A GUIDE TO VENTURE CAPITAL THIRD EDITION Irish Venture Capital by guy21

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									                                                                              A GUIDE TO
                                                                              VENTURE CAPITAL
                                                                              THIRD EDITION




                                                                                  Irish Venture Capital Association
                                                                   in association with InterTradeIreland’s EquityNetwork


The Old Gasworks Business Park
Kilmorey Street, Newry
BT34 2DE, Co. Down

Tel:   028 3083 4151                  3 Rectory Slopes,
       (RoI: 048 3083 4151)           Bray, Co. Wicklow
Fax:   028 3083 4155                  Tel:    353 (0) 1 276 4647
       (RoI: 048 3083 4155)           Fax:    353 (0) 1 274 5915
Email: equity@intertradeireland.com   Email: secretary@ivca.ie
Web: www.intertradeireland.com        Web: www.ivca.ie
CONTENTS
Foreword        by Desmond Fahey,
                Chairman of the Irish Venture Capital Association   2

Foreword        by Barry Fitzsimons,
                Chair of EquityNetwork                              3

An Introduction to Venture Capital                                  4

   •   What is venture capital/private equity?                      5

   •   How do I make my company attractive to
       a venture capitalist or an investor in general?              5

   •   Benefits of venture capital                                  7

   •   Questions to ask before approaching
       a venture capitalist                                         8

   •   The Business Plan                                            10
The Role of the Non-Executive Director                              14

Sources of Venture Capital                                          15

Glossary of Terms                                                   28

Irish Venture Capital Association Council                           33

Irish Venture Capital Association – Associate Members               34

EquityNetwork – Steering Committee                                  38
              – Executive                                           38
Useful Contacts                                                     40




Third Edition                                                            1
           A GUIDE TO
           VENTURE CAPITAL




                Foreword                                                           Foreword
                 DESMOND FAHEY                                                      BARRY FITZSIMONS
                 Chairman of the Irish Venture Capital Association                 EquityNetwork, Vice-Chair of InterTradeIreland


    The Irish Venture Capital Association represents members who       IInterTradeIreland’s joint publication with the Irish Venture
    professionally manage over 95% of the €1 billion managed by        Capital Association, A Guide to Venture Capital, was first
    venture capital funds in Ireland. The Irish VC industry is         published in 2003. The Guide, the first of its kind, has become
    relatively young by comparison to the U.S.A and Europe but is      the first point of contact for anyone seeking information on
    developing very well. During the last five years, our member       venture capital on the island of Ireland. The Guide contains all
    VC companies invested over €1 billion into over several hundred    the sources of funding on the island, it aims to enable the
    Irish enterprises. These companies today employ thousands of       entrepreneur to see what funding is available and give pointers
    Irish graduates and technically qualified personnel. The value     on how to go about sourcing funding.
    added to investee companies by experienced VC professionals
    is very important for developing enterprises.                      InterTradeIreland’s collaboration with the Irish Venture Capital
                                                                       Association in producing the Guide and in developing other
    During 2004 divestments by Irish VC companies yielded €190         initiatives has certainly strengthened the quality of the service
    million, achieved through trade sales, public offerings, debt      InterTradeIreland is able to offer. As the industry body on the
    repayment and sales to other investors. While an increase in       island the IVCA is an excellent partner for EquityNetwork
    divestment is to be expected at this stage of the venture          across a range of venture capital initiatives.
    capital life cycle, it also demonstrates that an exit market is
    developing, providing the essential disposal mechanisms tothe      InterTradeIreland now supports ‘Halo’ business angel networks
    venture capital industry. Over €150 million of VC money is         in Northern Ireland and the Republic. In the north through
    still available for qualifying entrepreneurs however, the Irish    Investment Belfast in collaboration with Invest NI and the NI
    venture capital industry will require significant funding in       Bankers Association and in the south through Dublin Business
    2006 if the level of investment in internationally focused Irish   Innovation Centre with the collaboration of Enterprise Ireland
    enterprises is to continue at the rate required for our            and the regional BICs.
    knowledge economy.                                                 Research undertaken in 1999 by InterTradeIreland into private
    This publication ‘A Guide to Venture Capital’ is published in      equity provision on the island revealed a dramatic increase in
    collaboration with EquityNetwork, gives details of our             the amounts of private equity raised and invested in the
    members, useful contacts, some other sources of financial          previous decade. However, certain regions showed slower signs
    funding and a glossary of terms. It is an excellent resource for   of growth and a low level of uptake – due primarily to a
    corporate financiers, accountants and lawyers as well as for       shortage of quality deals rather than the availability of funds.
    those seeking venture equity. I hope you find it useful.           The research also highlighted a gap in the supply of equity
                                                                       finance to early stage start up projects. This is not peculiar to
                                                                       the local market but reflects the high level of risk of funding
                                                                       such projects and the cost of managing the investment,
                                                                       relative to the actual funds invested.

                                                                       To address these shortfalls InterTradeIreland developed
                                                                       EquityNetwork. EquityNetwork provides the following services
                                                                       to the business community:

                                                                       • Value added information services to businesses to assist in
                                                                         making them ’investor ready’
                                                                       • Signposting for businesses seeking equity finance
                                                                       • Support for business angel networks on the north and south
                                                                         of the island
                                                                       • An island-wide education programme to raise awareness of
                                                                         the availability and benefits of using private equity

2                                                                      I hope you continue to find the Guide useful.                       3
           A GUIDE TO
           VENTURE CAPITAL




    An Introduction to
    Venture Capital
    Venture Capital/Private Equity is medium to long-term finance   What is venture capital/private equity?
    provided in return for a shareholding in unquoted companies.
    For the purposes of this guide ‘Private Equity’ refers to       Venture Capital/Private Equity; provides long-term, committed
    ‘Venture Capital’ and ‘Business Angel’ investments at stages    share capital, to help unquoted companies grow and succeed.
    in a company’s development, from the seed to expansion          If you are looking to start up, expand, buy into a business,
    stages, as well as management buy-outs and buy-ins. The terms   buy out a division of your parent company, turnaround or
    Venture Capital and Private Equity should therefore be          revitalise a company, Private Equity could help.
    regarded as interchangeable phrases.                            Obtaining private equity is very different from raising debt
    The purpose of this booklet is to encourage you to start        or a loan from a lender, such as a bank. Lenders, who usually
    planning early when seeking finance to accelerate the growth    seek security such as a charge over the assets of the company,
    of your business. It will explain how a Venture Capitalist      will charge interest on a loan and seek repayment of the
    approaches the process of investing equity in a business and    capital. Private equity is invested in exchange for a stake in
    what you need to do to improve your chances of raising          your company and, as shareholders, the investors' returns
    equity. It gives guidance on what should be included in your    are dependent on the growth and profitability of your
    business plan, the most important document you will produce     business. The investment is unsecured, fully at risk and
    when searching for a private equity investor. The guide also    usually does not have defined repayment terms. It is
    demonstrates the positive advantages that venture               this flexibility which makes private equity an attractive
    capital/private equity will bring to your business.             and appropriate form of finance for early stage and
                                                                    knowledge-based projects in particular.
    The main sources of private equity on the island are Venture
    Capital Funds, Business Angels (private individuals who
    provide smaller amounts of finance at an earlier stage than     How do I make my company attractive to a
    many private equity firms are able to invest at), Government    Venture Capitalist or an investor in general?
    Agencies (depending upon the sector your business operates
    in, the presence of other investors and where the business is   Many small companies on the island do not grow and so
    in its development cycle) and Corporate Venturers. Corporate    do not provide 'upside potential' for the owners other than
    Venturers can be product related or service companies that      to provide a good standard of living and job satisfaction.
    provide funds and/or a partnering relationship between          These businesses are not generally suitable for private equity
    mature and early stage companies which may operate              investment, as they are unlikely to provide sufficient financial
    in the same industry sector.                                    returns to make them of interest to an external investor.

