Gerard O Brien EI BES SCS Presentation Cork

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Gerard O Brien EI BES SCS Presentation Cork

  1. 1. <ul><li>Financing New and Expanding Companies </li></ul><ul><li>BES & Seed Capital Scheme and the Role of Enterprise Ireland </li></ul><ul><ul><li>12th November 2007 </li></ul></ul><ul><ul><li>Cork </li></ul></ul>Gerard O’Brien High Potential Start Up Division Enterprise Ireland
  2. 2. Enterprise Ireland <ul><li>Established in 1998 </li></ul><ul><li>Responsible for supporting the establishment and growth of Irish owned and controlled enterprises </li></ul><ul><li>Clients are manufacturing and internationally traded services sector companies employing 10 or more and </li></ul><ul><li>City and County Enterprise Boards are responsible for companies employing less than 10 with the exception of High Potential Start Ups (HPSUs). </li></ul>
  3. 3. Types of new enterprises we support …. <ul><ul><li>- HIGH POTENTIAL START UP BUSINESSES - </li></ul></ul><ul><ul><li>What is a ‘High potential start-up’ business? </li></ul></ul><ul><ul><li>Company that manufactures or trades services internationally; </li></ul></ul><ul><ul><li>Usually product / services based on technological innovation; </li></ul></ul><ul><ul><li>Export oriented; </li></ul></ul><ul><ul><li>Involving industry experienced team </li></ul></ul><ul><ul><li>Potential for sales > €1m and 10 employees within 3/4 yrs </li></ul></ul><ul><ul><li>Irish owned and located in Ireland. </li></ul></ul>
  4. 4. Sources of Start Up Finance <ul><li>Entrepreneurs, Relatives and Friends </li></ul><ul><ul><li>3 F’s - Friends, Family and Fools often avail of </li></ul></ul><ul><ul><li>Seed Capital Scheme/BES </li></ul></ul><ul><li>Debt </li></ul><ul><ul><li>Bank loans, overdrafts, invoice discounting </li></ul></ul><ul><li>Venture Capital </li></ul><ul><li>Private Investors </li></ul><ul><ul><li>Wealthy individuals - BES </li></ul></ul><ul><ul><li>Cashed out entrepreneurs - BES </li></ul></ul><ul><ul><li>Business angels -BES </li></ul></ul><ul><ul><li>BES </li></ul></ul><ul><li>Development Agencies </li></ul><ul><ul><li>Feasibility Study grants </li></ul></ul><ul><ul><li>R&D grants </li></ul></ul><ul><ul><li>Employment grants </li></ul></ul><ul><ul><li>Preference shares </li></ul></ul>BES has been and will continue to be an essential feature of Ireland’s start up financing system
  5. 5. Background to the New BES/SCS and Changes <ul><li>Sustained campaign by DETE, Enterprise Ireland and Forfas </li></ul><ul><li>Government Commitment – Budget & Finance Bill but </li></ul><ul><li>EU Commission Approval Required </li></ul><ul><li>EU Commission Approval – 24th August 2007 </li></ul><ul><li>Clarification – EU, DETE, Finance,Revenue, EI </li></ul><ul><li>Commencement Order 6 th September 2007 </li></ul><ul><li>Effective 1 st January 2007 to 31 st December 2013 </li></ul><ul><li>However “Terms & Conditions Apply” </li></ul>
  6. 6. Main Changes <ul><li>Schemes extended 7 years </li></ul><ul><li>Company limit from €1m to €2m </li></ul><ul><li>Investor limit from €31,750 to €150,000 BES €100,000 SCS </li></ul><ul><li>Approval Vs Payment of Employment grant qualifies ITS companies (previously needed payment) </li></ul><ul><li>Recycling Companies must be in receipt of grant or financial assistance </li></ul><ul><li>Includes a definition of recycling </li></ul>
  7. 7. Role of Enterprise Ireland - Procedures <ul><li>Specific, Limited & Clearly Defined </li></ul><ul><li>Procedure differs for BES and SCS </li></ul><ul><li>Procedure differs depending on Sector e.g Manufacturing, Internationally traded Services, R&D, Recycling </li></ul>
  8. 8. Industrial Development Act 1986 (No. 9 of 1986).SCHEDULE Software development; Data processing and electronic commerce; Technical and consulting services; Commercial laboratory services; Administrative/service centres, co-ordination and headquarters services Research and development services; Media, multimedia and recording services; Entertainment and leisure services; Training services; Publishing services; International Financial services; Healthcare services; Construction related services; Environmental services; Supply Chain Management and Logistics Management services; Commercial international standards bodies; Technology test centres; Prototype laboratory services; Intellectual property services; Group Procurement; Shipping services.
