€500m to be invested in new venture fund

bacon?

http://www.rte.ie/news/2008/1218/economy.html

so... is this a good thing for brand new, start up, aint got much money start ups?

Darragh29

Well it's grand, but it seems to me that the money is being targetted at foreign businesses or well established firms...

If you had a business idea or a new product and wanted to pitch for this capital, I doubt you'd meet with much success...

BenjAii

Seems this is only targeted at existing large businesses. On top of that according to ISME,

"Responding to the announcement, business group ISME said it was dismayed, calling the plan 'vague, bereft of ideas; deficient in specifics, measurements and timeframe.'"

niceirishfella

I think its directed @ R&D silicon valley kinda start up's and the like that VC's like to invest in due to the massive windfalls they can generate.
It'll take freeekin years to mature this proposal.......no use to blokes like us, unless you're in that game.

Darragh29

niceirishfella wrote: »

I think its directed @ R&D silicon valley kinda start up's and the like that VC's like to invest in due to the massive windfalls they can generate.
It'll take freeekin years to mature this proposal.......no use to blokes like us, unless you're in that game.

That 500 million could hovered up by the semiconductor industry in a matter of days.

There are so many people in this country that are willing and able to generate innovative ideas and are prepared to work hard to reasearch these ideas and bring them to the market, but the only problem is that they are living in a country where this type of forward thinking is not supported.

We need a new government organisation exclusively for entrepreneurship. If you want to get a job, you go to Fas, but if you want to start a business, you should be able to go to a new agency that first of all is managed and administrated by entrepreneurs…

What we need is some sort of set up along the lines of a government run credit union for business, where you join up and immediately have support for your business by being assigned to an entrepreneurial specialist, your new business can take up an office in an incubator unit and can start to trade immediately, with no 3-6 month delays for solicitors doing property legal background checks and to-ing and fro-ing.

The same organisation could provide easy access to credit for start up businesses, where If you can lodge 10K, you can borrow 40K against it and you can start up your business in an incubator unit where rent and facilties are available and affordable and where you have a mentor on hand to go to when you need help. Also, you would be based in a unit or development where you are surrounded by people who are also doing what you are doing and are in a forward thinking and positive entrepreneurial environment where everyone can help everyone else out as well.

Something like this could be implemented across the country in a matter of weeks if the political will was there and would be a HUGE help to people who want to start up their own business. How many empty IDA owned factory units, warehouses and office blocks are sitting idle around the country for months if not years???

I am so angry that we have a big hyped up press conference yesterday about 500 million Euro for enterprise. You could put 1 million Euro into an idea like the above for one business start-up init unit and have a return within 6 months…

There is no joined up or innovative thinking from this governement. That 500 million will be hoovered up by foreign organisations or multinationals already operating here…

Right now, as I'm tying this, I've three start-up projects going on with absolutely no support from the government or any other party. People think I'm f*cking out of my mind doing this in a recession, but I'm doing it and these three projects will be trading sucessfully by next March,

Imagine what people could do if there was support.

BenjAii

Darragh29 wrote: »

We need a new government organisation exclusively for entrepreneurship. If you want to get a job, you go to Fas, but if you want to start a business, you should be able to go to a new agency that first of all is managed and administrated by entrepreneurs…

Darragh, ou have spoken about this before and I agree with you. I will be doing the same thing in '09 so have a vested interest here.

Even starting small with this idea & seeing where it would go would be a start.

If there are any other people willing to put a bit of time into it, I would join. Ultimately it would pay dividends to anyone involved.

I would be happy to take care of putting together a website with a forum, obtaining a .ie address for it & obtaining hosting.

goudystout

Some facts:

1. 3 year tax holiday for start ups - what start up makes a profit in normal times let alone now - or is this really about bringing existing international companies into Ireland under new names - so nothing for SME's trying to keep going!

2. R&D fund - you have to spend money to get R&D money - What SME has spare money for R&D lying around. If they did the money would go to 3rd level R&D centers (which take years to do anything) keeping post grads in college - not much good for normal employment. Then of course the Gov gets the 21.5% VAT on the R&D bill which the SME has to cough up out of its flagging cashflow.

3. €500 million start up fund over 10 years - sure in the dotcom boom EI were wasting this much on 1 or 2 start ups at a time - most of which are long since gone! Put it into empoyment grants - we would all benefit then and the benefit will be 10 fold.