    This Guide's principal focus is upon Venture Capital Funds.     High potential businesses can be distinguished from others
    However, the investment criteria that both Venture Capital      by their aspirations and potential for growth, rather than by
    Funds and Business Angels apply when assessing potential        their current size. Such businesses are aiming to grow rapidly
    investee companies is often very similar - therefore the        to a significant size. As a rule of thumb, unless a business can
    guide will benefit entrepreneurs and their advisers looking     offer the prospect of significant turnover growth within three
    for private equity from both these sources. In short, the       to five years, it is unlikely to be of interest to a private equity
    aim is to help you understand what Venture Capital Funds        investor. This usually means that the market for the product
    are looking for in a potential business investment and          and service will not solely be on the island.
    how to approach them.
                                                                    Private equity investors are interested in companies with high
                                                                    growth prospects, enjoy barriers to entry from competitors,
                                                                    are managed by experienced and ambitious teams and have
                                                                    an exit opportunity for investors which will provide returns
                                                                    commensurate with the risk taken.




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      Venture Capital Funds normally agree their investment                                                  Benefits of Venture Capital
      criteria with those who have invested in the fund, for
      example, preferred sectors and stages of development.                                                  In the current economic climate on the island, most fast
      Business Angels also usually prefer to invest in projects                                              growth start-ups are knowledge based. Given that these
      which reflect their own skillsets or investment history.                                               projects cannot offer tangible security to traditional debt
      When approaching a Venture Capitalist or a Business Angel,                                             financiers or predictable cashflows to service loans, private
      it is important to understand if their investment criteria or                                          equity is the obvious source of finance to fill the financing
      preferences match your project.                                                                        gap. Investment executives working with Venture Capital
                                                                                                             Funds attempt to identify the best projects in order to
      Earlier stage projects normally reflect a higher level of risk                                         minimize their investment risk.
      for equity investors, so it's important that entrepreneurs                                             Research has shown that Venture Capital backed companies
      explore all possible sources of finance when fundraising.                                              grow faster than other types of companies, employ more
      The diagram below highlights the likely sources of funds                                               people and are more profitable when benchmarked against
      for businesses at different stages of development.                                                     their peers. This is made possible by a combination of capital,
                                                                                                             Venture Capitalists identifying and investing in the best
                                                                                                             investment opportunities and input from Non-Executive
      USE AND SOURCE OF PRIVATE EQUITY                                                                       and Executive Directors introduced by the VC investor
      IN BUSINESS DEVELOPMENT                                                                                (a key differentiator from other forms of finance)

     STAGE       R&D         START-UP         EARLY    ACCELERATING        SUSTAINING          MATURITY
     CYCLE                                   GROWTH      GROWTH             GROWTH             GROWTH


               Proof of           Seed         First       Second          Development         Replacement
               Concept            Corn        Round        Round             Capital             Capital
    TYPE OF    Funding
    FUNDING                                                                                       MBO/
                                                                                               Development
                                                                                                 Capital


                  Public Sector

              Founders, Family and Friends
    SOURCES                   Business Angles
      OF
    FUNDING                                             Venture Capital

                            Corporate Venturing

                                                                          Public Listing/IPO




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    Questions to ask before                                             This usually includes debt finance from banks to finance
    approaching a Venture Capitalist                                    working capital and asset purchases, grant aid from
                                                                        development agencies and, indeed, an equity investment
    Does my company have high growth prospects and                      from the promoters. Such an investment from the
    is my team ambitious to grow the company rapidly?                   promoters/management team can help demonstrate
                                                                        commitment to a project and may attract fiscal incentives
    Does my company have a product or service with                      in the form of the Business Expansion Scheme, Enterprise
    a competitive edge or unique selling point?                         Investment Scheme or Enterprise Management Incentives,
    Can it be protected by Intellectual Property Rights?                depending upon the jurisdiction the company is based in and
                                                                        other criteria. Professional help should be sought to confirm
    Can I demonstrate relevant industry sector experience?              eligibility and benefits of these schemes at an early opportunity.
    Does my team have the relevant skills to deliver                    The end result is likely to be a funding package which includes
    the business plan fully?                                            a cocktail of funders secured with the assistance of the
    Am I willing to sell some of the company's shares to                Venture Capitalist. It is this flexibility and value-added input
    a private equity investor?                                          from a private equity investor which differentiates them from
                                                                        other funders.
    Is there a realistic exit opportunity for all shareholders
    in order to realise their investment?                               Venture Capitalists look for capital gains from their investments.
                                                                        They adopt a portfolio approach to their investments which
    Am I prepared to accept that my exiting this business               reflects their strategy to mitigate the risk of investing unsecured
    may be in the best interest of all shareholders?                    funds in early stage companies. Before they invest, VC executives
    If your answers are 'yes', external equity is worth considering.    will consider the likelihood of realising their investment.
    If 'no', it may be that your proposal is not suitable for venture   After all, they are responsible for returning the cash invested
    capitalists and it may take additional work on your behalf to       in their fund with interest to their investors.
    make the proposal 'investor ready'.                                 The promoters ability to implement their business plan in
    When seeking to raise capital to accelerate the development         full is the obvious question, but just as importantly, can the
    of a business idea, promoters must explore all possible             company in question be sold to another trade player or find
    sources of funds. It is likely that an equity investor will         another way to redeem the venture capitalist's investment
    usually help the promoters secure other sources of funds.           within a reasonable time frame (usually between three and
                                                                        seven years)?




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     The Business Plan                                                   1. The Product / Service

