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Irish companies seeking external funding to go up
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There has been a drop in the number of Irish companies actively seeking funding over the past few years, but Mazars expects to see more companies seeking external funding in 2012 and 2013.
A quick survey of companies attending a Mazars breakfast briefing, entitled 'Green Shoots - Growing Your Business' this week, found that 50pc will be seeking external funding.
Of these two thirds of companies, will be doing so for working capital reasons and the remainder want to fund acquisitions.
Speaking at the briefing, Enda Gunnell, partner, Mazars said there was “no doubt” that many entrepreneurs are finding it hard to secure the working capital they need to grow their business.
“The rules of the game have changed and traditional sources of such funds - from banks to venture capital firms and business angels - are all scrutinising business proposals more stringently,” he noted.
"What we are now seeing is a return to fundamentals. There is increased scrutiny on all aspects of the business, not just the financials. More and more, the quality of the management team and their willingness to put their own funds into the business is a determining factor for potential investors.”
Sectors favoured by investors
Gunnell highlighted a number of sectors that are currently in favour with investors, namely health, energy, technology and food.
“Also, companies that are not influenced by the current downturn, are export oriented or have a product or service that have a global application tend to be viewed as offering the optimal risk-reward balance for business investors at present,” he said.
He added that if the Government’s proposed ‘partial guarantee scheme’ is to achieve its intended effect, it would need to be short on red tape.
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