A GUIDE TO
Irish Venture Capital Association
in association with InterTradeIreland’s EquityNetwork
The Old Gasworks Business Park
Kilmorey Street, Newry
BT34 2DE, Co. Down
Tel: 028 3083 4151 3 Rectory Slopes,
(RoI: 048 3083 4151) Bray, Co. Wicklow
Fax: 028 3083 4155 Tel: 353 (0) 1 276 4647
(RoI: 048 3083 4155) Fax: 353 (0) 1 274 5915
Email: email@example.com Email: firstname.lastname@example.org
Web: www.intertradeireland.com Web: www.ivca.ie
Foreword by Desmond Fahey,
Chairman of the Irish Venture Capital Association 2
Foreword by Barry Fitzsimons,
Chair of EquityNetwork 3
An Introduction to Venture Capital 4
• What is venture capital/private equity? 5
• How do I make my company attractive to
a venture capitalist or an investor in general? 5
• Benefits of venture capital 7
• Questions to ask before approaching
a venture capitalist 8
• The Business Plan 10
The Role of the Non-Executive Director 14
Sources of Venture Capital 15
Glossary of Terms 28
Irish Venture Capital Association Council 33
Irish Venture Capital Association – Associate Members 34
EquityNetwork – Steering Committee 38
– Executive 38
Useful Contacts 40
Third Edition 1
A GUIDE TO
DESMOND FAHEY BARRY FITZSIMONS
Chairman of the Irish Venture Capital Association EquityNetwork, Vice-Chair of InterTradeIreland
The Irish Venture Capital Association represents members who IInterTradeIreland’s joint publication with the Irish Venture
professionally manage over 95% of the €1 billion managed by Capital Association, A Guide to Venture Capital, was first
venture capital funds in Ireland. The Irish VC industry is published in 2003. The Guide, the first of its kind, has become
relatively young by comparison to the U.S.A and Europe but is the first point of contact for anyone seeking information on
developing very well. During the last five years, our member venture capital on the island of Ireland. The Guide contains all
VC companies invested over €1 billion into over several hundred the sources of funding on the island, it aims to enable the
Irish enterprises. These companies today employ thousands of entrepreneur to see what funding is available and give pointers
Irish graduates and technically qualified personnel. The value on how to go about sourcing funding.
added to investee companies by experienced VC professionals
is very important for developing enterprises. InterTradeIreland’s collaboration with the Irish Venture Capital
Association in producing the Guide and in developing other
During 2004 divestments by Irish VC companies yielded €190 initiatives has certainly strengthened the quality of the service
million, achieved through trade sales, public offerings, debt InterTradeIreland is able to offer. As the industry body on the
repayment and sales to other investors. While an increase in island the IVCA is an excellent partner for EquityNetwork
divestment is to be expected at this stage of the venture across a range of venture capital initiatives.
capital life cycle, it also demonstrates that an exit market is
developing, providing the essential disposal mechanisms tothe InterTradeIreland now supports ‘Halo’ business angel networks
venture capital industry. Over €150 million of VC money is in Northern Ireland and the Republic. In the north through
still available for qualifying entrepreneurs however, the Irish Investment Belfast in collaboration with Invest NI and the NI
venture capital industry will require significant funding in Bankers Association and in the south through Dublin Business
2006 if the level of investment in internationally focused Irish Innovation Centre with the collaboration of Enterprise Ireland
enterprises is to continue at the rate required for our and the regional BICs.
knowledge economy. Research undertaken in 1999 by InterTradeIreland into private
This publication ‘A Guide to Venture Capital’ is published in equity provision on the island revealed a dramatic increase in
collaboration with EquityNetwork, gives details of our the amounts of private equity raised and invested in the
members, useful contacts, some other sources of financial previous decade. However, certain regions showed slower signs
funding and a glossary of terms. It is an excellent resource for of growth and a low level of uptake – due primarily to a
corporate financiers, accountants and lawyers as well as for shortage of quality deals rather than the availability of funds.
those seeking venture equity. I hope you find it useful. The research also highlighted a gap in the supply of equity
finance to early stage start up projects. This is not peculiar to
the local market but reflects the high level of risk of funding
such projects and the cost of managing the investment,
relative to the actual funds invested.
To address these shortfalls InterTradeIreland developed
EquityNetwork. EquityNetwork provides the following services
to the business community:
• Value added information services to businesses to assist in
making them ’investor ready’
• Signposting for businesses seeking equity finance
• Support for business angel networks on the north and south
of the island
• An island-wide education programme to raise awareness of
the availability and benefits of using private equity
2 I hope you continue to find the Guide useful. 3
A GUIDE TO
An Introduction to
Venture Capital/Private Equity is medium to long-term finance What is venture capital/private equity?
provided in return for a shareholding in unquoted companies.
For the purposes of this guide ‘Private Equity’ refers to Venture Capital/Private Equity; provides long-term, committed
‘Venture Capital’ and ‘Business Angel’ investments at stages share capital, to help unquoted companies grow and succeed.
in a company’s development, from the seed to expansion If you are looking to start up, expand, buy into a business,
stages, as well as management buy-outs and buy-ins. The terms buy out a division of your parent company, turnaround or
Venture Capital and Private Equity should therefore be revitalise a company, Private Equity could help.
regarded as interchangeable phrases. Obtaining private equity is very different from raising debt
The purpose of this booklet is to encourage you to start or a loan from a lender, such as a bank. Lenders, who usually
planning early when seeking finance to accelerate the growth seek security such as a charge over the assets of the company,
of your business. It will explain how a Venture Capitalist will charge interest on a loan and seek repayment of the
approaches the process of investing equity in a business and capital. Private equity is invested in exchange for a stake in
what you need to do to improve your chances of raising your company and, as shareholders, the investors' returns
equity. It gives guidance on what should be included in your are dependent on the growth and profitability of your
business plan, the most important document you will produce business. The investment is unsecured, fully at risk and
when searching for a private equity investor. The guide also usually does not have defined repayment terms. It is
demonstrates the positive advantages that venture this flexibility which makes private equity an attractive
capital/private equity will bring to your business. and appropriate form of finance for early stage and
knowledge-based projects in particular.
The main sources of private equity on the island are Venture
Capital Funds, Business Angels (private individuals who
provide smaller amounts of finance at an earlier stage than How do I make my company attractive to a
many private equity firms are able to invest at), Government Venture Capitalist or an investor in general?
