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Saturday, 13th April 2024
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Venture capitalists against Companies Bill Back  
The Chairman of the Irish Venture Capital Association (IVCA), Michael Murphy, has cautioned against a number of proposed legal, accounting and regulatory changes that could hinder the growth of the venture capital industry, despite signs of optimism in the market and the IVCA having €325 million available for investment.

Speaking at the association’s annual dinner in November, Mr Murphy said Ireland’s venture capital infrastructure had been transformed since the mid 1990s and in the last five years €990 million was raised and €665 million invested in over 600 companies. With 66 per cent of investment in 2002 being allocated to technology companies, he said venture capital had been a major catalyst for the growth of an indigenous technology sector.

However he warned that if the Companies Bill 2003 is enacted the future growth of Ireland’s enterprise culture and the venture capital industry is in danger of stagnating.

‘At the investee company level the onerous responsibilities already assumed by non-executive directors may be increased if the Companies Bill 2003 is enacted. Non executive directors add value and expertise to investee companies and there is a danger that individuals will be unwilling to serve on boards of early stage companies,’ he said.

He went on to say that other proposed measures could adversely affect the industry’s future, ‘at the venture capital level the proposed Basel II rules on capital adequacy of banks could impact on the ability of banks to invest in venture capitalists. The proposed International Accounting Standard Number 27 could ultimately require venture capitalists to consolidate the results of investees into their accounts which would provide meaningless information to investors and place unnecessary administrative burdens on fund managers.’

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