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Calls for working group to assess funding landscape for startups

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The Irish Venture Capital Association has called on the Government to establish a working group to examine the conditions for companies trying to raise money.

In its pre-budget submission, the IVCA said that an institutional investment in innovative firms working group should be established in order to create a “stronger Irish equity culture”.

The organisation said such a group was necessary to assess the conditions, barriers and government policies that affect companies’ access to financing.

It said the coming years may be “challenging” for firms trying to raise money.

“Irish policy must be shaped to further attract additional institutional investment into Irish venture capital and private equity funds,” it said.

The IVCA has regularly called for reforms to government schemes like the Employment Investment Incentive, a tax relief for investors, to get more money flowing into start-ups.

According to the organisation, venture capital investment in Irish tech companies increased by 8pc in the first half of the year to €641m with the number of deals up by 16pc.

However it also tracked a drop-off in the number of deals between €1m and €5m, suggesting a drying up in early stage funding that could be detrimental to the future development of Irish start-ups.

The IVCA said more needs to be done to encourage capital into early-stage tech start-ups, which can be riskier compared to investments like property.

“There is an urgent imperative to encourage private capital away from passive assets like property and direct them to fund the future of Irish Industry and the productive assets that will restore and rebalance our economy,” it said.

Speaking at an event run by lobby group Scale Ireland earlier this month, finance minister Paschal Donohoe acknowledged the desires for changes to schemes like EII.

“I know there are supports that you would like to see changed or be augmented in the future,” he said.

“These again are the kind of things I will be reflecting on in the coming weeks.”

Any modifications in Budget 2022 to indigenous business supports come amid a backdrop of potential changes to Ireland’s corporation tax rate, which could have a profound effect on the Irish economy.


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