Agencies (depending upon the sector your business operates
in, the presence of other investors and where the business is Many small companies on the island do not grow and so
in its development cycle) and Corporate Venturers. Corporate do not provide 'upside potential' for the owners other than
Venturers can be product related or service companies that to provide a good standard of living and job satisfaction.
provide funds and/or a partnering relationship between These businesses are not generally suitable for private equity
mature and early stage companies which may operate investment, as they are unlikely to provide sufficient financial
in the same industry sector. returns to make them of interest to an external investor.
This Guide's principal focus is upon Venture Capital Funds. High potential businesses can be distinguished from others
However, the investment criteria that both Venture Capital by their aspirations and potential for growth, rather than by
Funds and Business Angels apply when assessing potential their current size. Such businesses are aiming to grow rapidly
investee companies is often very similar - therefore the to a significant size. As a rule of thumb, unless a business can
guide will benefit entrepreneurs and their advisers looking offer the prospect of significant turnover growth within three
for private equity from both these sources. In short, the to five years, it is unlikely to be of interest to a private equity
aim is to help you understand what Venture Capital Funds investor. This usually means that the market for the product
are looking for in a potential business investment and and service will not solely be on the island.
how to approach them.
Private equity investors are interested in companies with high
growth prospects, enjoy barriers to entry from competitors,
are managed by experienced and ambitious teams and have
an exit opportunity for investors which will provide returns
commensurate with the risk taken.
A GUIDE TO
Venture Capital Funds normally agree their investment Benefits of Venture Capital
criteria with those who have invested in the fund, for
example, preferred sectors and stages of development. In the current economic climate on the island, most fast
Business Angels also usually prefer to invest in projects growth start-ups are knowledge based. Given that these
which reflect their own skillsets or investment history. projects cannot offer tangible security to traditional debt
When approaching a Venture Capitalist or a Business Angel, financiers or predictable cashflows to service loans, private
it is important to understand if their investment criteria or equity is the obvious source of finance to fill the financing
preferences match your project. gap. Investment executives working with Venture Capital
Funds attempt to identify the best projects in order to
Earlier stage projects normally reflect a higher level of risk minimize their investment risk.
for equity investors, so it's important that entrepreneurs Research has shown that Venture Capital backed companies
explore all possible sources of finance when fundraising. grow faster than other types of companies, employ more
The diagram below highlights the likely sources of funds people and are more profitable when benchmarked against
for businesses at different stages of development. their peers. This is made possible by a combination of capital,
Venture Capitalists identifying and investing in the best
investment opportunities and input from Non-Executive
USE AND SOURCE OF PRIVATE EQUITY and Executive Directors introduced by the VC investor
IN BUSINESS DEVELOPMENT (a key differentiator from other forms of finance)
STAGE R&D START-UP EARLY ACCELERATING SUSTAINING MATURITY
CYCLE GROWTH GROWTH GROWTH GROWTH
Proof of Seed First Second Development Replacement
Concept Corn Round Round Capital Capital
TYPE OF Funding
Founders, Family and Friends
SOURCES Business Angles
FUNDING Venture Capital
A GUIDE TO
Questions to ask before This usually includes debt finance from banks to finance
approaching a Venture Capitalist working capital and asset purchases, grant aid from
development agencies and, indeed, an equity investment
Does my company have high growth prospects and from the promoters. Such an investment from the
is my team ambitious to grow the company rapidly? promoters/management team can help demonstrate
commitment to a project and may attract fiscal incentives
Does my company have a product or service with in the form of the Business Expansion Scheme, Enterprise
a competitive edge or unique selling point? Investment Scheme or Enterprise Management Incentives,
Can it be protected by Intellectual Property Rights? depending upon the jurisdiction the company is based in and
other criteria. Professional help should be sought to confirm
Can I demonstrate relevant industry sector experience? eligibility and benefits of these schemes at an early opportunity.
Does my team have the relevant skills to deliver The end result is likely to be a funding package which includes
the business plan fully? a cocktail of funders secured with the assistance of the
Am I willing to sell some of the company's shares to Venture Capitalist. It is this flexibility and value-added input
a private equity investor? from a private equity investor which differentiates them from
Is there a realistic exit opportunity for all shareholders
in order to realise their investment? Venture Capitalists look for capital gains from their investments.
They adopt a portfolio approach to their investments which
Am I prepared to accept that my exiting this business reflects their strategy to mitigate the risk of investing unsecured
may be in the best interest of all shareholders? funds in early stage companies. Before they invest, VC executives
If your answers are 'yes', external equity is worth considering. will consider the likelihood of realising their investment.
If 'no', it may be that your proposal is not suitable for venture After all, they are responsible for returning the cash invested
capitalists and it may take additional work on your behalf to in their fund with interest to their investors.
make the proposal 'investor ready'. The promoters ability to implement their business plan in
When seeking to raise capital to accelerate the development full is the obvious question, but just as importantly, can the
of a business idea, promoters must explore all possible company in question be sold to another trade player or find
sources of funds. It is likely that an equity investor will another way to redeem the venture capitalist's investment
usually help the promoters secure other sources of funds. within a reasonable time frame (usually between three and
A GUIDE TO
The Business Plan 1. The Product / Service
The business plan is the most important document for a In simple language, this should explain what exactly the
company seeking to raise finance from private equity investors. product / service offering is. This will clearly demonstrate
It should demonstrate what the business opportunity is, the unique selling point of your offering, differentiation from
the amount of funds required to deliver the business plan other products, barriers to entry etc and how your product /
and a management team capable of implementing it. service will add value to the purchaser.
Venture Capitalists read numerous business plans from
a wide range of sources and they must invest in the best 2. The Market
projects. Their first impression of your business plan will A common mistake that entrepreneurs make is to express
determine whether they take their interest any further. It is their market in terms of a global figure representing all activity
absolutely essential that your business plan demonstrates within their sector. The private investor requires comfort that
an 'investor ready' project. there is a commercial opportunity for your product/service
and that the management team has the ability to exploit
The following section is intended to give you a summary this opportunity.
of what the business plan should include:
The marketing section should demonstrate who the customer
base is likely to be, how the product / service will be priced,
Executive Summary how it will be distributed to customers, an analysis of
This is the key part of the document which must immediately competitors and how you will deal with competing goods
and clearly articulate the investment opportunity for the reader. and services.
