IDEAGen - Waterford
October 15th., 2009
Pat Byrne, Department Manager, HPSU.
Tel : (01) 727-2830 or (087) 221-4524
Role of Enterprise Ireland
What is HPSU ?
Key Trends in Software
E.I. Client Base is Segmented by
Stage of Development
Established SMEs MNC’s
Entrepreneurs Manufacturing and Irish-based
starting companies international-traded food and natural
with the ability to resource companies
compete in that are overseas
world markets employing
ten or more owned or
with the ability to
grow to scale and
Total E.I. Client base approx. 3,500 companies – 145,758 employees
Total Exports in 2008 €14.3BN (2007 : €13.9BN)
What is a “HPSU” ?
The company must be :
1. Recently established (between 0-4 years from date of first
2. Innovative (operating in a growth sector).
3. Capable of generating at least :
10 full time jobs (in Ireland) - by end of year 3
Annual revenues of €1.25M - by end of year 3
4. Export focused.
E.I. HPSU Activity
~ 1,200 start-up enquiries received p.a.
Of those ~ 400 can be classified as eligible as E.I.
E.I. approves first round funding packages for ~70
Sourcing people with new ideas
1999 – 2007
Indigenous - 148
20% MNC - 126
3rd Level - 38
15% Serial Ent - 64
10% Other - 21
HPSU review 1989 - 2006:
Status of EI client companies
50 (127) 11%
Started Still Trading Closed Taken over
1. Funding the Concept (Category One)
Mentor, Bus. Accelerator
Strategic Consultancy Max E.I. Funding is
€60K (over 2 years)
Feasibility/CORD Based on 50% grant
Recruiting Key Person
Innovation Vouchers (max. €5,000)
Overall Objective : Move the project toward a full Business Plan
2. Funding the Business Plan –
Evaluation of the Business Plan (which includes Cash Flows).
E.I. will invest by way of Equity (usually Cumulative Convertible
Redeemable Pref. Shares).
E.I. will invest based on identified cash need per the Business Plan.
Typical first investment is ~ €300,000 with additional sums based on
achieving agreed milestones.
E.I. will always look for co-investors (BES, VC’s, Promoters)
Software Industry – Key Drivers and Trends
Challenging economic environment consolidation,
The internet becoming the key distribution channel to deliver new
software and services (Web 2.0, Cloud Computing, SOA)
Users moving Software from Capital to Current Spend
i.e. “Delivery on demand” (SaaS)
Emerging Markets – BRIC countries
www.enterprise-ireland.com Enterprise Ireland - Confidential. Not for distribution
Cloud Computing – the Opportunity
CAGR 2009 -2013
Cloud based Business
= 83% revenues
SaaS – the Opportunity
2008 2009 2013 CAGR 2008 - 2013
SaaS WW Revenues US$6.6B US$9.6B (+21%) US$16B +20%
Enterprise Application Markets
Source: Gartner 7/5/09
• SaaS adoption by 45% US Companies in 2009 (from 23% in 2008)
• 76% US organisations minimum 1 SaaS application by end 2009
Start Up - Lessons Learned
Some of the more
common mistakes we
Some common start up mistakes …
Value proposition is not clearly defined. Technically brilliant product but
does it deliver VALUE to the customer?
Inability to identify and qualify the customer.
“Our product has no competitors” !
Unbelievable numbers (revenue projections and costs).
Unrealistic expectations on raising cash (time needed and valuations). It will
take 3-6 months. Plan conservatively.
Inability to manage cash – high burn rate.
Some common start up mistakes (cont’d)
Inability to identify clear – and achievable – milestones.
‘Unbalanced’ Management team – dominant CEO with little commercial
Recruiting a good CEO costs money - and equity.
Weak (non commercial) Board. Securing a hard-nosed, no nonsense,
commercial Chairman is invaluable.
Inability to plan for contingencies (they will happen !!).
No exit strategy (an absolute must for VC funding).
Thank You !
Telecom, Internet, Media & eLearning Software & Services
Tel : (01) 727-2830 or (087) 221-4524