Limerick woman has helped build a sustainable and profitable fund aimed at the west
In the late 1990s, Gillian Buckley spotted an advert for a job to set up an investment fund in the west of Ireland. It was a completely new concept – a pot of money from government was to be invested, on a commercial basis, in businesses in a specific geographical area, rather than a specific sector.
Buckley, whose experience at that stage included working in construction and manufacturing, knew it would be a challenge – not least of all because of the lack of investment in the west at that time.
“We were investing in a region that had very little understanding of risk capital, of venture capital,” says Buckley, the western Development Commission’s investment manager, who adds that seed and venture capital were nascent terms at the time.
“I think when I started in the job, there had been one venture capital investment in the region. So we were bringing a completely new idea.”
We’ve got the spark that's unique to the west of Ireland
For many businesses, their understanding was that state agencies only give grants.
“We were changing a whole mindset: that we want to share the risk, but we want a share of the return.”
And so the fund, operated by the western Development Commission, started in 2001 with IR£25m (€31m) from the Department of Agricultural and Rural Affairs. A new report on the fund by consultants Indecon says it is now worth €73m, and has generated a return of almost two-and-a-half times its original value.
It has backed businesses in areas such high-tech innovation, tourism, food, natural resources, renewable energy, and agriculture.
Although its remit is to invest in businesses from Clare to Donegal, rather than any particular sector, the fund has played a central role in developing some key industries.
“I feel we’ve grown up with the med-tech sector in the west of Ireland. The indigenous startup med-tech sector was really coming into its own in the very late Nineties/early Noughties. And we would have invested in a substantial number of those companies from the early days.
"We’ve a portfolio of over 40 med-tech life-science companies,” says Buckley. The fund’s scope also includes biotech.
“The west of Ireland would be seen as a global centre of excellence for the med-tech life-science sector. And also for the creative industry sector.
"For a region as small as the west of Ireland – where we’ve only a population of 800,000 – to be considered a global centre of excellence in anything is quite exceptional,” she adds.
“Creative industries are about TV, film, animation, and certain types of software development. But also you have the creatives – the arts, the music, the crafts, and then the cutting-edge immersive technologies.
“We’ve got that uniqueness of the west of Ireland – our storytelling ability, our heritage, our culture, and our language.”
Buckley grew up in Co Limerick. The family lived with her grandmother, who was a publican/shopkeeper, while her parents were farmers.
In the early 1990s, she was recruited onto the graduate programme of engineering company Kentz from the University of Limerick and was assigned to the construction division. Kentz had just acquired this division out of receivership. A few years later, Kentz itself went into receivership, shortly after Buckley had left to take up a management role at a startup.
It was an early lesson in the challenges in scaling up without being well funded, and the critical importance of cashflow and margins.
“Kentz had a global footprint, and it was a fantastic experience – in many ways of kind of what not to do.”
The receivership was “really a very sobering experience… because of the impact on people’s careers and livelihoods.”
One of her mantras which she learnt from her time there is “below the line sanity, above the line vanity.”
“You really have to have a profitable and sustainable business model,” she says.
Back then we called it teleworking, but we’ve been doing remote working since 1997
After working with a startup, Buckley took her first step into the public sector with the Meath Enterprise Board, which would later become a Local Enterprise Office.
“I was able to bring my experience to dozens of companies and to loads of startups,” she says.
She was scouting for jobs in the west of Ireland when the advert for the role with the western Development Commission (WDC) jumped out at her.
While hybrid working has become a buzzword of the pandemic, the Commission, which was founded in 1997, has always been open to employees working from home.
“Work/life balance was a pretty new concept at the time,” she says of the early days of the WDC. “We called it teleworking, but we’ve been a remote working organisation since 1997.”
The WDC investment fund takes equity in high-growth companies, while it lends to more established businesses. It tends to accept more risk than private lenders might.
“We just had a conversation this morning with people who need very specialist pieces of equipment that maybe the bank or leasing companies aren’t prepared to do. But it’s something we’ll do. We’ll take that extra little bit of risk.”
A key objective is to encourage private money to also jump in.
Over the 20-plus years in operation, the fund has seen a huge range of challenges, including the financial crash.