The Executive Summary should make a potential investor It is unlikely that there will be no rivals in your market sector
believe that your unique proposition has the potential to make and you should avoid comments like 'there is no competition'
a good return on their investment and that you and your team or, 'our product is totally new'. If no one has thought of
have the ability to deliver what the plan says. offering a similar or competing product, is it conceivable
If this part of the Business Plan is not presented with that there is no demand for your product or that customers
conviction and in clear language, you may miss the do not realise that they need it?
opportunity of ensuring that a potential investor takes
the time to read your entire plan. 3. Management Team
Most venture capitalists will tell you that they invest in
The detailed plan should give full details under the people not ideas.
The management team must sell their experience to
1. The Product / Service investors as well as their understanding of the market which
they are targeting.
2. The Market
3. Management Team This section must convey the message that the team has
4. Business Process / Operations the full complement of skills required to deliver the plan.
Indeed, it is prudent to identify skill gaps which must be
5. Financial Projections addressed in order to deliver the plan as new investors in
6. Proposed Investment Opportunity a business can utilise their networks to fill the gaps.
Non-Executive Directors (NEDs) are an obvious source of
expertise for early stage companies to address this issue and
and Venture Capital Fund managers usually appoint a NED to
investor companies to help them avoid the pitfalls of growing
a business. Further details on NEDs can be found in the next
section of the guide.
A GUIDE TO
4. Business Processes / Operations 6. Proposed Investment Opportunity / Exit
This section explains how the business operates, be that This is the opportunity to identify the level of funds required,
manufacturing products, delivering a service, or both. how and when they will be spent, and an outline showing
It should demonstrate that any necessary R&D can be fully how investors will receive a return on their investment.
undertaken and that an appropriately skilled workforce As with the financial projections the exit opportunity should
is available. be realistic and take account of current market conditions.
The location of the business and the physical infrastructure It cannot be stressed too much that the Business Plan is the
will also be detailed. Care should be taken to demonstrate single most important document that you will provide for
that there is sufficient flexibility within systems, facilities and potential private equity investors. It must be coherent, well
human resources to expand the business in line with its presented and of a length which maintains the interest of
projected growth. the reader. It is essential that you strike a balance between
providing the investor with sufficient information to evaluate
Whilst there may be a market for the product/service being the investment opportunity while not overloading them with
offered, you must ensure that the proposed location, process technical information.
and utilisation of resources (human and physical) are the best
available to exploit this opportunity.
5. Financial Projections
An investor will always wish to review a detailed set of
integrated financial projections which encompasses profit
and loss accounts, balance sheets and cashflow statements.
These figures will be supported by detailed assumptions
which reflect the content of the business plan.
The projections must be realistically achieveable, but they
must also be sufficiently ambitious to demonstrate that there
is an attractive investment opportunity. These projections will
form the basis of any term sheet which an equity investor
Negotiation with the Venture Capitalist over valuation, future
milestones and ultimate exit opportunities will be influenced
by the delivery of the financial projections. Much consideration
should be given to this section to produce realistic projections
and indicate an openness to work with the investor in the
future to deliver a common goal – the maximising of value.
A GUIDE TO
The Role of the
Non-Executive Director Sources of Venture Capital
The considerable amount of media attention on the issue Fund Managers/Funds
of corporate governance has highlighted the role of ACT VENTURE CAPITAL
Non-Executive Directors. It is well documented that Niall Carroll FUND SIZE
Non-Executive Directors can make a significant contribution MANAGING DIRECTOR €300m
to company performance regardless of size. The use of Richview Office Park, INVESTMENT RANGE
Non-Executive Directors is one way of accelerating the Clonskeagh, Dublin 14 €750,000 – €15m
development and growth of SMEs and whether it is a T. 01 260 0966
longstanding traditional business or a start-up seeking equity F. 01 260 0538
Information and communications,
finance, non-executives can bring added value with objectivity technologies, medical devices and
drawn from their own experience and skills. life sciences.
It is normal for Venture Capital investors to place a ACT's funds are sourced from leading domestic and international financial
Non-Executive Director on the Board of the investee company institutions. Investments are made in companies at all stages of their
to represent their interests. This can either be one of its own growth, with a particular interest in early stage companies. With its
fund managers or an individual who has sectoral, market, extensive contacts and widely experienced team, ACT plays an active
supportive role in helping companies to expand into international markets.
or management expertise which will help delivery of the
Most Venture Capitalists, however, recognise that the chemistry Laurence Endersen FUND SIZE
and teamwork between the non-executive and the existing DIRECTOR OF AIB EQUITY €25.4m
management team is crucial. As a result, the VC's Non-Executive AIB Equity, AIB International Centre INVESTMENT RANGE
IFSC, Dublin 1
Director is there to play an integral role in the development of €250,000 – €750,000
T. 01 641 7993
the company rather than act as a watchdog for their investment. F. 01 829 0269
This availability of outside expertise to the management team Domestic Technology Sector
represents a valuable asset for most companies, particularly
start-ups, and is one reason why Venture Capital is regarded
as a value-added source of finance for SMEs. NOTES
The fund is now closed to new investments.
Brian Stephens FUND SIZE
10 Fitzwilliam Square €1.4bn
Dublin 2 INVESTMENT RANGE
T. 01 661 2671 €15m.+
F. 01 661 3057 SECTORS
E. email@example.com All
A GUIDE TO
ALLIANCE INVESTMENT CAPITAL BOI VENTURE CAPITAL
Frank Traynor FUND SIZE Brendan Vaughan FUND SIZE
MANAGING DIRECTOR €9.5m FUND MANAGER €19m
CFI House, Clonskeagh Square INVESTMENT RANGE 40 Mespil Road INVESTMENT RANGE
Dublin 14 €500,000 – €2m Dublin 4 Up to €2m
T. 01 283 7656 T. 01 665 3443
F. 01 283 7256 F. 01 665 3484
E. firstname.lastname@example.org E. Brendan.Vaughan@boimail.com
w. www.alliance.ie W. www.boi.ie/venturecapital
The first Alliance Investment Capital Venture Fund was launched in 1999. Dublin based fund with regional offices in Tullamore,
Limited Partners are Royal Bank of Scotland Private Equity and Enterprise Galway, Limerick and Cork.
