Impartial advice about seed/expansion capital

Enterprise Ireland's approach to your requests for start up capital is to be as negative and evasive as possible.

First of all they will direct you to your city/county enterprise board, who, let's be honest, can't really do an awful lot for you. Employment grant (worth about €7500 per employee, given in two parts and you have to match what they give, and be able to prove it with PRSI/PAYE receipts before you get the cash), feasibility study grants (same value as the employment grant and again you only get the cash when you've spent an equal amount and can prove it). Some CCEBs have an equity based scheme that is worth something like €64000 as a one off investment in return for preference shares, but it isn't available in all areas.

You have to work quite hard to get money out of enterprise boards and in my opinion for the trivial sums you're talking about you'd be better off just working instead of wasting your time doing all the form filling and hoop jumping required.

If the enterprise board think you're out of their league they'll bounce you back to EI for another try. To get money out of EI you need to be able to show you're a "high potential start up", that is, a company with certain growth potential. They have specific criteria that must be met (actually the criteria aren't all that specific and they're really only guidelines they use as a starting point). You need to be internationally traded, you need to show a potential for employing more than 15 or so people (and hopefully many more) within 18 months, you have to show your turnover growing to more than €1million in the same period etc etc (I may have got these figures slightly wrong but they're in the ball park). In my experience EI will be continually negative and evasive for quite some time (regardless of how good your idea is...I think they have a policy of saying "no" for a very long time so that anyone who isn't totally serious about their idea will probably give up and not waste anyone's time).

If you do get past this initial problem you will almost certainly be able to get a feasibility study grant, which is pretty much the starting point on your relationship with EI, you should also be able to get mentor support. The FSG is worth about €19000 but you have to put in an equal amount and you only get the money from EI once you've spent it (this is the way pretty much all EI grants work so don't be thinking anyone's going to give you a wad of cash for you to go off and try out your idea, you need to spend your own wad first then they will re-imburse you). Watch out for the EI mentors, some of them are completely crap. Some are very good, don't be afraid to ask for a change if the one they appoint doesn't suit.

Beyond the FSG there are other grant supports you can get from EI but these can be bad ways to raise finance.

So where does the EI system fall down? Well say, for instance you had a product that could be made by the million by a staff of 3, you could sell one to every household in ireland but no-one else in the world would want one, and they wore out after a year so everyone would have to buy another one. This is a fantastic business but you probably wouldn't get funding from EI because it's not internationally traded and you wouldn't employ loads of people.

EI are better than they were but they still aren't good and it is still very easy to fall down a great chasm that exists between the enterprise boards who don't have enough money to get reasonable sized projects off the ground and EI who are export focussed.

The piece of information you missed out is how much money you're looking for...and it's a bit ambiguous to say you're looking for "growth/startup finance" because they're both very different and will often come from different sources.

If you really are just starting off your business idea is probably not properly formulated yet (I'm not being judgemental or critical here, it's just the way it is. I think almost every business that starts off with an idea of what they want to do end up doing something different by the end of their first year. It's not until you actually start doing something for real that you can see how it works). A feasibility study might be a good idea but you might not get in the door of EI if you don't meet their criteria and the enterprise board FSG might be too small.

The banks are a relatively cheap and easy source of finance. A loan or an overdraft can often be the place to go to begin with. You can see precisely what you're getting you can agree terms that fit in with what you want to do (yes, the banks actually are quite flexible in this regard), you don't lose any of your company (investors will want a percentage of your business, they will probably want to put somebody on your board to keep an eye on you, they may even start telling you what to do!!).

whatever you do, don't re-mortgage the house. If your business goes bad it's going to be hard on you anyway, but you should be able to walk away from it, dust yourself off and put it down to experience, go home to the wife and kids and start again. You don't want to end up living in a cardboard box just because your business idea didn't work out the way you'd hoped.

DBIC...they're the people based at The Guinness Enterprise Centre and the Tower, Pearse Street if I remember correctly. I know of a couple of companies that received a lot of support (ie money) from them but this was some time ago, I don't think they have so much money to throw around these days and are, as a result, a lot more selective in the projects they support.

I know of a few people who've managed to get up to the level of support from EI where they don't have to stump up the cash before getting any back but as far as I am aware the feasibility study grant is pretty much a pre-requisite to everything as far as EI are concerned, you have to do this first before they will move you on to the next level, and in an FSG you have to pay (and prove you've paid) then claim.