     The business plan is the most important document for a              In simple language, this should explain what exactly the
     company seeking to raise finance from private equity investors.     product / service offering is. This will clearly demonstrate
     It should demonstrate what the business opportunity is,             the unique selling point of your offering, differentiation from
     the amount of funds required to deliver the business plan           other products, barriers to entry etc and how your product /
     and a management team capable of implementing it.                   service will add value to the purchaser.
     Venture Capitalists read numerous business plans from
     a wide range of sources and they must invest in the best            2. The Market
     projects. Their first impression of your business plan will         A common mistake that entrepreneurs make is to express
     determine whether they take their interest any further. It is       their market in terms of a global figure representing all activity
     absolutely essential that your business plan demonstrates           within their sector. The private investor requires comfort that
     an 'investor ready' project.                                        there is a commercial opportunity for your product/service
                                                                         and that the management team has the ability to exploit
     The following section is intended to give you a summary             this opportunity.
     of what the business plan should include:
                                                                         The marketing section should demonstrate who the customer
                                                                         base is likely to be, how the product / service will be priced,
     Executive Summary                                                   how it will be distributed to customers, an analysis of
     This is the key part of the document which must immediately         competitors and how you will deal with competing goods
     and clearly articulate the investment opportunity for the reader.   and services.
     The Executive Summary should make a potential investor              It is unlikely that there will be no rivals in your market sector
     believe that your unique proposition has the potential to make      and you should avoid comments like 'there is no competition'
     a good return on their investment and that you and your team        or, 'our product is totally new'. If no one has thought of
     have the ability to deliver what the plan says.                     offering a similar or competing product, is it conceivable
     If this part of the Business Plan is not presented with             that there is no demand for your product or that customers
     conviction and in clear language, you may miss the                  do not realise that they need it?
     opportunity of ensuring that a potential investor takes
     the time to read your entire plan.                                  3. Management Team
                                                                         Most venture capitalists will tell you that they invest in
     The detailed plan should give full details under the                people not ideas.
     following headings:
                                                                         The management team must sell their experience to
       1.   The Product / Service                                        investors as well as their understanding of the market which
                                                                         they are targeting.
       2.   The Market
       3.   Management Team                                              This section must convey the message that the team has
       4.   Business Process / Operations                                the full complement of skills required to deliver the plan.
                                                                         Indeed, it is prudent to identify skill gaps which must be
       5.   Financial Projections                                        addressed in order to deliver the plan as new investors in
       6.   Proposed Investment Opportunity                              a business can utilise their networks to fill the gaps.
                                                                         Non-Executive Directors (NEDs) are an obvious source of
                                                                         expertise for early stage companies to address this issue and
                                                                         and Venture Capital Fund managers usually appoint a NED to
                                                                         investor companies to help them avoid the pitfalls of growing
                                                                         a business. Further details on NEDs can be found in the next
                                                                         section of the guide.


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     4. Business Processes / Operations                                    6. Proposed Investment Opportunity / Exit
     This section explains how the business operates, be that              This is the opportunity to identify the level of funds required,
     manufacturing products, delivering a service, or both.                how and when they will be spent, and an outline showing
     It should demonstrate that any necessary R&D can be fully             how investors will receive a return on their investment.
     undertaken and that an appropriately skilled workforce                As with the financial projections the exit opportunity should
     is available.                                                         be realistic and take account of current market conditions.
     The location of the business and the physical infrastructure          It cannot be stressed too much that the Business Plan is the
     will also be detailed. Care should be taken to demonstrate            single most important document that you will provide for
     that there is sufficient flexibility within systems, facilities and   potential private equity investors. It must be coherent, well
     human resources to expand the business in line with its               presented and of a length which maintains the interest of
     projected growth.                                                     the reader. It is essential that you strike a balance between
                                                                           providing the investor with sufficient information to evaluate
     Whilst there may be a market for the product/service being            the investment opportunity while not overloading them with
     offered, you must ensure that the proposed location, process          technical information.
     and utilisation of resources (human and physical) are the best
     available to exploit this opportunity.

     5. Financial Projections
     An investor will always wish to review a detailed set of
     integrated financial projections which encompasses profit
     and loss accounts, balance sheets and cashflow statements.
     These figures will be supported by detailed assumptions
     which reflect the content of the business plan.
     The projections must be realistically achieveable, but they
     must also be sufficiently ambitious to demonstrate that there
     is an attractive investment opportunity. These projections will
     form the basis of any term sheet which an equity investor
     may issue.
     Negotiation with the Venture Capitalist over valuation, future
     milestones and ultimate exit opportunities will be influenced
     by the delivery of the financial projections. Much consideration
     should be given to this section to produce realistic projections
     and indicate an openness to work with the investor in the
     future to deliver a common goal – the maximising of value.




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     The Role of the
     Non-Executive Director                                             Sources of Venture Capital
     The considerable amount of media attention on the issue            Fund Managers/Funds
     of corporate governance has highlighted the role of                                          ACT VENTURE CAPITAL
     Non-Executive Directors. It is well documented that                 Niall Carroll                          FUND SIZE
     Non-Executive Directors can make a significant contribution         MANAGING DIRECTOR                      €300m
     to company performance regardless of size. The use of               Richview Office Park,                  INVESTMENT RANGE
     Non-Executive Directors is one way of accelerating the              Clonskeagh, Dublin 14                  €750,000 – €15m
     development and growth of SMEs and whether it is a                  T. 01 260 0966
                                                                                                                SECTORS
     longstanding traditional business or a start-up seeking equity      F. 01 260 0538
                                                                                                                Information and communications,
                                                                         E. info@actvc.ie
     finance, non-executives can bring added value with objectivity                                             technologies, medical devices and
                                                                         w. www.actventure.com
     drawn from their own experience and skills.                                                                life sciences.
                                                                         NOTES
     It is normal for Venture Capital investors to place a               ACT's funds are sourced from leading domestic and international financial
     Non-Executive Director on the Board of the investee company         institutions. Investments are made in companies at all stages of their
     to represent their interests. This can either be one of its own     growth, with a particular interest in early stage companies. With its
     fund managers or an individual who has sectoral, market,            extensive contacts and widely experienced team, ACT plays an active
                                                                         supportive role in helping companies to expand into international markets.
     or management expertise which will help delivery of the
     corporate plan.
                                                                                                       AIB EQUITY
     Most Venture Capitalists, however, recognise that the chemistry     Laurence Endersen                      FUND SIZE
     and teamwork between the non-executive and the existing             DIRECTOR OF AIB EQUITY                 €25.4m
     management team is crucial. As a result, the VC's Non-Executive     AIB Equity, AIB International Centre   INVESTMENT RANGE
                                                                         IFSC, Dublin 1
     Director is there to play an integral role in the development of                                           €250,000 – €750,000
                                                                         T. 01 641 7993
     the company rather than act as a watchdog for their investment.     F. 01 829 0269
                                                                                                                SECTORS
     This availability of outside expertise to the management team                                              Domestic Technology Sector
                                                                         E. laurence.c.enderson@aib.ie
     represents a valuable asset for most companies, particularly
     start-ups, and is one reason why Venture Capital is regarded
     as a value-added source of finance for SMEs.                        NOTES
                                                                         The fund is now closed to new investments.




                                                                                                   ALCHEMY PARTNERS
                                                                         Brian Stephens                         FUND SIZE
                                                                         10 Fitzwilliam Square                  €1.4bn
                                                                         Dublin 2                               INVESTMENT RANGE
                                                                         T. 01 661 2671                         €15m.+
                                                                         F. 01 661 3057                         SECTORS
                                                                         E. info@alchemypartners.com            All
                                                                         w. www.alchemypartners.com




                                                                         NOTES




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                           ALLIANCE INVESTMENT CAPITAL                                                    BOI VENTURE CAPITAL
     Frank Traynor                          FUND SIZE                            Brendan Vaughan                        FUND SIZE
     MANAGING DIRECTOR                      €9.5m                                FUND MANAGER                           €19m
     CFI House, Clonskeagh Square           INVESTMENT RANGE                     40 Mespil Road                         INVESTMENT RANGE
     Dublin 14                              €500,000 – €2m                       Dublin 4                               Up to €2m
     T. 01 283 7656                                                              T. 01 665 3443
                                            SECTORS                                                                     SECTORS
     F. 01 283 7256                                                              F. 01 665 3484
                                            All                                                                         ICT
     E. frank.traynor@allinv.com                                                 E. Brendan.Vaughan@boimail.com
     w. www.alliance.ie                                                          W. www.boi.ie/venturecapital


     NOTES                                                                       NOTES
     The first Alliance Investment Capital Venture Fund was launched in 1999.    Dublin based fund with regional offices in Tullamore,
     Limited Partners are Royal Bank of Scotland Private Equity and Enterprise   Galway, Limerick and Cork.
     Ireland. CFI Equity Fund Limited is a sister company to Dublin based
     corporate finance firm, Corporate Finance Ireland Ltd. The fund has
     invested in five companies and is now closed for futher investments.