Ireland. CFI Equity Fund Limited is a sister company to Dublin based
corporate finance firm, Corporate Finance Ireland Ltd. The fund has
invested in five companies and is now closed for futher investments.
ANGLO IRISH CAPITAL PARTNERS CAMPUS COMPANIES VENTURE CAPITAL FUND
Pat Walsh FUND SIZE Patrick Ryan FUND SIZE
INVESTMENT DIRECTOR €15m CHIEF EXECUTIVE €7.6m
Stephen Court, 18-21 INVESTMENT RANGE Office 107, Adelaide Chambers INVESTMENT RANGE
St Stephens Green, Dublin 2 €500,000 – €2m Peter Street, Dublin 8 €100,000 – €600,000
T. 01 616 2705 T. 01 449 3200
F. 01 616 2895 F. 01 449 3299 Information Technology, Commun-
E. email@example.com E. firstname.lastname@example.org ications, Internet, Electronics,
W. www.angloirishbank.ie W. www.campuscapital.com Biotechnology, Medical – Other,
Consumer goods and other.
The fund provides equity capital for development capital, management Specialise in seed and early stage for companies registered in Ireland
buyouts/buyins and shareholder release. and promoted by graduates of Irish Universities.
BOI KERNEL CAPITAL PARTNERS PRIVATE EQUITY FUND CRESCENT CAPITAL
Niall Olden FUND SIZE Colin Walsh FUND SIZE
MANGING DIRECTOR €19m MANAGING DIRECTOR £14m
Unit 4, Westpoint Buildings, INVESTMENT RANGE 5 Crescent Gardens INVESTMENT RANGE
Westpoint Business Park, €300,000 – €1.5m Belfast BT7 1NS £250,000 – £750,000
Ballincollig, Cork SECTORS T. 028 9023 3633 SECTORS
T. 021 482 6030 All except property. F. 028 9032 9525 Manufacturing, tradable services
F. 021 482 6034 E. email@example.com and IT in Northern Ireland.
E. firstname.lastname@example.org W. www.crescentcapital.co.uk
The Fund invests in all sectors and in companies at all stages of One half of funding is allocated to the expansion funding of younger
development. From High Potential Start Ups to more mature MBO and companies. The balance of the fund is allocated to development capital
MBI opportunities. The maximum investment per company is 3m. for mature companies, MBOs and MBIs.
The Fund will also consider supporting high potential ‘pilot projects’ on
case by case basis.
A GUIDE TO
DELTA PARTNERS EMERGING BUSINESS TRUST
Frank Kenny FUND SIZE Teresa Townsley FUND SIZE
MANAGING PARTNER €130m PARTNER £1m
Fujitsu Building, South County INVESTMENT RANGE 38-42 Hill Street INVESTMENT RANGE
Business Pk, Leopardstown, Dublin 18 €500,000 + Belfast, BT1 2LB £25,000 – £150,000
T. 01 294 0870 T. 028 9031 1660 SECTORS
F. 01 294 0877 Communications technology, F. 028 9031 1880 Niche businesses
E. email@example.com software, life sciences. E. firstname.lastname@example.org
w. www.delta.ie W. www.emergingbusinesstrust.com
This fund is currently investing. Niche businesses with an emphasis on technology. The fund is
DUBLIN BUSINESS INNOVATION CENTRE ENTERPRISE EQUITY VENTURE CAPITAL GROUP
Alex Hobbs FUND SIZE Conor O'Connor FUND SIZE
The Tower, TCD Enterprise Centre €6.4m CEO €25m
Pearse Street, Dublin 2 INVESTMENT RANGE Dublin Road, Dundalk, Co. Louth INVESTMENT RANGE
T. 01 671 3111
€65,000 – €250,000 Mervue Business Park, Galway €150,000 – €1,250,000
F. 01 671 3330 T. 042 933 3167 / 091764814 SECTORS
E. email@example.com F. 042 933 4857 / 091764615 All sectors in the border, midlands
Technology-led IT, Telecoms,
W. www.dbic.ie E. firstname.lastname@example.org and the west region with the exception
Software and other sectors
W. www.enterpriseequity.ie of property retail and hotels.
Established by the International Fund for Ireland.
Dublin Business Innovation Centre manages the Dublin Seed Capital
Fund and Irish BICs Seed Capital Fund. The Funds were established by
Dublin BIC to provide seed and early-stage equity capital to emerging,
start up and developing companies across a range of technology-led sectors.
EIRCOM ENTERPRISE FUND ENTERPRISE EQUITY VENTURE CAPITAL GROUP
Maura Moore FUND SIZE Aidan Langan FUND SIZE
EXECUTIVE DIRECTOR €2.54m CEO £16m
53 Merrion Square 78a Dublin Road INVESTMENT RANGE
Up to £2m
Dublin 2 €38,000 – €508,000 Belfast, BT2 7HP
T. 01 647 1866 T. 028 9024 2500 SECTORS
F. 01 661 3897
F. 028 9024 2487
High growth sectors
Communications, other. throughout Northern Ireland
E. email@example.com E. firstname.lastname@example.org
W. www.eircom-enterprise-fund.ie W. www.eeni.com
NOTES Established by the International Fund for Ireland.
Eircom Enterprise Fund provides risk capital to young high growth
companies operating in the 'tmt' sector. The fund is now committed.
A GUIDE TO
ENTERPRISE EQUITY VENTURE CAPITAL GROUP GLANBIA ENTERPRISE FUND
Tom Shinkwin FUND SIZE Joe Doddy FUND SIZE
INVESTMENT EXECUTIVE €25m MANAGER OF INNOVATION SERVICES €6.3m
National Software Centre, INVESTMENT RANGE 74 Pembroke Road INVESTMENT RANGE
NSC Campus, Mahon, Cork €150,000 – €1,250,000 Ballsbridge, Dublin 4 Up to €750,000
T. 021 230 7127 SECTORS T. 01 660 9313
F. 021 230 7070 All sectors in the border, midlands F. 01 660 7904
Food and Beverage
E. email@example.com and the west region with the exception E. firstname.lastname@example.org
W. www.enterpriseequity.ie of property retail and hotels. W. www.glanbiaenterprisefund.com
Established by the International Fund for Ireland. Financed by Enterprise Ireland and Glanbia, the fund is dedicated to
investing in emerging food companies.
