Promotion: Venture capital is the key to unlock future wealth
Bob McGowan-Smyth, the new lead equity advisor at InterTradeIreland reflects on the All-Island Seedcorn Business Competition as a way to address the challenges of raising early stage venture capital.
‘HOW on earth can a business raise equity funds in these challenging times?’ The current economic environment is the most demanding in decades. Despite this, equity finance is still available but only for companies with sound business plans to be delivered by experienced and credible management teams.
Venture capital has significant benefits. Venture-backed companies generally grow at an accelerated pace and create more wealth and employment than other businesses.
Being venture backed adds considerable credibility to a business since persuading external investors to buy shares in a private company is extremely challenging. With venture capital in place, customers, suppliers, staff and even the banks are given confidence that the company must have a credible plan to attract investment from third parties.
The venture capital industry has changed in the past 15 years with many venture funds on the Island having moved up the ‘food chain’ to later stage deals. The private investor has been under liquidity pressures in the past two years due to the down turn.
Another important source of early stage investment, the business angel networks, are much less developed than elsewhere in Europe. These are all adding pressure to the equity gap, the stage or size of equity investment that investors are reluctant to support.
This means that companies need to ‘up their game’ significantly to attract investment by becoming ‘investor ready’.
InterTradeIreland through its EquityNetwork offers a range of support to help early stage companies on the island, North and South to improve their chances of becoming investor ready.
InterTradeIreland recently launched the All-Island Seedcorn Business Competition which can provide companies with the expertise and support they need to attract equity investment and offers a €280,000 prize fund.
Previous finalists have successfully raised over €125 million in equity but would readily testify that the competition is about much more than money.
Through the competition, companies get expert advice from other entrepreneurs, equity experts and business leaders as well as exposure to venture capitalists. The public exposure during the competition has led to increased business profile and credibility for entrants.
In Belfast on 26 May, the annual Venture Capital Conference is going ‘back to basics’ on how to raise early rounds of equity.
The Conference will showcase the current sources of equity capital available and Investors with access to over €275 million worth of available funds will be there on the day along with some companies that have successfully raised equity. It will also provide a unique opportunity to meet with investors during the networking sessions.
Venture capital is the key to unlock future wealth. Ireland needs entrepreneurs now more than ever. History shows that the best businesses around today were established in hard economic times.
Understanding what the funder wants and how to move the business rapidly forward and assemble the best possible team is essential but the support is out there to help you make it happen.
For more information on “how to raise equity” or our investor ready service visit intertradeireland.com/equitynetwork