Irish government agency paving path to success for start-ups Tech Insights

Irish government agency paving path to success for start-ups

In the global quest for talent, there was a time when the name Enterprise Ireland may have flown somewhat under the international radar. Today, Ireland’s national export agency invests in a staggering 200 or so start-ups every year.

As one of the most prolific seed investors in the world, Enterprise Ireland places an especially high value on what it defines as High Potential Start-Ups (HPSUs). These fall under the remit of Divisional Manager for HPSUs, Joe Healy, who explains how the agency operates – and what they look for.

What is the the role of Enterprise Ireland?

Our role is to develop the companies of tomorrow – those that will drive the Irish economy. We try and help those companies on their journey.

Enterprise Ireland has a 20-year track record of supporting companies with a strong international ambition. We have worked with hundreds of founders, taking a hands-on role to give these fledgling companies the benefit of our vast experience and knowledge.

Where does Enterprise Ireland sit in a global start-up context?

In terms of deal flow and volume of investment, we’re ranked third in Europe right now. We have a portfolio of more than 1500 companies across all sectors and of all sizes, including our HPSUs.

We make equity investments in approximately 200 early-stage companies per year. Last year, we invested €31 million in HPSUs, in addition to our wider investment strategy. We try to give companies that have potential the opportunity to succeed by giving the right level of support in terms of both funding and mentorship.

What do you look for in an early-stage start-up?

At a minimum, we look for a viable product plus evidence that there’s a market for that product. We also look for a team. That’s crucial. We ask: “Does this [founder] have what it takes to get people in who can help?”

Once those milestones have been reached, we set off on an 18-month project, collaborating and supporting the business where help is needed. It usually takes at least 18 months to raise the first round of proper investment.

How do you identify HPSUs?

We’re very active at trade and industry events. We also have a strong regional network to help ensure a continuous flow of entrepreneurs and founders. Whatever stage they’re at, we have people and resources in place to help them. These are not linear journeys and of course no two companies are the same, but it all starts with a conversation. Whatever the need, we have people to talk to and signposts that give clarity and direction.

For example, if you’re still at the idea stage we will encourage you towards our New Frontiers program. If you have a clear concept, you’ll probably start talking to your Local Enterprise Office. If you have a product that’s been validated, you’ll be working with Enterprise Ireland. And if you’ve fleshed out the market opportunity and devised a pathway to sales, then we’ll probably look to invest [and scale].

Do you gravitate towards some sectors more than others?

Quality projects and committed founders are always welcome. If you talk about sectors, right now probably two-thirds of our HPSU investments are in the technology or software field. Those companies, when they succeed, are easier to scale. That’s the fact of the matter. We also have a small but strong cohort of medical device companies. But again, there are no limits on good ideas.

What are the rewards on offer – for the start-ups and for Enterprise Ireland?

Our reward, as a Government agency, is that we’re building the next generation of Irish industry.

For the entrepreneurs, the reward is obvious – they want to work for themselves and we can help make that happen. But they must have the drive to pursue their vision. It can be a tough journey. It’s a 24/7 commitment so they need to be passionate about what they’re doing.

What are the challenges?

Our main challenge is to continuously identify viable projects and businesses. That puts us in the risk business. We accept that. We do everything in our power to help companies succeed, but in the end it’s down to the market. Ultimately it’s whether they can convince customers to buy.

For founders, the big challenge is funding. No surprise there. It can be extremely hard to find risk capital. One of the big tests is whether or not other investors believe in projects as much as we do.

Who are some of the role models HPSUs can look up to?

You look at Ergo, led by John Purdy, and Taxback by Terry Clune, both examples of Irish entrepreneurs who not only started innovative companies but also led them to commercial success. Others scaling well include Nearform led by Cian O’Maidín, Boxever led by David O’Flanagan and CurrencyFair led by Paul Byrne. We also have high hopes for rising stars such as Glofox led by Conor O’Loughlin and SalesOptimize led by Liz Fulham.

What makes Ireland such a fertile breeding ground for start-ups?

Ireland is a dynamic country with a very strong ecosystem for innovation. We have a culture of entrepreneurship that benefits from a fast-growing economy and a young, highly-employable population.

All the ingredients are there for start-ups. But it’s not for everyone. The things you have to do might not be sophisticated, but they can be hard. What could be harder than building things you want people to pay money for? Anyone who chooses that path deserves the very best support they can get. That’s what Enterprise Ireland tries to do.

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