ENTERPRISE 2000 FUND GROWCORP GROUP LIMITED
Laurence Enderson FUND SIZE Michael Donnelly FUND SIZE
FUND MANAGER €13m CEO €12.7m
40 Mespil Road INVESTMENT RANGE 3015 Lake Drive INVESTMENT RANGE
Dublin 4 City West Campus, Dublin 24 €100,000 – €1.27m
T. 01 665 3494 SECTORS T. 01 466 1000
Fund fully invested SECTORS
F. 01 665 3482 F. 01 466 1002
E. email@example.com E. firstname.lastname@example.org
The Enterprise 2000 Fund, a seed capital fund set up in 1998 as a The fund is managed by Growcorp.
result of a partnership between Bank of Ireland and Enterprise Ireland,
is now fully invested. Funding is available for follow on investments
EVP EARLY STAGE TECHNOLOGY FUND HIBERNIA CAPITAL PARTNERS LIMITED
Gerry Jones FUND SIZE David Gavagan FUND SIZE
PARTNER €5m SENIOR PARTNER €77m
Arena House, Arena Road INVESTMENT RANGE Beech House, Beech Hill Office INVESTMENT RANGE
Sandyford Industrial Estate €300,000 – €700,000 Campus, Clonskeagh, Dublin 4 Up to €16m
Dublin 18 T. 01 205 7770
T. 01 213 0711 SECTORS
SECTORS F. 01 205 7771
F. 01 213 0515 ICT General Ireland North and South
The fund invests in early stage High Potential Start-ups (HPSUs). Part of the same group as Trinity Venture Capital.
A GUIDE TO
HOT ORIGIN FUND I IRISH BIOSCIENCE VENTURE CAPITAL FUND SEROBA
David Dalton FUND SIZE Peter Sandys FUND SIZE
CEO €4.1m DIRECTOR €20m
64 Lower Mount Street, Dublin 2 Alma House, Alma Road,
INVESTMENT RANGE INVESTMENT RANGE
T. 01 678 8480 Monkstown, Co. Dublin
F. 01 678 8477
€100,000 – €300,000m Up to €3m
T. 01 214 0400
E. email@example.com SECTORS
F. 01 214 0432
W. www.hotorigin.com Technology including software, Therapeutics, biotechnology,
hardware and bioinformatics medical devices, diagnostics,
enabling technology platforms
The fund invests at the seed and early stage in technology companies.
The fund will invest in seed and early-stage projects, in the
The investment is usually part of a bigger investment round.
biotechnology, pharmaceutical and medical fields, emerging from
leading research institutes, universities, research hospitals and from
existing companies. Managed by Seroba BioVentures.
ICC VENTURE CAPITAL MENTOR CAPITAL PARTNERS LIMITED PARTNERSHIP
Joe Concannon FUND SIZE Mark Horgan FUND SIZE
INVESTMENT DIRECTOR €230m CEO €16.5m
ICC Venture Capital, INVESTMENT RANGE Mentec House, Pottery Road INVESTMENT RANGE
Bank of Scotland (Ireland) Ltd, €1m – €10m Dun Laoghaire, Co Dublin €500,000 – €2.5m
72-74 Harcourt Street, T. 01 205 9716
Dublin 2 F. 01 205 9889
General ICT, microelectronics and software
T. 01 415 5555 E. firstname.lastname@example.org
F. 01 408 3516 with enabling functionality
The fund targets companies with high growth potential, MBO’s and Mentor Capital provides funding to companies who possess core,
P2P operating in Ireland. enabling technology with potential for significant impact on
ION EQUITY LIMITED NCB VENTURES LIMITED
Neil O'Leary FUND SIZE Michael Murphy FUND SIZE
CHAIRMAN & CEO N/A CEO 27m
Fitzwilton House INVESTMENT RANGE 3 George’s Dock, IFSC INVESTMENT RANGE
Wilton Place, Dublin 2 €500,000 – €1m Dublin 1 125,000 – 1.25m
T. 01 611 0500 T. 01 611 5942
F. 01 611 0510 F. 01 611 5987
Technology, communications General
E. email@example.com E. firstname.lastname@example.org
Does not provide seed capital. The European Investment Fund is an investor in this fund.
A GUIDE TO
NITECH GROWTH FUND UNIVERSITY CHALLENGE FUND (NI)
Theresa Wallis FUND SIZE Panos Lioulias FUND SIZE
PROJECT MANAGER €3m FUND MANAGER £2.75m
ANGLE Technology Limited INVESTMENT RANGE Lanyon North, Queens University INVESTMENT RANGE
12 Cromac Place, Belfast BT7 2JB €20,000 – €200,000 Belfast, University Road £50,000 – £100,000
T. 028 9024 4424 Belfast, BT7 1NN
F. 028 9032 6473 T. 028 9068 2321
R&D Seed-Technology related
E. nitechgrowthfund@ F. 028 9027 3899
ANGLETechnology.com E. email@example.com
W. www.nitechgrowthfund.co.uk W. www.ucfni.org
Established by Invest NI providing early stage funding to take an R&D Established by Queens and the University of Ulster.
Project to proof of concept and commercialisation
QUBIS LTD UU TECH LIMITED
Panos Lioulias FUND SIZE Sean Nelson FUND SIZE
CHIEF EXECUTIVE N/A MANAGER OF INNOVATION SERVICES N/A
Lanyon North, Queens University INVESTMENT RANGE University of Ulster, Cromore Road INVESTMENT RANGE
Belfast, University Road £10,000 – £50,000 Coleraine, BT52 1SA £20,000 – £250,000
Belfast, BT7 1NN SECTORS T. 028 7028 0073 SECTORS
T. 028 9068 2321 Early stage Technology companies F. 028 7028 0050 Incubators and
F. 028 9027 3899 E. firstname.lastname@example.org Intellectual Property
Established by Queens University. It has a portfolio of 34 technology Established by the University of Ulster.
companies based in N.I. with combined sales of £42m employing
over 653 people
TRINITY VENTURE FUND VIRIDIAN GROWTH FUND
John Tracey FUND SIZE Alan Mawson FUND SIZE
CEO €162.8m CHAIRMAN £10m
Trinity Venture Capital, Beech House INVESTMENT RANGE Clarendon Fund Mangers INVESTMENT RANGE
Beech Hill Office Campus, €500,000 – €1.5m 12 Cromac Place £50,000 – £300,000
Clonskeagh , Dublin 4 Belfast, BT7 2JB SECTORS
T. 01 2057700 T. 028 9032 6465
Technology Manufacturing or tradeable
F. 01 2057701 F. 028 9032 6473
services in Northern Ireland
E. email@example.com E. firstname.lastname@example.org
W. www.tvc.com W. www.clarendon-fm.co.uk
Trinity invests in early stage and expanding Irish technology companies. The fund is managed by Clarendon Fund Managers.
