Comedy club boss to put smile on faces of firms seeking funds
HE was the man who launched Dublin's Laughter Lounge comedy club, but Peter O'Mahony is finding nothing funny about Irish banks' refusal to lend money.
So the entrepreneur is about to introduce Crowdfunding to Ireland following its success in the US and Britain.
"Basically, it's where ordinary people with a bit of spare cash lend small amounts to a business they know or like," says Mr O'Mahony. "It allows that business to expand and gives people the satisfaction of having an interest as well as getting a good return on their investment."
Crowdfunding allows people to take small amounts from a range of investors through Mr O'Mahony's new company, Linked Finance. Basically, it holds online auctions that allow people to register their interest, pledge the amount of money they want to lend and the rate of interest they expect in return.
"There's €96bn in savings in Ireland at the moment, but most people are afraid to do anything with their money," says Mr O'Mahony.
"With Crowdfunding you can pledge €100 or €1,000 at, say, an interest rate of six per cent, and if your bid is successful then that's the rate you get."
The businessman decided to run with the idea after hearing Martin McAleese – the husband of the former president – make his "Your country, your call" speech in which he pleaded for budding entrepreneurs to come up with ideas to help the nation.
Among those who have successfully raised money through the Crowdfunding concept are Olivier Vander Elst and his wife, Lisa Redden, who five years ago started a company called GreenAer that sells electric cars and bicycles just off Dublin's Pearse Street.
Their business was going so well that they needed €15,000 for expansion, but had already reached the loan limit with their bank.
"I'd heard about the concept of Crowdfunding from a friend and thought I'd try it out and see what happened," said Mr Vander Elst, who is from Belgium.
Within days of his application appearing on Linked Finance, he saw that his customers, and other people who knew him and his wife, were pledging to lend money not only because they felt some attachment to the business but because they believed it could give them a good financial return.
Mr O'Mahony enlisted Simon Deane-Johns, one of the founders of Zopa.com, the originator of online peer-to-peer lending in the UK as an adviser to his business.
Senator Feargal Quinn, Dragon Bobby Kerr and Kingsley Aikins of the Irish Fund, who is chairman of Linked Finance, are also working with him.
The enterprising GreenAer bosses have no doubts as to why Crowdfunding has proved so popular with borrowers and lenders. "It allows customers to feel they are part of the business, and that's something that's hard to put a price on," they said.
In the end they got their €15,000 and had to refuse more than that again as their funding was oversubscribed.