                         ANGLO IRISH CAPITAL PARTNERS                                          CAMPUS COMPANIES VENTURE CAPITAL FUND
     Pat Walsh                              FUND SIZE                            Patrick Ryan                           FUND SIZE
     INVESTMENT DIRECTOR                    €15m                                 CHIEF EXECUTIVE                        €7.6m
     Stephen Court, 18-21                   INVESTMENT RANGE                     Office 107, Adelaide Chambers          INVESTMENT RANGE
     St Stephens Green, Dublin 2            €500,000 – €2m                       Peter Street, Dublin 8                 €100,000 – €600,000
     T. 01 616 2705                                                              T. 01 449 3200
                                            SECTORS                                                                     SECTORS
     F. 01 616 2895                                                              F. 01 449 3299                         Information Technology, Commun-
                                            All
     E. patwalsh@angloirishbank.ie                                               E. info@campuscapital.com              ications, Internet, Electronics,
     W. www.angloirishbank.ie                                                    W. www.campuscapital.com               Biotechnology, Medical – Other,
                                                                                                                        Consumer goods and other.
     NOTES                                                                       NOTES
     The fund provides equity capital for development capital, management        Specialise in seed and early stage for companies registered in Ireland
     buyouts/buyins and shareholder release.                                     and promoted by graduates of Irish Universities.




              BOI KERNEL CAPITAL PARTNERS PRIVATE EQUITY FUND                                              CRESCENT CAPITAL
     Niall Olden                            FUND SIZE                            Colin Walsh                            FUND SIZE
     MANGING DIRECTOR                       €19m                                 MANAGING DIRECTOR                      £14m
     Unit 4, Westpoint Buildings,           INVESTMENT RANGE                     5 Crescent Gardens                     INVESTMENT RANGE
     Westpoint Business Park,               €300,000 – €1.5m                     Belfast BT7 1NS                        £250,000 – £750,000
     Ballincollig, Cork                     SECTORS                              T. 028 9023 3633                       SECTORS
     T. 021 482 6030                        All except property.                 F. 028 9032 9525                       Manufacturing, tradable services
     F. 021 482 6034                                                             E. mail@crescentcapital.co.uk          and IT in Northern Ireland.
     E. niall.olden@kernelcapital.ie                                             W. www.crescentcapital.co.uk
     W. www.kernelcapital.ie

     NOTES                                                                       NOTES
     The Fund invests in all sectors and in companies at all stages of           One half of funding is allocated to the expansion funding of younger
     development. From High Potential Start Ups to more mature MBO and           companies. The balance of the fund is allocated to development capital
     MBI opportunities. The maximum investment per company is 3m.                for mature companies, MBOs and MBIs.
     The Fund will also consider supporting high potential ‘pilot projects’ on
     case by case basis.



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                                  DELTA PARTNERS                                                         EMERGING BUSINESS TRUST
     Frank Kenny                              FUND SIZE                            Teresa Townsley                        FUND SIZE
     MANAGING PARTNER                         €130m                                PARTNER                                £1m
     Fujitsu Building, South County           INVESTMENT RANGE                     38-42 Hill Street                      INVESTMENT RANGE
     Business Pk, Leopardstown, Dublin 18     €500,000 +                           Belfast, BT1 2LB                       £25,000 – £150,000
     T. 01 294 0870                                                                T. 028 9031 1660                       SECTORS
                                              SECTORS
     F. 01 294 0877                           Communications technology,           F. 028 9031 1880                       Niche businesses
     E. venture@delta.ie                      software, life sciences.             E. info@emergingbusinesstrust.com
     w. www.delta.ie                                                               W. www.emergingbusinesstrust.com


     NOTES                                                                         NOTES
     This fund is currently investing.                                             Niche businesses with an emphasis on technology. The fund is
                                                                                   currently closed.




                     DUBLIN BUSINESS INNOVATION CENTRE                                         ENTERPRISE EQUITY VENTURE CAPITAL GROUP
     Alex Hobbs                               FUND SIZE                            Conor O'Connor                         FUND SIZE
     The Tower, TCD Enterprise Centre         €6.4m                                CEO                                    €25m
     Pearse Street, Dublin 2                  INVESTMENT RANGE                     Dublin Road, Dundalk, Co. Louth        INVESTMENT RANGE
     T. 01 671 3111
                                              €65,000 – €250,000                   Mervue Business Park, Galway           €150,000 – €1,250,000
     F. 01 671 3330                                                                T. 042 933 3167 / 091764814            SECTORS
                                              SECTORS
     E. dscf@dbic.ie                                                               F. 042 933 4857 / 091764615            All sectors in the border, midlands
                                              Technology-led IT, Telecoms,
     W. www.dbic.ie                                                                E. info@enterpriseequity.ie            and the west region with the exception
                                              Software and other sectors
                                                                                   W. www.enterpriseequity.ie             of property retail and hotels.

                                                                                   NOTES
     NOTES
                                                                                   Established by the International Fund for Ireland.
     Dublin Business Innovation Centre manages the Dublin Seed Capital
     Fund and Irish BICs Seed Capital Fund. The Funds were established by
     Dublin BIC to provide seed and early-stage equity capital to emerging,
     start up and developing companies across a range of technology-led sectors.


                            EIRCOM ENTERPRISE FUND                                             ENTERPRISE EQUITY VENTURE CAPITAL GROUP
     Maura Moore                              FUND SIZE                            Aidan Langan                           FUND SIZE
     EXECUTIVE DIRECTOR                       €2.54m                               CEO                                    £16m
     53 Merrion Square                                                             78a Dublin Road                        INVESTMENT RANGE
                                              INVESTMENT RANGE
                                                                                                                          Up to £2m
     Dublin 2                                 €38,000 – €508,000                   Belfast, BT2 7HP
     T. 01 647 1866                                                                T. 028 9024 2500                       SECTORS

     F. 01 661 3897
                                              SECTORS
                                                                                   F. 028 9024 2487
                                                                                                                          High growth sectors
                                              Communications, other.                                                      throughout Northern Ireland
     E. mmoore@eircom.ie                                                           E. info@eeni.com
     W. www.eircom-enterprise-fund.ie                                              W. www.eeni.com



                                                                                   NOTES
     NOTES                                                                         Established by the International Fund for Ireland.
     Eircom Enterprise Fund provides risk capital to young high growth
     companies operating in the 'tmt' sector. The fund is now committed.