It is actively seeking new investment opportunities.
A GUIDE TO
WESTERN INVESTMENT FUND Other Sources of Funding
Gillian Buckley FUND SIZE
INVESTMENT MANAGER €32m ENTERPRISE IRELAND
Dillon House INVESTMENT RANGE
The mission of Enterprise Ireland is to accelerate Ireland’s
€63,000 – €317,000 national and regional development by working with Irish
T. 094 986 1441
F. 094 986 1443 companies to develop and compete so that they can grow
E. email@example.com in world markets.
Glasnevin, Dublin 9
Tel +353 1 808 2000 Fax +353 1 808 2020
The fund provides seed and venture capital to new and existing Merrion Hall, Strand Road, Sandymount, Dublin 4
businesses across a range of sectors in the western region. Tel +353 1 206 6000 Fax +353 1 206 6400
It will also consider MBOs/MBIs. Larger investments are considered
on a syndicated basis with other private investors. Wilton Park House, Wilton Place, Dublin 2
Tel +353 1 808 2000 Fax +353 1 808 2992
4TH LEVEL VENTURES/ UNIVERSITY SEED FUND LIMITED PARTNERSHIP www.enterprise-ireland.com
Dennis Jennings FUND SIZE
The Tower, TCD Enterprise Centre, INVESTMENT RANGE INVEST NORTHERN IRELAND
Pearse Street, Dublin 2 €75,000 – €500,000
T. 01 671 1288 Invest NI is Northern Ireland's economic development agency.
T. 01 671 1339 Established in 2002 under the Industrial Development Act
Life sciences, material sciences,
technology and ICT (Northern Ireland) 2002, its objectives are to:
• Promote innovation in all its aspects, stimulate higher
The fund was established to commercialise the business opportunities levels of R&D and deign and improve knowledge transfer,
that arise from university research. Investees will be high potential • Achieve higher levels of growth by indignenous and
businesses in the seed or early stages of their development arising out externally-owned businesses,
of research in Irish third level educational institutions. • Promote a more enterprising culture so as to raise
the overall level of business starts,
• Attract high-quality, knowledge based investment
from outside Northern Ireland.
44-58 May Street
Belfast BT1 4NN
Tel 028 9023 9090 Fax 028 9049 0490
Please note that the authors of the guide have made every effort to
ensure the accuracy of the information contained in this section of the
guide. However we are not in a position to give any guarantee as to
the accuracy of the information.
A GUIDE TO
Glossary of Terms
ACQUISITION – The act of one company taking over a DILUTION – The process by which an investor's ownership
controlling interest in another company. Investors often look percentage in a company is reduced by the issue of new shares.
for companies that are likely acquisition candidates, because
the acquiring firms are usually willing to pay a premium on DUE DILIGENCE – The process by which VCs conduct
the market price for the shares. This may be the most likely research on the market potential, competition, reference
exit route for a VC investor. interviews, financial analysis, and technology assessment.
Usually divided into commercial, financial, legal and
ANGEL FINANCIERS – The first individuals to invest commercial due diligence.
money in your company. For example, friends, family.
They do not belong to a professional venture capital firm EARLY STAGE – A fund investment strategy involving
and do not have similar monitoring processes. They often investments in companies to enable product development
believe in the Entrepreneur more than the actual product. and initial marketing, manufacturing and sales activities. Early
This capital is generally used as seed financing. stage investors can be influential in building a company’s
management team and direction. While early stage venture
ANTI-DILUTION PROTECTION – In the event a company capital investing involves more risk at the individual deal level
sells shares in the future at a price lower than what the VC than later stage venture investing, investors are able to buy
paid, an adjustment will be made to the % of shares held company stock at very low prices and these investments may
by the VCs. have the ability to produce high returns.
BOOTSTRAPPING – A means of finding creative ways EXIT STRATEGY – A fund’s intended method for
to support a start-up business until it turns profitable. liquidating its holdings while achieving the maximum
This method may include negotiating delayed payment to possible return. These strategies depend on the exit climates
suppliers and advances from potential partners and customers. including market conditions and industry trends. Exit
strategies can include selling or distributing the portfolio
BRIDGING FINANCE – Type of financing used to fill an company’s shares after an initial public offering (IPO), a sale
anticipated gap between more permanent rounds of capital of the portfolio company or a recapitalisation.
investments. Usually structured to enable them to become (See Acquisition, Initial Public Offering)
part of future rounds if successfully raised.
FUND FOCUS (OR INVESTMENT STAGE) – The
BURN RATE – The rate at which your company is indicated area of specialization of a venture capital fund
consuming cash, usually expressed on a monthly basis. usually expressed as Balanced, Seed and Early Stage, Later
CAPITAL GAINS – The difference between an asset’s Stage, Mezzanine or Leveraged Buyout (LBO). (See all of the
purchase price and selling price when the selling price is stated fund types for further information)
greater. Capital gains are usually subject to tax which may FUND SIZE – The total amount of capital committed by the
be mitigated by careful tax planning. investors of a venture capital fund.
CARRIED INTEREST – The portion of any gains realised “HOCKEY STICK” – Refers to a financial projection which
by a Venture Capital Fund to which the fund managers are starts modestly for a number of months and rapidly
entitled, generally without having to contribute capital to accelerates. “How much of a hockey stick is in the plan?”
the fund. Carried interest payments are customary in the
venture capital industry to create a significant economic INVESTMENT PHILOSOPHY – The stated investment
incentive for venture capital fund managers to achieve approach or focus of a fund manager.
