Access to funding is a major challenge for innovative start-up businesses. Without assets or revenue, these companies struggle to secure loans or attract equity investors. However, Ireland has seen a growth in its seed capital sector and offers state support to assist high-potential start-ups in commercializing their ideas and achieving profitability.
Owen O’Driscoll, co-founder and CEO of PlanDail (now rebranded as Trrue), emphasizes the importance of funding for start-ups. While government grants can be beneficial, O’Driscoll points out that they often come with conditions that may force a start-up to deviate from its original direction. He believes that the one-size-fits-all approach does not work for all companies and can create unnecessary tension.
Trrue has received grants from Enterprise Ireland’s New Frontiers program and is considered a high-potential start-up. However, O’Driscoll feels that these grants are not adaptable to the growth of each individual start-up. He suggests a hybrid model that combines state and private funding, as well as a reduction in the number of grants available to encourage small angel investors to participate.
Pete Townsend, managing director of the Techstars Web3 accelerator program, invests in 12 start-ups per year within the Web3 ecosystem. He advises start-ups to ensure their ideas work and generate revenue before seeking seed funding. Townsend praises the financial support provided by organizations like Enterprise Ireland but cautions that patience and careful navigation of the process are necessary. He advises start-ups to raise a pre-seed round by speaking to potential customers and finding a venture capitalist who believes in their idea.
Connor Cantwell, partner with COSIMO Ventures, also focuses on the Web3 sector and believes that Ireland is falling behind in terms of start-ups. He compares the start-up scene in Ireland to that of the UK, where there are numerous schemes that allow individual investors to invest in start-ups and benefit from generous tax breaks. Cantwell argues that Ireland lacks similar schemes and that the country’s focus on foreign direct investment (FDI) hinders the growth of start-ups. He also highlights the high capital gains tax (CGT) in Ireland as a deterrent for non-national start-ups considering locating in the country.
In Cantwell’s opinion, lack of access to funding and high CGT are major obstacles for start-ups. He admires the resilience of start-ups who take high risks and often go years without a salary, only to pay a significant portion of their upside to the taxman. Cantwell believes that the gap between Ireland and other countries in terms of support for start-ups is widening.