“In 2008, markets disappeared very quickly for a lot of companies. And follow-on investment disappeared very quickly too,” says Buckley, who is a former chair of the Irish Venture Capital Association (IVCA).
“The priority from our perspective was to maintain and support our existing portfolio,” she says. “We found there was very few new opportunities for several years. But our companies were resilient.
"That comes back to being a patient investor. We were able to ride out that difficult period with them – and it was a difficult period.”
A key objective is to encourage private money to also jump in.
The past two years have also been unpredictable, for different reasons.
“The global pandemic has been a very different type of experience, a very different type of crisis. A lot of the fund’s companies are in tech, or med-tech and life-science spaces. Opportunities came to the fore.”
There was a so-called wall of money in recent years, where investors sought to back innovative businesses. Did she find that reduced demand for WDC cash?
“Investing at the very, very early stage – the seed stage – is still a challenge. It’s always going to be a challenge. Quite a lot of my work, even the role I took with the IVCA, is to encourage investment, and ensure that the private sector guys are there to co-invest with us.”
While the international world of venture capital and tech investment might seem fast-changing, Buckley says WDC sticks to its own aims.
“The fundamentals don’t change that dramatically. And we need to ensure that we come back to our own remit – we need a financial return on investment.
"We’ve been self-financing since 2010. Remember, without returns, we don’t have money to reinvest in the next startups or the next community project. But we’re able to take a longer-term view than a fund that has a five- to seven-year exit horizon.
“Valuations are where things can tend to change. Here in Ireland, I think we’re a little bit more 'steady as she goes’ on valuations. But the US can, to some extent, drive an over-exuberance in valuations which is in nobody’s interest.”
The fund’s first-round investments are typically between €300,000 and €500,000. “And we would follow-on our investment. So over a lifetime of our investment, we expect the max would be €1m to €2m.
“We can do larger €1m-round investments straight off, but it depends on the stage of the company. We would always invest on the basis that we would be doing at least two more rounds of funding.”
Among its successful investments is Neuravi (founded by Eamon Brady and John O’Shaughnessy), which developed a third-generation stent retriever for clots in ischemic stroke.
“The company would credit the WDC with being the first to approve an investment in them. We invested at the time alongside angel investors and Enterprise Ireland. They went on to raise Irish VC money in a series-A round and European VC money at a series-B round. We followed our investment.”
Neuravi was sold to Johnson & Johnson in 2017.
“They were our first very large exit. We had a number of smaller exits up to then, but they were probably a game changer from our perspective. It gave us significant cash that we have been reinvesting since.”
Other investments are more local, such as An Mheitheal Rothar – a social enterprise in the circular economy area.
“They take in old bikes and refurbish them, so instead of going to landfill, they’re given a second life.”
One of the fund’s biggest challenges now is getting good investment opportunities.
Entrepreneurs can relocate to the region to take advantage of the the fund.
“We’ve had a number of very successful examples of that. One of our exits earlier this year was actually a US entrepreneur who came over.
“He came to the west of Ireland because he’d seen that the med-tech sector was very strong here, and we seed invested in him.
"We are an opportunity for entrepreneurs to access a significant pot of money at a very early stage. But they have to be here within the region and be genuinely creating employment opportunities within the region.
"We’re the western Development Commission, and we’re proud of that.”
Name: Gillian Buckley
Position: Investment manager at western Investment Fund, operated by the western Development Commission. Former chairperson of the Irish Venture Capital Association
Lives: Lackagh, Co Galway
Education: Mount Trenchard Secondary School, and Business Studies at University of Limerick
Family: Three sons
Pastimes: Avid hill walker
Favourite book: “I love historical novels, fantasy, crime.”
Favourite boxset: “Ozark is something that I really enjoyed.”
What advice do you have for companies planning to raise seed funding?
“It’s always challenging to raise that early-stage money. From our perspective, a company needs to have a very robust business plan – but they have to build in contingency into the business plan for what inevitably are going to be the speed bumps. In business, the only constant is change – and you have to be resilient to deal with that change.”
How do you feel we can encourage more female entrepreneurs?
“If we can encourage more girls to take Stem subjects, especially at secondary and third level, we will see more female tech entrepreneurs.”