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Thursday, 25th April 2024 |
| Venture capital market remains active |
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Gavin Burke, Trinity Venture Capital
Trinity’s current dealflow remains strong. Although we have seen a slight fall off from last year, the relative quality of propositions is higher than last year. Coupled to this the fact that valuations for early stage technology companies have come back to more realistic levels, this is a good time for us to be investing. In terms of the overall market environment, obviously all technology companies are facing more difficult times - all of our companies sell into the corporate market place - with capital expenditure budgets being slashed - this effectively makes closing sales a difficult process. Most corporate buyers are focused on applications that show strong, tangible return on investment in the short term and those products that leverage what they have already invested in. The lead-time for selling new, complex solutions has increased significantly. However although the market dynamics have changed, it is important to recognize that the sources of technological innovation within the Irish market place continue to deliver.
In terms of evaluating business propositions - this has not changed - there are a number of key areas to focus on, including: the management team - this is probably the most important aspect of any early stage technology investment and market focus - important to understand the market place the company is proposing to sell into, for the corporate purchaser to purchase the companies offering - is this a ‘must have’ offering or a ‘nice to have’ product offering - how close is the company to that market place? - how well do they know and understand potential customers? Has the company sold product or services in this market place previously? Technology acceptance in market place is also important as is realistic financial projections and funding requirement. Finally, in relation to Ireland the following areas are currently generating interest - wireless applications and enabling infrastructure, eCRM, middleware and semiconductor design.
Fund: Trinity Venture Capital is focused on investing in early and growth stage technology companies, based in Ireland - we are looking primarily for software companies with their own intellectual property, selling into the corporate market place. Trinity’s operating style is to work actively with each our investee companies (we maintain a low ratio of investee companies to Trinity investment professionals to allow us to do so). In terms of funds under management, we announced earlier this year the first closing of our second fund, Trinity Venture Fund II, at E100m. Since that date we have been engaging with and signing up various international institutions and anticipate holding a final closing of this fund by Q1’02. To date Trinity Venture Fund II has invested in five companies. |
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| Article appeared in the November 2001 issue.
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