolitical and economic headwinds and downturn in publicly quoted technology stocks over this time,” commented Leo Hamill, chairperson of the IVCA. He added: 

It remains to be seen whether the significant slowdown in growth in the second quarter to under 2% heralds a more difficult second half to the year. 

Staffing issues and the availability of tax reliefs were other challenges facing entrepreneurs, the Ibec survey found.

“Our survey findings show that rising interest rates, increased asset and labour prices, and difficulty in accessing capital and attracting talent are all beginning to stifle innovation and growth of the domestic founder-led ecosystem,” said Ibec’s executive director of membership and sectors, Sharon Higgins.

The lobby group recommended that eligibility for visas and work permits need to be re-evaluated in an effort to boost the workforce. 

It also recommended that improvements should be made to tax incentives such as capital gains tax relief, R&D tax credit, and employment incentive and investment scheme to make them more accessible.