  9. 9. BES Qualifying Requirements and EI Role
  10. 10. SCS Qualifying Requirements and EI Role
  11. 11. Changes - Eligibility for BES <ul><ul><li>Dublin and Mideast. </li></ul></ul><ul><ul><li>Seed, start up stages for small and medium </li></ul></ul><ul><ul><li>Expansion stage for small only </li></ul></ul><ul><ul><li>Cork city and county </li></ul></ul><ul><ul><li>Up to 31/12/08 </li></ul></ul><ul><ul><li>Seed, start up and expansion stages for small and medium </li></ul></ul><ul><ul><li>From 01/01/09 </li></ul></ul><ul><ul><li>Seed, start up stages for small and medium </li></ul></ul><ul><ul><li>Expansion stage for small only </li></ul></ul><ul><ul><li>All other Counties </li></ul></ul><ul><ul><li>Seed, start up and expansion stages for small and medium </li></ul></ul>
  12. 12. <ul><li>Implication of BES/SCS if Companies Apply for Grants and other supports from Enterprise Ireland and other Development Agencies </li></ul>
  13. 13. Changes – Reduction of Grants & Payments <ul><li>EI must reduce the % level of some supports or maximum eligible amounts offered to companies </li></ul><ul><li>By </li></ul><ul><ul><li>50% in Dublin, Kildare,Wicklow & Meath (Cork from 2009) </li></ul></ul><ul><ul><li>20% in all other areas </li></ul></ul><ul><li>Total Reduction to equal total BES/SCS Investment received </li></ul><ul><li>Reduced Grant and supports limits will apply for 3 year period starting with 1 st investment since 1 st Jan 07 </li></ul><ul><li>Companies required to make declaration of BES/SCS received </li></ul>
  14. 14. When is the 3 year time period triggered? <ul><li>BES / SCS receipt date </li></ul><ul><li>How will the process work within EI? </li></ul><ul><ul><li>EI monitors – date of receipt and how much, </li></ul></ul><ul><ul><li>Reduction in subsequent approvals after the date of BES receipt, </li></ul></ul>
  15. 15. What impact will the timing of the EI approval have on the reduction of grants and equity supports <ul><ul><li>EI approval before BES is approved to the Company? </li></ul></ul><ul><ul><li>None </li></ul></ul><ul><ul><li>EI approval after BES is received by the Company? </li></ul></ul><ul><ul><li>Reduction </li></ul></ul><ul><ul><li>If Company has a risk capital investment since the 1 st of January 2007 that could convert to BES, Enterprise Ireland approval must also be reduced. </li></ul></ul>
  16. 16. Grants/Supports Subject to Reduction <ul><ul><li>Consultancy, </li></ul></ul><ul><ul><li>Trade Fairs, </li></ul></ul><ul><ul><li>Capital Grants/equity, </li></ul></ul><ul><ul><li>Training grants/equity </li></ul></ul><ul><ul><li>Employment Grants/equity (including key skills in BMW only). </li></ul></ul>
  17. 17. Grants/Supports Not Subject to Reduction <ul><ul><li>Research Technology and Innovation (RTI), </li></ul></ul><ul><ul><li>R&D Grants/equity, </li></ul></ul><ul><ul><li>Feasibility studies, </li></ul></ul><ul><ul><li>Proposed new Innovation aid, (awaiting EU approval) </li></ul></ul><ul><ul><li>Western Investment Fund, </li></ul></ul><ul><ul><li>De minimis aid, e.g. </li></ul></ul><ul><ul><ul><li>Market Research, </li></ul></ul></ul><ul><ul><ul><li>Mentor, </li></ul></ul></ul><ul><ul><ul><li>Employment grant (Key skills) in non BMW, </li></ul></ul></ul><ul><ul><ul><li>County/City Enterprise Boards, </li></ul></ul></ul><ul><ul><ul><li>Bord Bia, </li></ul></ul></ul><ul><ul><ul><li>FAS. </li></ul></ul></ul><ul><ul><ul><li>EPA </li></ul></ul></ul>
  18. 18. Talk to Us…… <ul><li>If you or a clients are starting a business that has export potential </li></ul><ul><li>If you are looking to Invest in new start ups </li></ul><ul><li>If you have questions around EI’s role in certifying you or a client for BES/SCS </li></ul><ul><li>Gerard O’Brien </li></ul><ul><li>Tel: 01 206 6433 </li></ul><ul><li>[email_address] </li></ul>

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