| Daily adventures in venture capital |
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| Conor O’Connor, chairman of the Irish Venture Capital Association and chief executive of Enterprise Equity (Irl.) Ltd spends his day checking out new investment projects and catching up with old ones. |
7.45 a.m. My mobile phone which doubles as an alarm clock goes off. This morning is a late start as I decided the previous evening to overnight in Dublin, following a late meeting of the Irish Venture Capital Association (IVCA). The IVCA of which I am chairman represents the interests of the Irish Venture Capital community both north and south. Our members have close on •1 billion under management and have invested •600 million in 500 companies over the last five years. I see my role as being twofold, one to listen to what the industry wants and two to act on it decisively.
8.15 a.m. Breakfast consists of a bowl of cereal, toast and some mint tea, which I acquired a taste for many years ago. My plan for this morning is to do a few hours work then when the traffic has quietened down to head back to our main office in Dundalk, where I live.
8.30 a.m. The IVCA role is voluntary. My day to day job is as chief executive of Enterprise Equity (Irl.) Limited, part of the Enterprise Equity Venture Capital Group. We have offices in Dundalk, Galway and Belfast. We invest venture capital on a commercial basis throughout the border, midlands and western area in the south of Ireland and throughout the whole of Northern Ireland. Since inception we have invested •48 million in over 60 companies. First item on the agenda is a review of the subscription agreement, articles of association and service contracts for a seed capital investment. The amount involved is significantly lower than our normal first tranche investment, which is c.•600K - •900K but can go higher. Following my review I ring Rory Hynes of our Galway office to clarify a few points and to get Rory’s view on outstanding items.
9.45 a.m. Speak with Willie McCarter, chairman of Enterprise Equity and also chairman of the International Fund for Ireland which originally set up Enterprise Equity. Willie is checking as to how progress is going on a new •7 million fund we are raising.
10.00 a.m. I receive a call from the chief executive of one of our investees. They have been granted additional bank facilities to meet an unexpected commitment. Good news about the bank, but I don’t like the ‘unexpected’ element here.
10.15 a.m. I start to review the ‘Heads of Agreement’ for a new investment. The total fund raising is •3 million and we are committing just short of •1 million. However, as the largest ‘new investor’ in the company we have a crucial role. We have battled hard to get this investment in the shape we would like it. The deal is complex and with four institutional investors the ‘Heads’ run to 6/7 pages of detail. I often think that successful venture capital is a mix between tough negotiation and the ability to know when to walk from a deal. The worst thing that can happen is to get psychologically wedded to a deal and to refuse to let it go.
11.00 a.m. I set out from Dublin to travel to our office in Dundalk. I make a number of calls en-route. First is to a fellow institutional investor in one of our client companies. Enterprise Ireland is proposing to put in additional funding to our client to assist further expansion. My review of the legals has thrown up a point which I think has been missed. I bounce this point of our co-investor and we both agree that this must be clarified. Enterprise Ireland has invested in many of our portfolio companies and we are pleased that they have come up with a substantial package for this investee. In between calls I listen to tapes of Joe Satriani and Buddy Guy (what you would call easy listening!).
11.45 a.m. Stop and pick-up two sandwiches and two diet cokes from a garage en-route (lunch!). Based on my experience as a fuel injection engineer as a student I suspect that these places make more money on sandwiches and diet coke than they do on fuel!
12.30 p.m. Meet with Aidan Devenney of our Dundalk office. We quickly review where we are at on a number of projects. As of now we have 10 - 15 projects on our work-in-progress list. Fortunately we invested next to nothing at the top of the market. As a result we are busier now than we ever have been.
1.00 p.m. I have my sandwiches and diet coke while reviewing the papers for a board meeting of a client company. I also catch up on some emails. It is amazing how some people that you would chase for days on the phone will answer an email within minutes!
2.00 p.m. Meet a client. This particular company is doing well despite the difficult terrain out there. We review recent activity and focus on how we can produce a better margin in 2003. If this company gets a fair wind in its sails then it will do well. The difficulty in 2003 looks to be the general economic malaise and we discuss ways of getting customers ‘across the line’.
3.00 p.m. I review the subscription agreement and management contract for our proposed new fund. Our solicitors have asked me to ‘think about’ a particular point of difficulty which has arisen, regarding management fees for the fund.
4.00 p.m. Talk with Enterprise Ireland (EI) with whom we have a •9 million joint venture. We have a close working relationship with them and as well as being investors in the JV they are also directly invested in many of our client companies.
4.10 p.m. Talk with our solicitors regarding the new fund and the point of difficulty they asked me to think about. I have finally rationalised as to what each of the respective parties agreed to on the point at issue and I agree to email my understanding of it to them.
4.30 p.m. I start to reply to a few emails and also to return some phone calls. Unfortunately I am not going to get through all the calls today.
4.40 p.m. Phone call from a non-executive director on the board of one of our client companies. A number of problems have arisen at this company and it is important that we are all singing from the same hymn sheet. We agree a series of measures which we will ask management to undertake.
5.00 p.m. Print of final version of subscription agreement, articles and service contracts that I reviewed this morning.
5.30 p.m. Call Rory Hynes. We have a second significant transaction in process at the moment, again at just under •1 million. Rory and myself have been working on this. Again a multiplicity of investors complicates the picture. A number of issues are proving very difficult to resolve. When these situations arise I ask myself ‘what is the bottom-line’ from our perspective. If we can deal with in those parameters, great, if not we are out of the equation.
6.30 p.m. Respond to further emails and catch-up on office administration.
7.30 p.m. Leave for home.
7.40 p.m. Dorothy is helping Stephanie (5) and Adrian (3) with a dinosaur jigsaw.
8.00 p.m. Talk with Willie McCarter to update him on progress on the issues we discussed this morning.
8.10 p.m. Get something to eat before I become another extinct species.
9.00 p.m. Read FT/Irish Times/Independent. This morning’s news this evening! Can we rewind this? |
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| Article appeared in the January 2003 issue.
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