4. What is there for existing SME's employing people and trying to keep going - nothing..... just pressure from the Revenue Commissioners and Banks. We employ 5 persons - have shed 3 and more in jeopardy. Bank calls me in to tell me that my overdraft requires that I be in credit for 3o days in year and I must achieve that by March - meanwhile I am struggling to keep within the limit - so they give me a small extenion until mid Jan only - so that they can sit in front of Senate committe last week and say that they are extending their loan book helping SME's. We have turned loss making into profit in 4th quarter by shedding jobs and other measures but Bank Manager goes out of his way to highlight how our profit and reveue is down - are they living in our world at all???

5. Gov, Banks and especially EI think that it is all about money - the best benefit the country and SME's can have is people at a reasonable cost to push things ahead. What should Gov Do - subsidise employment to part value of dole - help keep persons in jobs, reduce their dole bill, maintain PRSI and tax revenue give confidence to the people of Ireland who can look forward with confidence that they will have a job.

It is not all about creating more Googles and Microsofts - it is about maintaining a confident SME sector - i.e those who already employ the most people in Ireland.

There is still the same amount of money in Ireland - it is just not being spent - give the people confidence with respect to employment and it will flow again.

Gov, EI, Politicians - stop talking money and start talking people - stop talking new and start looking after the ones that are already here........... As for ye bankers - a new day is dawning!

Darragh29

BenjAii wrote: »

Darragh, ou have spoken about this before and I agree with you. I will be doing the same thing in '09 so have a vested interest here.

Even starting small with this idea & seeing where it would go would be a start.

If there are any other people willing to put a bit of time into it, I would join. Ultimately it would pay dividends to anyone involved.

I would be happy to take care of putting together a website with a forum, obtaining a .ie address for it & obtaining hosting.

To be honest with ye Ben, I totally agree with you. Personally I think the government should be doing this but if we were to wait for them to get around to it, we'd all be f*ckin' dead and in no position to start a business.

Entrepreneurs being entrepreneurs, we should take ownership of this ourselves and f*ck them, we'll be dead long enough!

I had an idea about this before regarding an organisation exclusively for start up businesses but what I had in mind might not be what other people had in mind but I'd be very happy to work with anyone who is interested in getting something like this off the ground on a discussion basis anyway to see if we can share ideas and get something moving.

I fell behind on my own idea because I got hit will a wall of work after starting up a web development business in the last 3 months and things being the way they are at the moment, I couldn't put the work on the back burner so I didn't have the time recently to push forward the other project for business start ups. I had allocated some time over the Crimbo-New years for this with a view to having a website up and running for the New Year.

I had loads of enquiries on here before when I started a thread on this, there appeared to be a genuine appetite for this when I mentioned it before...

I personally feel that it's gotten to the ridiculous with this government, if we want this, we'll have to do it ourselves. There is no leadership there, so it's time I think to roll up the sleeves and get on with it...

Sonnenblumen

Darragh29 wrote: »

We need a new government organisation exclusively for entrepreneurship. If you want to get a job, you go to Fas, but if you want to start a business, you should be able to go to a new agency that first of all is managed and administrated by entrepreneurs…

I am so angry that we have a big hyped up press conference yesterday about 500 million Euro for enterprise. You could put 1 million Euro into an idea like the above for one business start-up init unit and have a return within 6 months…

Imagine what people could do if there was support.

The last thing we want is another Gov Agency - we're already overburdened with Quangos. There are plenty of enterprise support agencies, what we need is a more accessible and coherent structure, not fragmented on industry groups, eg food, IT/manufacturing, Fish etc etc Again further complicated by co size - start up, mature, high tech, low tech, etc etc. We've got CEB, EI, IDA, SHannon, Eudaras na Gael, Bord Bia, BIM etc etc. This cumbersome support structure is not client centred but hugely cost inefficient.

I think your claim on fast buck returns would need to assessed (normal checks and balances apply). I would support willy nilly investments. I mean you can pop € 1 mio on deposit and have a return after 6 months , which is probably on average higher than the likely average return from a business investment after 12-18 months. One would expect prudent assessment returns over the longer term, but there are more failures than no certainities. Thats the reality and the challenge is to pick winners. Gov checks should be broadly in line with prudent VC criteria, why not?

Finally a further challenge for the Gov within a 'smart economy' is the politics of supporting jobless growth!! But thats for another day.

BenjAii

Darragh29 wrote: »

I personally feel that it's gotten to the ridiculous with this government, if we want this, we'll have to do it ourselves. There is no leadership there, so it's time I think to roll up the sleeves and get on with it...

I think it's worth having a discussion about this.

Your idea has the focus on speaking to the government/campaigning
on behalf of start-ups.

I second that, but also want something that creates a network that is easy
to tap into for information & solutions to problems, for people who are in the position of starting their own business. Networks of various forms already exist in Ireland, the likes of !LINK & Hothouse having been mentioned here before. But one that had the ease of access as boards.ie would be an addition.