INITIAL PUBLIC OFFERING (IPO) – The sale or distribution
CONVERTIBLE SECURITY – A financial security of a stock of a portfolio company to the public for the first
(usually preference shares) that is exchangeable for another time. IPOs are often an opportunity for the existing investors
type of security (usually ordinary shares) at a pre-stated (often venture capitalists) to receive significant returns on their
price. Convertibles are appropriate for investors who want original investment. During periods of market downturns or
higher income, or liquidation preference protection, than is corrections the opposite is true.
available from ordinary shares, together with greater
28 appreciation potential than regular bonds offer. 29
A GUIDE TO
LATER STAGE – A fund investment strategy involving NEW ISSUE – A stock or bond offered to the public for
financing for the expansion of a company that is producing, the first time. New issues may be initial public offerings by
shipping and increasing its sales volume. Later stage funds previously private companies or additional stock or bond
often provide the financing to help a company achieve issues by companies already public. New public offerings
critical mass in order to position itself for an IPO. Later are registered with the Securities and Exchange Commission.
stage investing can have less risk than early stage financing (See Securities and Exchange Commission and Registration)
because these companies have already established
themselves in their market and generally have a management OPTION POOL – The number of shares set aside for
team in place. Later stage and Mezzanine level financing are future issuance to employees of a private company.
often used interchangeably. PORTFOLIO COMPANIES – Portfolio companies are
LEAD INVESTOR – Each round of Venture Capital has companies in which a given fund has invested.
a lead investor who negotiates the terms of the deal and POST-MONEY VALUATION – The valuation of a company
usually commits to at least 50% of the round. immediately after the most recent round of financing.
LEVERAGED BUYOUT (LBO) – A takeover of a company This value is calculated by multiplying the company’s total
using a combination of equity and borrowed funds (or loans). number of shares by the share price of the latest financing.
Generally, the target company’s assets act as the collateral PREFERENCE SHARES – Form of equity which has rights
for the loans taken out by the acquiring group. The acquiring superior to ordinary shares. Most VC deals use preference
group then repays the loan from the cash flow of the shares which may convert to ordinary shares upon an IPO
acquired company. For example, a group of investors may or Acquisition.
borrow funds using the assets of the company as collateral
in order to take over a company. Or the management of the PRE-MONEY VALUATION – The value of the company
company may use this vehicle as a means to regain control before VCs cash goes into the business. VCs use the
of the company by converting a company from public to Pre-Money Valuation to determine what % ownership they
private. In most LBOs, public shareholders receive a will have in your company.
premium to the market price of the shares.
PRIVATE EQUITY – Private equities are equity securities of
LIMITED PARTNERSHIPS – An organization comprised of companies that have not “gone public” (in other words,
a general partner, who manages a fund, and limited companies that have not listed their stock on a public
partners, who invest money but have limited liability and are exchange). Private equities are generally illiquid and thought
not involved with the day-to-day management of the fund. of as a long-term investment. As they are not listed on an
In the typical venture capital fund, the general partner exchange, any investor wishing to sell securities in private
receives a management fee and a percentage of the profits companies must find a buyer in the absence of a
(or carried interest). The limited partners may receive both marketplace.
income and capital gains as a return on their investment.
PROPRIETARY INFORMATION – Any information
MANAGEMENT FEE – Compensation for the management uniquely possessed by a company which is not generally
of a venture fund’s activities, paid from the fund to the available to the public.
general partner or investment advisor. This compensation
PROSPECTUS – A formal written offer to sell securities
generally includes an annual management fee.
that provides an investor with the necessary information
MANAGEMENT TEAM – The persons who oversee the to make an informed decision. A prospectus explains a
activities of a venture capital fund. proposed or existing business enterprise and must disclose any
material risks and information according to the securities laws.
MEZZANINE FINANCING – Refers to the stage of A prospectus must be filed with the SEC and be given to all
venture financing for a company immediately prior to its potential investors. Companies offering securities, mutual
IPO. Investors entering in this round have lower risk of loss funds, and offerings of other investment companies
than those investors who have invested in an earlier round. (including Business Development Companies) are required
Mezzanine level financing can take the structure of to issue prospectuses describing their history, investment
preference shares, convertible bonds or subordinated debt philosophy or objectives, risk factors and financial statements.
(the level of financing senior to equity and below senior debt). Investors should carefully read them prior to investing.
A GUIDE TO
Irish Venture Capital
SECONDARY SALE – The sale of private or restricted • Desmond Fahey (Chairman)
holdings in a portfolio company to other investors.
• Niall Carroll (Vice-Chairman)
SEED MONEY – The first round of capital for a start-up
business. Seed money usually takes the structure of a loan
• Michael Donnelly (Secretary)
or an investment in preferred stock or convertible bonds,
although sometimes it is common stock. Seed money
provides start-up companies with the capital required for • Joe Concannon
their initial development and growth. Business Angels and
early-stage venture capital funds often provide seed money. • Shay Garvey
STOCK OPTIONS – There are two definitions of stock options.
• David Gavagan
The right to purchase or sell a stock at a specified price
within a stated period. Options are a popular investment
medium, offering an opportunity to hedge positions in other • Michael Murphy
securities, to speculate on stocks with relatively little investment,
and to capitalize on changes in the market value of options • Conor O’Connor
contracts themselves through a variety of options strategies.
A widely used form of employee incentive and compensation. • Karl Schutte
The employee is given an option to purchase its shares at a
certain price (at or below the market price at the time the
option is granted) for a specified period of years.
TERM SHEET – Typically a 3-5 page document which
outlines the fundamental business terms of a Venture Regina Breheny (Director General)
Investment. This document serves to drive at the final Tel 087 051 7754
business agreement of closing the deal. If you receive a
term sheet from a VC there is a high probability of closing Email firstname.lastname@example.org
and funding the deal. Ciara Burrowes (Administrator)
VENTURE CAPITAL – Money provided by investors to IVCA, 3 Rectory Slopes, Bray, Co. Wicklow
privately held companies with perceived long-term growth Tel 01 276 46 47 Fax 01 274 59 15
potential. Professionally managed venture capital firms Email email@example.com
generally are limited partnerships funded by private and
public pension funds, endowment funds, foundations,
corporations, wealthy individuals, foreign investors,
and the venture capitalists themselves.
WRITE-OFF – The act of changing the value of an asset
to an expense or a loss. A write-off is used to reduce or
eliminate the value an asset and reduce profits.
