Seed and Venture Capital are becoming more frequent sources of investment in the Irish market, providing capital for new businesses and entrepreneurs that would not be able to obtain loans for instance. Over the past few years, more and more angel investments have been made in Ireland, and the global credit crunch of late 2008 has increased the demand for angel investors.
What exactly is Venture Capital funding? When Irish companies start up, they often need further financing to expand. This is where Venture Capital comes into the picture. This is a type of private investment that often comes from a group of investors. Venture capital works by typically buying a percentage of shares in the company, in return for the investment stake.
For brand new Irish businesses that are already trading successfully, it can still be quite difficult to secure bank loans from the traditional financial institutions. If that business wants to accelerate its growth or expand its trading outside of the Irish market, then further investment from angel investors and venture capitalists can help a business achieve this.
Investing in a brand new business is considered a high-risk investment, especially for businesses that are under a year old since it is common for new businesses to fail in the first year for a number of different reasons. Because of this associated risk venture capitalists usually play a role in the company's key decisions, by becoming a partial owner of the company.
In addition to a simple financial incentive for entrepreneurs to allow venture capitalists into their business, most investors come with additional benefits that can be useful for the business. For instance, investors typically operate in sectors that they have experience with, so they often have contacts and experience which adds extra value to their offer. This experience and list of contacts, along with a financial investment can help grow a new company a lot faster than it could without this additional help.
Tax incentives in Ireland have kept venture capital flowing into Ireland's market, and even though some investors exited their investment strategies in 2006, 2007 was a top year for both raising and investing business funds. Press coverage and recognition has continued into 2008, with government based companies such as Enterprise Ireland setting up offices in locations such as New York City to help Irish businesses expand into the US.
With local taxes favouring new businesses, the market is ripe for both investors and entrepreneurs looking to start or expand a business.
For venture capitalists and angel investors that are looking to find an entrepreneur or business idea to invest in, the Irish Investment Network is a portal that can help connect these high net-worth individuals and groups of investors with Irish-based entrepreneurs with a good business idea or a business that is operational and requires additional support. Simply search for business ideas that are of interest and find investments to fund.