Lack of 'follow-on' capital is detrimental to tech start-ups
FUNDING for start-up technology companies in Ireland is more accessible than it has ever been, but it is more and more difficult to grow young businesses, according to a leading venture capitalist.
Former Trinity Venture Capital partner Brian Caulfield said the lack of 'second stage' funding posed a huge threat to early-stage tech companies in Ireland, even if their ideas were sound.
"The availability of seed capital in Ireland is fantastic and we're seeing funding for a lot of companies now. My concern is that seed funds are not holding back a lot of capital for follow-on.
"If you want to raise €1m in Ireland, I'm not saying it's easy, but it's less difficult than it has been for a long, long time."
While Mr Caulfield, who is now a partner with DFJ Esprit, conceded that the financial crisis here was part of the problem, he said it was mainly to do with the global macro-economic environment. A lot of seed funding comes from pension funds, and most of those funds have been hit badly by the downturn.