18                                                                                                                                                                 19
               A GUIDE TO
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                 ENTERPRISE EQUITY VENTURE CAPITAL GROUP                                                 GLANBIA ENTERPRISE FUND
     Tom Shinkwin                          FUND SIZE                                Joe Doddy                              FUND SIZE
     INVESTMENT EXECUTIVE                  €25m                                     MANAGER OF INNOVATION SERVICES         €6.3m
     National Software Centre,             INVESTMENT RANGE                         74 Pembroke Road                       INVESTMENT RANGE
     NSC Campus, Mahon, Cork               €150,000 – €1,250,000                    Ballsbridge, Dublin 4                  Up to €750,000
     T. 021 230 7127                       SECTORS                                  T. 01 660 9313
                                                                                                                           SECTORS
     F. 021 230 7070                       All sectors in the border, midlands      F. 01 660 7904
                                                                                                                           Food and Beverage
     E. info@enterpriseequity.ie           and the west region with the exception   E. dealman@eircom.net
     W. www.enterpriseequity.ie            of property retail and hotels.           W. www.glanbiaenterprisefund.com


     NOTES                                                                          NOTES
     Established by the International Fund for Ireland.                             Financed by Enterprise Ireland and Glanbia, the fund is dedicated to
                                                                                    investing in emerging food companies.




                             ENTERPRISE 2000 FUND                                                         GROWCORP GROUP LIMITED
     Laurence Enderson                       FUND SIZE                              Michael Donnelly                       FUND SIZE
     FUND MANAGER                            €13m                                   CEO                                    €12.7m
     40 Mespil Road                          INVESTMENT RANGE                       3015 Lake Drive                        INVESTMENT RANGE
                                             N/A
     Dublin 4                                                                       City West Campus, Dublin 24            €100,000 – €1.27m
     T. 01 665 3494                          SECTORS                                T. 01 466 1000
                                             Fund fully invested                                                           SECTORS
     F. 01 665 3482                                                                 F. 01 466 1002
                                                                                                                           Life Sciences
     E. clare.shine@boimail.com                                                     E. grow@growcorp.net
                                                                                    W. www.growcorp.net


     NOTES                                                                          NOTES
     The Enterprise 2000 Fund, a seed capital fund set up in 1998 as a              The fund is managed by Growcorp.
     result of a partnership between Bank of Ireland and Enterprise Ireland,
     is now fully invested. Funding is available for follow on investments
     where appropriate.



                      EVP EARLY STAGE TECHNOLOGY FUND                                                HIBERNIA CAPITAL PARTNERS LIMITED
     Gerry Jones                             FUND SIZE                              David Gavagan                          FUND SIZE
     PARTNER                                 €5m                                    SENIOR PARTNER                         €77m
     Arena House, Arena Road                 INVESTMENT RANGE                       Beech House, Beech Hill Office         INVESTMENT RANGE
     Sandyford Industrial Estate             €300,000 – €700,000                    Campus, Clonskeagh, Dublin 4           Up to €16m
     Dublin 18                                                                      T. 01 205 7770
     T. 01 213 0711                                                                                                        SECTORS
                                             SECTORS                                F. 01 205 7771
     F. 01 213 0515                          ICT                                                                           General Ireland North and South
                                                                                    E. equity@hcp.ie
     E. gerry.jones@evp.ie
                                                                                    W. www.hcp.ie
     W. www.evp.ie

     NOTES                                                                          NOTES
     The fund invests in early stage High Potential Start-ups (HPSUs).              Part of the same group as Trinity Venture Capital.




20                                                                                                                                                           21
              A GUIDE TO
              VENTURE CAPITAL




                               HOT ORIGIN FUND I                                        IRISH BIOSCIENCE VENTURE CAPITAL FUND SEROBA
     David Dalton                          FUND SIZE                         Peter Sandys                            FUND SIZE
     CEO                                   €4.1m                             DIRECTOR                                €20m
     64 Lower Mount Street, Dublin 2                                         Alma House, Alma Road,
                                           INVESTMENT RANGE                                                          INVESTMENT RANGE
     T. 01 678 8480                                                          Monkstown, Co. Dublin
     F. 01 678 8477
                                           €100,000 – €300,000m                                                      Up to €3m
                                                                             T. 01 214 0400
     E. ventures@hotorigin.com             SECTORS
                                                                             F. 01 214 0432
                                                                                                                     SECTORS
     W. www.hotorigin.com                  Technology including software,                                            Therapeutics, biotechnology,
                                                                             E. info@seroba.ie
                                           hardware and bioinformatics                                               medical devices, diagnostics,
                                                                             W. www.seroba.ie
                                                                                                                     enabling technology platforms
     NOTES
                                                                             NOTES
     The fund invests at the seed and early stage in technology companies.
                                                                             The fund will invest in seed and early-stage projects, in the
     The investment is usually part of a bigger investment round.
                                                                             biotechnology, pharmaceutical and medical fields, emerging from
                                                                             leading research institutes, universities, research hospitals and from
                                                                             existing companies. Managed by Seroba BioVentures.


                              ICC VENTURE CAPITAL                                       MENTOR CAPITAL PARTNERS LIMITED PARTNERSHIP
     Joe Concannon                         FUND SIZE                         Mark Horgan                             FUND SIZE
     INVESTMENT DIRECTOR                   €230m                             CEO                                     €16.5m
     ICC Venture Capital,                  INVESTMENT RANGE                  Mentec House, Pottery Road              INVESTMENT RANGE
     Bank of Scotland (Ireland) Ltd,       €1m – €10m                        Dun Laoghaire, Co Dublin                €500,000 – €2.5m
     72-74 Harcourt Street,                                                  T. 01 205 9716
                                           SECTORS                                                                   SECTORS
     Dublin 2                                                                F. 01 205 9889
                                           General                                                                   ICT, microelectronics and software
     T. 01 415 5555                                                          E. info@mentorcapital.ie
     F. 01 408 3516                                                                                                  with enabling functionality
                                                                             W. www.mentorcapital.ie
     E. info@bankofscotland.ie
     W. www.iccvc.ie

                                                                             NOTES
     NOTES
     The fund targets companies with high growth potential, MBO’s and        Mentor Capital provides funding to companies who possess core,
     P2P operating in Ireland.                                               enabling technology with potential for significant impact on
                                                                             global markets.



                              ION EQUITY LIMITED                                                     NCB VENTURES LIMITED
     Neil O'Leary                          FUND SIZE                         Michael Murphy                          FUND SIZE
     CHAIRMAN & CEO                        N/A                               CEO                                       27m
     Fitzwilton House                      INVESTMENT RANGE                  3 George’s Dock, IFSC                   INVESTMENT RANGE
     Wilton Place, Dublin 2                €500,000 – €1m                    Dublin 1                                  125,000 –    1.25m
     T. 01 611 0500                                                          T. 01 611 5942
                                           SECTORS                                                                   SECTORS
     F. 01 611 0510                                                          F. 01 611 5987
                                           Technology, communications                                                General
     E. info@ionequity.com                                                   E. patrick.claffey@ncb.ie
                                           and services
                                                                             W. www.ncbdirect.com
     W. www.ionequity.com


     NOTES                                                                   NOTES
     Does not provide seed capital.                                          The European Investment Fund is an investor in this fund.




