| Ireland a ‘hot spot’ for investment |
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| Finance asked some members of the Irish Venture Capital Association - IVCA - to comment on the Irish venture capital market in light of the softening economy and found that their mood is cautiously optimistic. |
The general consensus among the venture capital community in Ireland is that there is still plenty of money to invest. As highlighted in the recent Irish Venture Capital Association (IVCA) report the amount of investments made in Irish companies since 1997 has increased 429p.c.. Of the E208 million invested by venture capitalists last year, almost 75p.c. was invested in technology companies. Sixty five per cent of venture capital activity happens within the Leinster region especially Dublin while Munster takes second place with a much smaller ten per cent of money invested. The amount of money invested by IVCA members outside Ireland has doubled between 1999 (•17 million) and 2000 (•34.8 million). Despite the slowdown in the global economy there are good opportunities for companies seeking funding because investor expectations are now more realistic than twelve months ago when valuations were very high. Also with fewer start-ups looking for capital there is less competition. It is estimated that the amount of money invested in 2001 will be less than the bumper years of 2000 and 1999 but that there is still plenty of scope for funding for companies with a good knowledge of their customer base, strong management and unique product development and research approach. Venture capitalists will apply caution however on companies relying on speedy revenue growth in the next twelve months. Another positive trend according the venture capital sector is the continued belief in Ireland as a ‘hot spot’ for investment. This belief is underlined by the steady rise in investment from non-Irish sources, especially from Europe.
The supply side has money to invest so it is important for the demand side to ensure quality projects coming through the pipeline in a quality ‘investor-ready’ state. It is also vital that the Government continues to encourage an entrepreneurial and enterprising culture to maintain the growth in venture capital as a serious player in company financing.
Finance asked the venture capitalists to comment on the general marketplace, the level of competition in the industry, the quality of projects available, supply and sources of capital and any changes in project demands. We also asked for some indication of how much investment is available for the next 12 months, and which are the key sectors invested in. Below are some of the comments received from leading players in Ireland’s venture capital sector. |
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| Article appeared in the November 2001 issue.
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