It’s not a bad time to be a Tech startup.
Mike Butcher of TechCrunch describes the pitchfest that went on at Web2Expo Europe.
But back in Pitchamp, the startups were ranked by judges. The winner ended up being Wuala, which we’ve written about extensively. In second place was Youcalc. And – can you believe it – there was a three-way tie for third place which went to Amazee, Plista and SofaTutor.
As the article continues, we don’t get much opportunity to pitch ideas to investors due to a weak investor/angel environment in the UK (and especially Northern Ireland). And this is a shame because there’s a lot of good ideas coming out of the region and the reason they fail is more to do with the environment – the same idea pitched in Silicon Valley might garner funding and allow expansion.
The idea of venture capital is also poorly understood in the province. At this month’s Belfast Open Coffee Club I had the unenviable position of explaining the role of VCs, their need for some sort of control in decisions and the purpose of organisations like Invest Northern Ireland, InterTradeIreland and Enterprise Ireland. The fact is – very few bright young things with good ideas know the first thing about running a business especially when it comes to actually having employees. And that’s no bad thing – I’d rather have a genius working on ‘hard problems’ than wasting time trying to work out tax and national insurance contributions. And, let’s face it, a Venture Capitalist or Business Angel is going to want to have some oversight about how their money is spent – rather than trusting a coder whizzkid not to blow half the money on a classic Porsche which he’ll plant into a tree the next day. While you might not do something like that – you can understand why they might want someone on your board or want a substantial percentage of the company in return for the money.
Last week in the Irish Times, John Collins wrote that although the tech industry in Ireland seems to be vibrant, funding is an issue for startups.
ON THE face of it, Ireland has a vibrant technology industry. Speaking at a recent event in London, Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughlan said that software now accounts for almost €12 billion in Irish exports which are generated by 800 Irish and international firms. Strip out the multinationals and the indigenous contribution is still €2 billion, a massive improvement on 10 years ago when the figure was less than €100 million.
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The most recent figures from the Irish Venture Capital Association suggest that Irish start-ups received €225.94 million in funding last year, 17 per cent up on 2006 and the most since 2002.
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Just as Irish firms are having to look overseas for investment, there are signs that Irish VCs are travelling further afield for investments.
Back in July, Ireland’s VC environment was described to me (by an entrepreneur) as weak and the phrase “Voyeur Capitalist” was coined which gave us some mirth (though in truth it’s gallows humour). The perception from this entrepreneur was that there were too many people involved in the VC industry locally who wanted to be seen to be VCs because of implied prestige rather than because of any real desire to take a chance on anything new in technology. A considerable number of VCs do exist in Ireland though they may be focussed on their own areas due to their personal expertise – perhaps polymers and plastics, manufacturing or life sciences.
In the current market with every newspaper reporting the doom and gloom of economic downturn, it’s harder to recall that unemployment is still down, other industries are doing okay and it’s only the property market (and the mortgage lenders and estate agents who propped it up far beyond it’s actual value) who are suffering. It’s just a shame that our banks – who hold our money – are also some of these lenders.