Venture firms set to invest €1bn in developing projects

VENTURE capitalists have plenty of cash to invest in worthy startup and developing enterprises, the Irish Venture Capital Association (IVCA) declared yesterday.

IVCA companies have more that 1bn invested in developing companies according to association chairman Conor O’Connor.

He said despite the lack of IPO (initial public offering) exit mechanisms, member companies have plenty of resources to invest in new projects.

Mr O’Connor said a survey of IVCA members, published yesterday, found that three quarters of Irish venture capital companies plan to increase investment in new projects this year.

“Despite an uncertain global and local economic outlook, this finding is positive news for Irish companies seeking funds over the next 12 months. It suggests that venture capital companies, as long term investors, are continuing to invest in new projects.”

The survey found that almost 80% of members of the IVCA say they will invest more in new projects in 2003, 14% said they will invest less and 57% expect they will invest more or the same in their existing projects.

The IVCA report suggests there will be very limited IPO activity before 2005 and that trade sales will provide the best exit mechanisms for VC investors in the short term.

The survey found 86% did not expect any IPO activity amongst client companies before 2005, while 14% expected any of their client companies to IPO over the next two years. All respondants expect one or more of client companies to be involved in a trade sale.

“While most commentators had written off any IPO activity this year the majority of our members do not see much happening next year either,” he said.