22                                                                                                                                                        23
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                             NITECH GROWTH FUND                                                    UNIVERSITY CHALLENGE FUND (NI)
     Theresa Wallis                         FUND SIZE                           Panos Lioulias                             FUND SIZE
     PROJECT MANAGER                        €3m                                 FUND MANAGER                               £2.75m
     ANGLE Technology Limited               INVESTMENT RANGE                    Lanyon North, Queens University            INVESTMENT RANGE
     12 Cromac Place, Belfast BT7 2JB       €20,000 – €200,000                  Belfast, University Road                   £50,000 – £100,000
     T. 028 9024 4424                                                           Belfast, BT7 1NN
                                            SECTORS                                                                        SECTORS
     F. 028 9032 6473                                                           T. 028 9068 2321
                                            R&D                                                                            Seed-Technology related
     E. nitechgrowthfund@                                                       F. 028 9027 3899
                                                                                                                           companies
        ANGLETechnology.com                                                     E. info@qubis.co.uk
     W. www.nitechgrowthfund.co.uk                                              W. www.ucfni.org


     NOTES                                                                      NOTES
     Established by Invest NI providing early stage funding to take an R&D      Established by Queens and the University of Ulster.
     Project to proof of concept and commercialisation




                                    QUBIS LTD                                                               UU TECH LIMITED
     Panos Lioulias                         FUND SIZE                           Sean Nelson                                FUND SIZE
     CHIEF EXECUTIVE                        N/A                                 MANAGER OF INNOVATION SERVICES             N/A
     Lanyon North, Queens University        INVESTMENT RANGE                    University of Ulster, Cromore Road         INVESTMENT RANGE
     Belfast, University Road               £10,000 – £50,000                   Coleraine, BT52 1SA                        £20,000 – £250,000
     Belfast, BT7 1NN                       SECTORS                             T. 028 7028 0073                           SECTORS
     T. 028 9068 2321                       Early stage Technology companies    F. 028 7028 0050                           Incubators and
     F. 028 9027 3899                                                           E. snelson@uusrp.com                       Intellectual Property
     E. info@qubis.co.uk
                                                                                W. www.ulst.ac.uk/uusrp
     W. www.qubis.co.uk


     NOTES                                                                      NOTES
     Established by Queens University. It has a portfolio of 34 technology      Established by the University of Ulster.
     companies based in N.I. with combined sales of £42m employing
     over 653 people



                             TRINITY VENTURE FUND                                                       VIRIDIAN GROWTH FUND
     John Tracey                            FUND SIZE                           Alan Mawson                                FUND SIZE
     CEO                                    €162.8m                             CHAIRMAN                                   £10m
     Trinity Venture Capital, Beech House   INVESTMENT RANGE                    Clarendon Fund Mangers                     INVESTMENT RANGE
     Beech Hill Office Campus,              €500,000 – €1.5m                    12 Cromac Place                            £50,000 – £300,000
     Clonskeagh , Dublin 4                                                      Belfast, BT7 2JB                           SECTORS
                                            SECTORS
     T. 01 2057700                                                              T. 028 9032 6465
                                            Technology                                                                     Manufacturing or tradeable
     F. 01 2057701                                                              F. 028 9032 6473
                                                                                                                           services in Northern Ireland
     E. info@tvc.com                                                            E. info@clarendon-fm.co.uk
     W. www.tvc.com                                                             W. www.clarendon-fm.co.uk

     NOTES                                                                      NOTES
     Trinity invests in early stage and expanding Irish technology companies.   The fund is managed by Clarendon Fund Managers.
     It is actively seeking new investment opportunities.




24                                                                                                                                                        25
               A GUIDE TO
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                          WESTERN INVESTMENT FUND                                  Other Sources of Funding
     Gillian Buckley                          FUND SIZE
     INVESTMENT MANAGER                       €32m                                 ENTERPRISE IRELAND
     Dillon House                             INVESTMENT RANGE
     Ballaghadereen, Roscommon
                                                                                   The mission of Enterprise Ireland is to accelerate Ireland’s
                                              €63,000 – €317,000                   national and regional development by working with Irish
     T. 094 986 1441
                                              SECTORS
     F. 094 986 1443                                                               companies to develop and compete so that they can grow
                                              All sectors
     E. info@wdc.ie                                                                in world markets.
     W. www.wdc.ie
                                                                                   Glasnevin, Dublin 9
                                                                                   Tel +353 1 808 2000 Fax +353 1 808 2020
     NOTES
     The fund provides seed and venture capital to new and existing                Merrion Hall, Strand Road, Sandymount, Dublin 4
     businesses across a range of sectors in the western region.                   Tel +353 1 206 6000 Fax +353 1 206 6400
     It will also consider MBOs/MBIs. Larger investments are considered
     on a syndicated basis with other private investors.                           Wilton Park House, Wilton Place, Dublin 2
                                                                                   Tel +353 1 808 2000 Fax +353 1 808 2992
     4TH LEVEL VENTURES/ UNIVERSITY SEED FUND LIMITED PARTNERSHIP                  www.enterprise-ireland.com
     Dennis Jennings                           FUND SIZE
     FOUNDER                                   €20m
     The Tower, TCD Enterprise Centre,         INVESTMENT RANGE                    INVEST NORTHERN IRELAND
     Pearse Street, Dublin 2                   €75,000 – €500,000
     T. 01 671 1288                                                                Invest NI is Northern Ireland's economic development agency.
                                               SECTORS
     T. 01 671 1339                                                                Established in 2002 under the Industrial Development Act
                                               Life sciences, material sciences,
     E. dennis.jennings@4thLevelVentures.ie
                                               technology and ICT                  (Northern Ireland) 2002, its objectives are to:
     W. www.4thLevelVentures.ie

                                                                                     • Promote innovation in all its aspects, stimulate higher
     NOTES
     The fund was established to commercialise the business opportunities              levels of R&D and deign and improve knowledge transfer,
     that arise from university research. Investees will be high potential           • Achieve higher levels of growth by indignenous and
     businesses in the seed or early stages of their development arising out           externally-owned businesses,
     of research in Irish third level educational institutions.                      • Promote a more enterprising culture so as to raise
                                                                                       the overall level of business starts,
                                                                                     • Attract high-quality, knowledge based investment
                                                                                       from outside Northern Ireland.
                                                                                   www.investni.com
                                                                                   44-58 May Street
                                                                                   Belfast BT1 4NN
                                                                                   Tel 028 9023 9090 Fax 028 9049 0490



                                                                                   Please note that the authors of the guide have made every effort to
                                                                                   ensure the accuracy of the information contained in this section of the
                                                                                   guide. However we are not in a position to give any guarantee as to
                                                                                   the accuracy of the information.