I'm sure other people would have other goals too.

In which case shall we start another thread now about this ??

A few questions to throw out to people for discussion about such a group would be

What do you see it doing ? What should it's goals be ?
What would I want to get out of it ? What would I be willing to
do for it ?

goudystout

BenjAii wrote: »

What do you see it doing ?

Not what EI and Enterprise boards do and recently FAS also - sell you training and tie up in plans and proposals for drawn out assessment for funding which you may never get.

Businesses new and old need people with particular skills parachuted into their business for short to medium periods. More and more unemeployed now - whoever is responsible for supporting SME's in Ireland must use the business skills on the dole to jump start businesses.

Again it is about people not money!

Sonnenblumen

As a matter of interest, anyone know of existing examples even in other countries of 'state spoon fed enterprise'?

I think you will find that the more successful and enterprising societies are in fact self starters.

Darragh29

Sonnenblumen wrote: »

As a matter of interest, anyone know of existing examples even in other countries of 'state spoon fed enterprise'?

I think you will find that the more successful and enterprising societies are in fact self starters.

That's grand when the banks are lending and capital is available, not the case here at the moment...

jerryob

I'm opening myself up for wholesale abuse, but I tentatively welcome the framework announced by the government as a positive step, and is long overdue. I qualify this as tentative, until I learn of the T's & C's.

If we are to be a knowledge economy, we need to leverage the skills that FDI has brought us. There are myriad of life sciences, pharma and biotech startups out there, doing just that. But they need capital.... I personally know 3 of the larger VC funds in Ireland - they act as risk-averse banks. The governments initiative is simply copying the very successful Israeli model, in the hopes of opening up more risk-taking VC capital by attractting foreign funds.

IMO, pouring funds blindly into R&D has been a mistake; having a target to double (or whatever) the number of Ph.D's is fundamentally flawed. I have spent the last year scouring through universities looking for commercialisation opptys. Of course the R&D is superb, but very little that I have come across is commercialisable. I've seen R&D grant applications in the €400-750k range that consider the market as an after-thought, and was glad when EI flatly refused the funding. Some of the more promising opptys fell through after a couple weeks (!!!) taking to the target market. No wonder less than 10% of startups come from Uni's.

What needs to be done is to support innovation - to paraphrase Moore "... the chasm between R&D and mass market". Israel has successfully done this; Korea equally so; Ireland needs to copy - I believe that's what the Government is finally doing. If there is no mechanism to fund innovation, what happens??? True, the smaller SME's will have to look on in dismay, but strenghtening the innovative, knowledge-based, R&D focused startups, (or whatever you want to call them) will rise the tide for all of us, and (eventually) decrease our dependence on FDI.

As for an earlier comment re: semiconductor industry hoovering up the €500m in a few days, I'm afraid that's not true. Apart from Analog (who won't be looking for a cut), the semi industry in Ireland is very small. Only a handful of semi startups are trading, namely Movidia, Redmere, Chipsensors, Firecomms, and a couple others. Only one has a lead VC that is Irish. Each has taken 9-12 mths to close their last round and has relied heavily on BES and EI to get them to prototype. EI is sitting on a nice 'paper' return already from them.

Sorry for being so long-winded....

Darragh29

jerryob wrote: »

The governments initiative is simply copying the very successful Israeli model...=

Congratulations, you've read David Mc Williams in the Sunday Business Post today!

Sonnenblumen

Darragh29 wrote: »

That's grand when the banks are lending and capital is available, not the case here at the moment...

I'm not sure where you're coming from? Are you bemoaning the fact that Gov and/or banks are tight on providing seed capital to every Tom Dick and Harry who believe they have an idea?

You seem critical/ignore the commercial VCs?

If I were you and had an idea, I'd focus on progressing the commercialisation aspects and find the much needed route to market and not waste time on
re-inventing a wheel for cheap hand-outs!

People nee dto grow up and realise the only free teat available is Mother's milk, after that well you generally pay for it!! Commercialisation begins on your own door step and if doesn't well you didn't have a commercial idea in the first place .

Darragh29

Sonnenblumen wrote: »

I'm not sure where you're coming from? Are you bemoaning the fact that Gov and/or banks are tight on providing seed capital to every Tom Dick and Harry who believe they have an idea?

You seem critical/ignore the commercial VCs?

Very few people who have an idea actually follow it through and attempt to market it...

Sonnenblumen wrote: »

If I were you and had an idea, I'd focus on progressing the commercialisation aspects and find the much needed route to market and not waste time on
re-inventing a wheel for cheap hand-outs!

People nee dto grow up and realise the only free teat available is Mother's milk, after that well you generally pay for it!! Commercialisation begins on your own door step and if doesn't well you didn't have a commercial idea in the first place .

