Early stage investors are people and companies who provide start-up businesses in Ireland funding for their projects, typically when these projects are just beginning and are still in the market research or development stages.
Early stage Investors typically provide something called ‘seed capital’ which provides new Irish businesses with enough capital to get off the ground and to the point that they are either self-sufficient and profitable, or are in the position where they have proven their business concept and are at the stage where they require additional funding to move the project or business on further.
Typically entrepreneurs will require an early stage investor to provide seed capital for their new business because they need to either carry out market research to see if the business project is viable, require money for proof of concept to ensure that the product will actually work as believed, or entrepreneurs will require investment for product design which is typically an expensive process.
Therefore, early stage investors are speculative investors who provide funding to businesses that are still a long way off from starting.
Not all businesses require outside early stage investment. Often, a business owner will fund a start-up business themselves out of their own pocket. Or they will borrow money from friends and family to help them launch their business and get it off the ground.
Often an entrepreneur will imagine that they can borrow the money from their bank, but often this is not the case. These days Irish banks are reluctant to loan a brand new business any money, let alone a business that is still in the proof of concept stage. Typically banks in Ireland will only provide a loan to businesses that are already operating, have a good track record and are profitable.
When a business in Ireland requires an early stage investor to help get a project off the ground, typically that investor will require a large stake in the company or will require a large return on their initial investment. Whilst this may seem unfair it is important to understand that early investment can be quite a risky investment as many businesses do not get further than the proof of concept stage, meaning investors will lose all their money. Therefore, it is understandable that investors need to both see a strong business plan for the new business and also get a good return on their investment.
Irish entrepreneurs who have a start-up or a proof of concept idea that they need outside investment in to help launch can sign up to the Irish Investment Network to find a business partner looking to invest in an Irish business. One of the benefits of the Irish Investment Network is that our reach is not limited to Ireland, as we are a global organization. This means entrepreneurs looking for investment for their business may end up partnering with an investor from overseas who is looking to invest in an Irish company.
AIN helps investors and entrepreneurs build lasting and profitable relationships to build better businesses and brighter futures.