26                                                                                                                                                           27
           A GUIDE TO
           VENTURE CAPITAL




     Glossary of Terms
     ACQUISITION – The act of one company taking over a              DILUTION – The process by which an investor's ownership
     controlling interest in another company. Investors often look   percentage in a company is reduced by the issue of new shares.
     for companies that are likely acquisition candidates, because
     the acquiring firms are usually willing to pay a premium on     DUE DILIGENCE – The process by which VCs conduct
     the market price for the shares. This may be the most likely    research on the market potential, competition, reference
     exit route for a VC investor.                                   interviews, financial analysis, and technology assessment.
                                                                     Usually divided into commercial, financial, legal and
     ANGEL FINANCIERS – The first individuals to invest              commercial due diligence.
     money in your company. For example, friends, family.
     They do not belong to a professional venture capital firm       EARLY STAGE – A fund investment strategy involving
     and do not have similar monitoring processes. They often        investments in companies to enable product development
     believe in the Entrepreneur more than the actual product.       and initial marketing, manufacturing and sales activities. Early
     This capital is generally used as seed financing.               stage investors can be influential in building a company’s
                                                                     management team and direction. While early stage venture
     ANTI-DILUTION PROTECTION – In the event a company               capital investing involves more risk at the individual deal level
     sells shares in the future at a price lower than what the VC    than later stage venture investing, investors are able to buy
     paid, an adjustment will be made to the % of shares held        company stock at very low prices and these investments may
     by the VCs.                                                     have the ability to produce high returns.
     BOOTSTRAPPING – A means of finding creative ways                EXIT STRATEGY – A fund’s intended method for
     to support a start-up business until it turns profitable.       liquidating its holdings while achieving the maximum
     This method may include negotiating delayed payment to          possible return. These strategies depend on the exit climates
     suppliers and advances from potential partners and customers.   including market conditions and industry trends. Exit
                                                                     strategies can include selling or distributing the portfolio
     BRIDGING FINANCE – Type of financing used to fill an            company’s shares after an initial public offering (IPO), a sale
     anticipated gap between more permanent rounds of capital        of the portfolio company or a recapitalisation.
     investments. Usually structured to enable them to become        (See Acquisition, Initial Public Offering)
     part of future rounds if successfully raised.
                                                                     FUND FOCUS (OR INVESTMENT STAGE) – The
     BURN RATE – The rate at which your company is                   indicated area of specialization of a venture capital fund
     consuming cash, usually expressed on a monthly basis.           usually expressed as Balanced, Seed and Early Stage, Later
     CAPITAL GAINS – The difference between an asset’s               Stage, Mezzanine or Leveraged Buyout (LBO). (See all of the
     purchase price and selling price when the selling price is      stated fund types for further information)
     greater. Capital gains are usually subject to tax which may     FUND SIZE – The total amount of capital committed by the
     be mitigated by careful tax planning.                           investors of a venture capital fund.
     CARRIED INTEREST – The portion of any gains realised            “HOCKEY STICK” – Refers to a financial projection which
     by a Venture Capital Fund to which the fund managers are        starts modestly for a number of months and rapidly
     entitled, generally without having to contribute capital to     accelerates. “How much of a hockey stick is in the plan?”
     the fund. Carried interest payments are customary in the
     venture capital industry to create a significant economic       INVESTMENT PHILOSOPHY – The stated investment
     incentive for venture capital fund managers to achieve          approach or focus of a fund manager.
     capital gains.
                                                                     INITIAL PUBLIC OFFERING (IPO) – The sale or distribution
     CONVERTIBLE SECURITY – A financial security                     of a stock of a portfolio company to the public for the first
     (usually preference shares) that is exchangeable for another    time. IPOs are often an opportunity for the existing investors
     type of security (usually ordinary shares) at a pre-stated      (often venture capitalists) to receive significant returns on their
     price. Convertibles are appropriate for investors who want      original investment. During periods of market downturns or
     higher income, or liquidation preference protection, than is    corrections the opposite is true.
     available from ordinary shares, together with greater
28   appreciation potential than regular bonds offer.                                                                                      29
          A GUIDE TO
          VENTURE CAPITAL




     LATER STAGE – A fund investment strategy involving                 NEW ISSUE – A stock or bond offered to the public for
     financing for the expansion of a company that is producing,        the first time. New issues may be initial public offerings by
     shipping and increasing its sales volume. Later stage funds        previously private companies or additional stock or bond
     often provide the financing to help a company achieve              issues by companies already public. New public offerings
     critical mass in order to position itself for an IPO. Later        are registered with the Securities and Exchange Commission.
     stage investing can have less risk than early stage financing      (See Securities and Exchange Commission and Registration)
     because these companies have already established
     themselves in their market and generally have a management         OPTION POOL – The number of shares set aside for
     team in place. Later stage and Mezzanine level financing are       future issuance to employees of a private company.
     often used interchangeably.                                        PORTFOLIO COMPANIES – Portfolio companies are
     LEAD INVESTOR – Each round of Venture Capital has                  companies in which a given fund has invested.
     a lead investor who negotiates the terms of the deal and           POST-MONEY VALUATION – The valuation of a company
     usually commits to at least 50% of the round.                      immediately after the most recent round of financing.
     LEVERAGED BUYOUT (LBO) – A takeover of a company                   This value is calculated by multiplying the company’s total
     using a combination of equity and borrowed funds (or loans).       number of shares by the share price of the latest financing.
     Generally, the target company’s assets act as the collateral       PREFERENCE SHARES – Form of equity which has rights
     for the loans taken out by the acquiring group. The acquiring      superior to ordinary shares. Most VC deals use preference
     group then repays the loan from the cash flow of the               shares which may convert to ordinary shares upon an IPO
     acquired company. For example, a group of investors may            or Acquisition.
     borrow funds using the assets of the company as collateral
     in order to take over a company. Or the management of the          PRE-MONEY VALUATION – The value of the company
     company may use this vehicle as a means to regain control          before VCs cash goes into the business. VCs use the
     of the company by converting a company from public to              Pre-Money Valuation to determine what % ownership they
     private. In most LBOs, public shareholders receive a               will have in your company.
     premium to the market price of the shares.
                                                                        PRIVATE EQUITY – Private equities are equity securities of
     LIMITED PARTNERSHIPS – An organization comprised of                companies that have not “gone public” (in other words,
     a general partner, who manages a fund, and limited                 companies that have not listed their stock on a public
     partners, who invest money but have limited liability and are      exchange). Private equities are generally illiquid and thought
     not involved with the day-to-day management of the fund.           of as a long-term investment. As they are not listed on an
     In the typical venture capital fund, the general partner           exchange, any investor wishing to sell securities in private
     receives a management fee and a percentage of the profits          companies must find a buyer in the absence of a
     (or carried interest). The limited partners may receive both       marketplace.
     income and capital gains as a return on their investment.
                                                                        PROPRIETARY INFORMATION – Any information
     MANAGEMENT FEE – Compensation for the management                   uniquely possessed by a company which is not generally
     of a venture fund’s activities, paid from the fund to the          available to the public.
     general partner or investment advisor. This compensation
                                                                        PROSPECTUS – A formal written offer to sell securities
     generally includes an annual management fee.
                                                                        that provides an investor with the necessary information
     MANAGEMENT TEAM – The persons who oversee the                      to make an informed decision. A prospectus explains a
     activities of a venture capital fund.                              proposed or existing business enterprise and must disclose any
                                                                        material risks and information according to the securities laws.
     MEZZANINE FINANCING – Refers to the stage of                       A prospectus must be filed with the SEC and be given to all
     venture financing for a company immediately prior to its           potential investors. Companies offering securities, mutual
     IPO. Investors entering in this round have lower risk of loss      funds, and offerings of other investment companies
     than those investors who have invested in an earlier round.        (including Business Development Companies) are required
     Mezzanine level financing can take the structure of                to issue prospectuses describing their history, investment
     preference shares, convertible bonds or subordinated debt          philosophy or objectives, risk factors and financial statements.
     (the level of financing senior to equity and below senior debt).   Investors should carefully read them prior to investing.