I never suggested freebies, handouts or mothers milk. What I suggested was a mechanism whereby a business promotor could BORROW funds that I suggested could be partially secured by way of an investment deposit which I suggested would be 33%, not unlike the way in which a credit union issues loans.

I also suggested that IDLE state assets like IDA units & office space around the country, be used as new types of dedicated business start-up centres, with facilities like broadband available and facilities like back office support, etc, being available to entrepreneurs and also each centre having a mentor available to help members...

Can you come back and explain where hand outs, freebies or breastfeeding arise in relation to what I have suggested???

Also, you need to grow up and come to terms with the fact that entrepreneurs cannot get access to capital and at the same time we have a high flying bank chairman lending himself nearly 90 million Euro which would appear to be unsecured.

You try going into your bank and asking for 90 million Euro in unsecured lending.

jerryob

Darragh29 wrote: »

Congratulations, you've read David Mc Williams in the Sunday Business Post today!

Now, now Darragh, I didn't have to read the McWilliams article. I've spent much time at the coalface in both Israel and Korea (and the main FarEast hubs for that matter), doing business and closing contracts. Plenty time to see how it works first hand.

Making VC money more liquid will still not stop them attempting to rape you. IMO, it's the angel investment, the 3 f's if you will (friends, family and fools) that is the hardest to get. By it's nature, it is the riskiest as (in my industry), you don't have a prototype, and you're selling a concept, team and market research.

Oiling the VC fund wheels can only be a good thing, IFF the T/C's and funding due diligence are right. I think BES is a good mechanism to encourage angel investors. McWilliams does suggest other incentives for them. Darragh29, to frame the discussion, what range of capital investment would your idea/business need? Over what time period? And what cost of capital could you live with?

Sonnenblumen

Darragh29 wrote: »

Very few people who have an idea actually follow it through and attempt to market it...



I never suggested freebies, handouts or mothers milk. What I suggested was a mechanism whereby a business promotor could BORROW funds that I suggested could be partially secured by way of an investment deposit which I suggested would be 33%, not unlike the way in which a credit union issues loans.

I also suggested that IDLE state assets like IDA units & office space around the country, be used as new types of dedicated business start-up centres, with facilities like broadband available and facilities like back office support, etc, being available to entrepreneurs and also each centre having a mentor available to help members...

Can you come back and explain where hand outs, freebies or breastfeeding arise in relation to what I have suggested???

Also, you need to grow up and come to terms with the fact that entrepreneurs cannot get access to capital and at the same time we have a high flying bank chairman lending himself nearly 90 million Euro which would appear to be unsecured.

You try going into your bank and asking for 90 million Euro in unsecured lending.

You're looking for discounted mainly unsecured loans, use of state assets which you claim are idle etc You're obviously not aware of the various incubator business units around the country, so it all seems a little tinted.

Sorry but Chairman loans are not relevant, what is that more than 9 out of 10entrepeneurs fail (for a variety of reasons - but lack of funding I would imagine is not # 1). So with such failure rates, of course individuals and private funds are going to be cautious, perhaps very cautious. Why should the state be different? BTW an entrepeneur is someone who has started a business and running successfully, and not someone with an idea.

Most ideas don't even have proper business plans, but yet convinced they are going to conquer the world. There's always money around for well developed commercial business plans.

Darragh29

Sonnenblumen wrote: »

You're looking for discounted mainly unsecured loans, use of state assets which you claim are idle etc You're obviously not aware of the various incubator business units around the country, so it all seems a little tinted.

Sorry but Chairman loans are not relevant, what is that more than 9 out of 10entrepeneurs fail (for a variety of reasons - but lack of funding I would imagine is not # 1). So with such failure rates, of course individuals and private funds are going to be cautious, perhaps very cautious. Why should the state be different? BTW an entrepeneur is someone who has started a business and running successfully, and not someone with an idea.

Most ideas don't even have proper business plans, but yet convinced they are going to conquer the world. There's always money around for well developed commercial business plans.

Chairman loans are relevant, because this is the problem with this country, one rule for the weathy and another rule for everyone else. The vast majority of small businesses can get off the ground with 100K capital at start-up. We have small businesses telling anyone who will listen that they cannot get access to capital, the banks are in denial about this, but there is no problem lending just shy of 90,000,000 to the chairman of their own bank and then when an audit comes around, they shunt the funds into another bank for a few days!?!?! Are you taking the p*ss?!?!?!

If the current government approach to small business start up ventures with regard to incubator centres being available for start-ups is so efficient, how then have we failure rates of around 90% as you claim??? Your figure by the way I agree with...