WRITE-UP/WRITE-DOWN – An upward or downward
adjustment of the value of an asset. Usually based on events
affecting the investee company or its securities beneficially
A GUIDE TO
Davy Corporate Finance
Irish Venture Davy House, 49 Dawson Street, Dublin 2
Capital Association Tel: 01 679 6363 Fax: 01 679 6366
Contact: Hugh McCutcheon
Deloitte & Touche
AIB Corporate Finance Deloitte & Touche House,
85 Pembroke Road, Dublin 4 Earlsfort Terrace, Dublin 2
Tel: 01 667 0233 Fax: 01 667 0250 Tel: 01 417 2200 Fax: 01 417 2300
Contact: Mon O' Driscoll Contact: David O’Flanagan
E-Mail: firstname.lastname@example.org E-Mail: email@example.com
Aventura Venture Partners Dillon Eustace
ICELT House/NCI International Financial Services Centre, Grand Canal House, 1 Upper Grand Canal Street, Dublin 4
Mayor Street, Dublin 1 Tel: 01 667 0022 Fax: 01 667 0042
Tel: 01 449 8715 Fax: 01 449 8749 Contact: Lorcan Tiernan
Contact: Maura Moore E-Mail: firstname.lastname@example.org
Ernst & Young
Baker Tilly O’Hare Ernst & Young Building, Harcourt Centre,
Merchants House, 27/30 Merchants Quay, Dublin 8 Harcourt Street, Dublin 2
Tel: 01 677 1003 Fax: 01 677 1829 Tel: 01 475 0555 Fax: 01 475 0594
Contact: Dick Byrne Contact: Sinead Munnelly
E-Mail: email@example.com E-Mail: firstname.lastname@example.org
BCM Hanby Wallace EquityNetwork
88 Harcourt Street, Dublin 2 The Old Gasworks Business Park
Tel: 01 418 6900 Fax: 01 418 6805 Kilmoney Street, Newry, Co. Down BT34 2DE
Contact: Colin Sainsbury Tel: 048 3083 4151 Fax: 048 3083 4155
E-Mail: email@example.com Contact: Gary Stokes
BDO Simpson Xavier
Bow Lane House. Mercers Street Lower, Dublin 2 Farrell Grant Sparks
Tel: 01 470 0000 Fax: 01 477 0000 Molyneux House,
Contact: Paul Keenan Bride Street, Dublin 8
E-Mail: firstname.lastname@example.org Tel: 01 475 8137 Fax: 01 418 2050
Contact: Jim Mulqueen
Eugene F. Collins E-Mail: email@example.com
Temple Chambers, 3 Burlington Road, Dublin 4
Tel: 01 667 5111 Fax: 01 667 5200 William Fry
Contact: Anthony E. Collins Fitzwilton House,
E-Mail: firstname.lastname@example.org Wilton Place, Dublin 2
Tel: 01 639 5000 Fax: 01 639 5333
Corporate Finance Ireland Contact: Alvin Price
1 Clonskeagh Square, Clonskeagh, Dublin 14 E-Mail: email@example.com
Tel: 01 283 7144 Fax: 01 283 7256
Contact: Frank Traynor A&L Goodbody
E- Mail: firstname.lastname@example.org IFSC, North Wall Quay, Dublin 1
Tel: 01 649 2384 Fax: 01 649 2649
Arthur Cox Solicitors Contact: John Olden
Earlsfort Centre, Earlsfort Terrace, Dublin 2 E-Mail: email@example.com
Tel: 01 618 0000 Fax: 01 618 0618
Contact: Kathleen Garrett Goodbody Stockbrokers
E-Mail: firstname.lastname@example.org Ballsbridge Park, Dublin 4
Tel: 01 667 0400 Fax: 01 667 0410
Contact: Brian O'Kelly
A GUIDE TO
Steering Committee EquityNetwork
EquityNetwork is a major initiative of InterTradeIreland,
Mary Ainscough Board Member – InterTradeIreland the Trade and Business Development Body. InterTradeIreland’s
Director of Equality – Dublin City University mission is to lead the development of the island economy
through distinctive knowledge-based interventions which will
Edward Cartin Former CEO – QUBIS Ltd
produce significant returns in the areas of cross-border trade
Barry Fitzsimons Chairman – EquityNetwork and business development.
Vice-Chairman – InterTradeIreland
Senior Director – Cunningham Coates
THE FOLLOWING SERVICES:
• Value added information services to businesses to assist
Charles Harding Executive Director
in making them 'investor ready'
– Corporate Finance & Restructuring Division
– Invest Northern Ireland • Signposting for businesses seeking equity finance
Denis Marnane Manager – • An annual private equity conference
Equity/Venture Capital Enterprise Ireland • An annual all-island seedcorn competition for the best
Feargal McCormack Board Member – InterTradeIreland business plans on the insland
Managing Partner – FPM Chartered • An island-wide education programme to raise awareness
Accountants of the availability and benefits of using private equity
Liam Nellis Chief Executive – InterTradeIreland • EquityNetwork has supported the development of ‘Halo’
business angel networks in Northern Ireland and Ireland.
Dr Martin Naughton Chairman – InterTradeIreland
. In Northern Ireland through Investment Belfast and in
Chairman – Glen Dimplex Ireland through Dublin Business Innovation Centre with
the collaboration of Enterprise Ireland and the regional BICs.
The EquityNetwork Executive For full details on all InterTradeIreland’s programmes visit
• Catriona Regan
InterTradeIreland, The Old Gasworks Business Park,
• Margaret Hearty Kilmorey Street, Newry BT34 2DE Co. Down
• Fergal McCann
Tel: +44 28 3083 4151 (RoI: 048 3083 4151)
• Gerry Moloney Fax: +44 28 3083 4155 (RoI: 048 3083 4155)
• Gráinne Lennon Email: email@example.com
• Anne-Marie Kearns
• Gary Stokes
A GUIDE TO
The Irish Venture Capital Association
The European Venture Capital Association
The British Venture Capital Association
The Institute of Directors in Ireland
The Institute of Directors Northern Ireland
The Office of the Director of Corporate Enforcement
HALO – The Northern Ireland Business Angel Network
Business Angel Partnership
The authors of the guide would like to acknowledge the contribution
of the Council of the IVCA, the EquityNetwork Steering Committee and
the British Venture Capital Association in preparing the Guide.