Theres an Irish version of Godwins Law. As a discussion about investment in startups in Ireland gets longer, the probability of a complaining session about Irish investors or Government bodies evolving approaches 1.
Funding is tough for anyone to find. Getting someone to part with 1,000 to 100,000 of their hard earned money shouldnt be easy. It also shouldnt be eye-wateringly difficult.
Ive lived in London for the last few years. The city is in the middle of an early and mid-stage funding boom. I routinely see companies going through and graduating from Techstars and other programs with £500k+ seed rounds in place. I see great companies getting to A and B rounds with some effort, but without the blood, sweat and tears that used to take. At even earlier stages, I see lots of people getting funded via SEIS and EIS – in the case of the former, its so compelling to invest in companies raising less than £150,000 that its almost stupid not to do it. Jobs are being created. A marketplace is being created. An ecosystem is being created.
I dont hear these stories coming out of Ireland. The interesting thing is that the perception of Ireland is amazing among the entrepreneurs I meet on my travels around Europe and the Middle East. The assumption is that our ability to attract the major global players along with the halo effect that the Web Summit has created around Ireland Inc means that were a hotspot for early stage investments, early stage companies and startup success. That doesnt feel like its the case. At least, not yet.
There are loads of brilliant ideas coming out of Ireland that have incredible potential – and I recognise that Im preaching to the converted with the audience thats likely reading this – but I do want to make it clear that I want to find a solution to the issues that seem to me to be stymieing our ability to grow and scale indigenous startups. So what can we do? Here are some thoughts that have been noodling around in my head:
How to stimulate seed and angel rounds – Irelands SEIS This is an obvious one. SEIS and EIS schemes have been huge drivers of the UKs startup success. Ireland needs to do a Rocket Internet on both schemes. One of the issues that we appear to have is that there are a lot of very smart, well paid people – both in the tech industry and elsewhere – who perhaps lack an incentive to invest or lack a framework in which they could comfortably invest. Helping them to de-risk a chunk of that investment up to a certain threshold would likely focus a lot of their accountants minds. Creating a vehicle to help select the right startups in which to invest would likely pique a lot of peoples interest. The Government spends a lot of time talking about micro-jobs. This is how you create them.
Going from prototype to seed round a national AngelList syndicate With an Irish SEIS or EIS scheme, we could quite easily look at creating some special purpose vehicle via AngelList or elsewhere to invest in Irish startups. 500 people put in 5,000 each, 50 put in 50,000 and 10 put in 500,000 each. Extend the SEIS/EIS scheme to cover the 500k investments from corporates or maybe syndicate the deals with some friendly overseas investors. Get a panel of 8/10 Irish and expat Irish entrepreneurs and investors to act as the investment fee structure committee. Run it like a normal AL syndicate – the panel members share in any carry generated, with only absolutely essential management fees paid.
Scaling and success – the worlds biggest mentor program One of the best things about investing alongside a variety of far smarter people in AngelList syndicates is the fact that youre constantly updated as to how your investment is doing and what you can do to help. We should do the same. Once people have committed to investing in companies, they should also commit to being smart money. If youre in sales at any of the major globals in Dublin, chances are you have access to contacts that most startups would bite your arm off for. With 15, 20, 50, 100 or more investors in a syndicated deal, companies would have a far greater pool of smart people to call on for specific requests. One of the reasons the Techstars program works so well is that the companies participating send simple weekly or monthly emails with specific asks for intros or help with tasks. Theres always a mentor, investor or advisor out there who can fire off an email or get on a call to help. The Irish mafia is spread far and wide enough that we should be able to create the worlds biggest mentor/advisor program.
We can make things better for founders, entrepreneurs and smart people in Ireland. We can incubate, grow and scale massive international companies. We’re already doing it. We need to start doing more of it. More startups. More jobs. More access to funding. More M&A. The only way this can start is if we JFDI.