30                                                                                                                                         31
           A GUIDE TO
           VENTURE CAPITAL




                                                                             Irish Venture Capital
                                                                             Association Council
     SECONDARY SALE – The sale of private or restricted                      • Desmond Fahey (Chairman)
     holdings in a portfolio company to other investors.
                                                                             • Niall Carroll (Vice-Chairman)
     SEED MONEY – The first round of capital for a start-up
     business. Seed money usually takes the structure of a loan
                                                                             • Michael Donnelly (Secretary)
     or an investment in preferred stock or convertible bonds,
     although sometimes it is common stock. Seed money
     provides start-up companies with the capital required for               • Joe Concannon
     their initial development and growth. Business Angels and
     early-stage venture capital funds often provide seed money.             • Shay Garvey

     STOCK OPTIONS – There are two definitions of stock options.
                                                                             • David Gavagan
     The right to purchase or sell a stock at a specified price
     within a stated period. Options are a popular investment
     medium, offering an opportunity to hedge positions in other             • Michael Murphy
     securities, to speculate on stocks with relatively little investment,
     and to capitalize on changes in the market value of options             • Conor O’Connor
     contracts themselves through a variety of options strategies.
     A widely used form of employee incentive and compensation.              • Karl Schutte
     The employee is given an option to purchase its shares at a
     certain price (at or below the market price at the time the
     option is granted) for a specified period of years.
                                                                               IVCA
     TERM SHEET – Typically a 3-5 page document which
     outlines the fundamental business terms of a Venture                      Regina Breheny (Director General)
     Investment. This document serves to drive at the final                    Tel 087 051 7754
     business agreement of closing the deal. If you receive a
     term sheet from a VC there is a high probability of closing               Email reginabreheny@ivca.ie
     and funding the deal.                                                     Ciara Burrowes (Administrator)
     VENTURE CAPITAL – Money provided by investors to                          IVCA, 3 Rectory Slopes, Bray, Co. Wicklow
     privately held companies with perceived long-term growth                  Tel 01 276 46 47 Fax 01 274 59 15
     potential. Professionally managed venture capital firms                   Email secretary@ivca.ie
     generally are limited partnerships funded by private and
     public pension funds, endowment funds, foundations,
     corporations, wealthy individuals, foreign investors,
     and the venture capitalists themselves.
     WRITE-OFF – The act of changing the value of an asset
     to an expense or a loss. A write-off is used to reduce or
     eliminate the value an asset and reduce profits.
     WRITE-UP/WRITE-DOWN – An upward or downward
     adjustment of the value of an asset. Usually based on events
     affecting the investee company or its securities beneficially
     or detrimentally.




32                                                                                                                         33
            A GUIDE TO
            VENTURE CAPITAL



                                                                Davy Corporate Finance
     Irish Venture                                              Davy House, 49 Dawson Street, Dublin 2
     Capital Association                                        Tel: 01 679 6363 Fax: 01 679 6366
                                                                Contact: Hugh McCutcheon
                                                                E-Mail: hugh.mccutcheon@davy.ie
     ASSOCIATE MEMBERS
                                                                Deloitte & Touche
     AIB Corporate Finance                                      Deloitte & Touche House,
     85 Pembroke Road, Dublin 4                                 Earlsfort Terrace, Dublin 2
     Tel: 01 667 0233 Fax: 01 667 0250                          Tel: 01 417 2200 Fax: 01 417 2300
     Contact: Mon O' Driscoll                                   Contact: David O’Flanagan
     E-Mail: mon.m.o'driscoll@aib.ie                            E-Mail: doflanagan@deloitte.ie

     Aventura Venture Partners                                  Dillon Eustace
     ICELT House/NCI International Financial Services Centre,   Grand Canal House, 1 Upper Grand Canal Street, Dublin 4
     Mayor Street, Dublin 1                                     Tel: 01 667 0022 Fax: 01 667 0042
     Tel: 01 449 8715 Fax: 01 449 8749                          Contact: Lorcan Tiernan
     Contact: Maura Moore                                       E-Mail: lorcan.tiernan@dilloneustace.ie
     E-Mail: mmoore@aventura.ie
                                                                Ernst & Young
     Baker Tilly O’Hare                                         Ernst & Young Building, Harcourt Centre,
     Merchants House, 27/30 Merchants Quay, Dublin 8            Harcourt Street, Dublin 2
     Tel: 01 677 1003 Fax: 01 677 1829                          Tel: 01 475 0555 Fax: 01 475 0594
     Contact: Dick Byrne                                        Contact: Sinead Munnelly
     E-Mail: rbyrne@oha.ie                                      E-Mail: sinead.munnelly@ie.ey.com

     BCM Hanby Wallace                                          EquityNetwork
     88 Harcourt Street, Dublin 2                               The Old Gasworks Business Park
     Tel: 01 418 6900 Fax: 01 418 6805                          Kilmoney Street, Newry, Co. Down BT34 2DE
     Contact: Colin Sainsbury                                   Tel: 048 3083 4151 Fax: 048 3083 4155
     E-Mail: csainsbury@bcmhw.com                               Contact: Gary Stokes
                                                                E-Mail: gary.stokes@intertradeireland.com
     BDO Simpson Xavier
     Bow Lane House. Mercers Street Lower, Dublin 2             Farrell Grant Sparks
     Tel: 01 470 0000 Fax: 01 477 0000                          Molyneux House,
     Contact: Paul Keenan                                       Bride Street, Dublin 8
     E-Mail: pkeenan@bdosx.ie                                   Tel: 01 475 8137 Fax: 01 418 2050
                                                                Contact: Jim Mulqueen
     Eugene F. Collins                                          E-Mail: jmulqueen@fgs.ie
     Temple Chambers, 3 Burlington Road, Dublin 4
     Tel: 01 667 5111 Fax: 01 667 5200                          William Fry
     Contact: Anthony E. Collins                                Fitzwilton House,
     E-Mail: aecollins@efc.ie                                   Wilton Place, Dublin 2
                                                                Tel: 01 639 5000 Fax: 01 639 5333
     Corporate Finance Ireland                                  Contact: Alvin Price
     1 Clonskeagh Square, Clonskeagh, Dublin 14                 E-Mail: aprice@williamfry.ie
     Tel: 01 283 7144 Fax: 01 283 7256
     Contact: Frank Traynor                                     A&L Goodbody
     E- Mail: frank.traynor@allinv.com                          IFSC, North Wall Quay, Dublin 1
                                                                Tel: 01 649 2384 Fax: 01 649 2649
     Arthur Cox Solicitors                                      Contact: John Olden
     Earlsfort Centre, Earlsfort Terrace, Dublin 2              E-Mail: jolden@algoodbody.ie
     Tel: 01 618 0000 Fax: 01 618 0618
     Contact: Kathleen Garrett                                  Goodbody Stockbrokers
     E-Mail: kathleen.garrett@arthurcox.com                     Ballsbridge Park, Dublin 4
                                                                Tel: 01 667 0400 Fax: 01 667 0410
                                                                Contact: Brian O'Kelly
                                                                E-Mail: brian.m.o'kelly@goodbody.ie
34                                                                                                                        35
            A GUIDE TO
            VENTURE CAPITAL




     Grant Thornton Corporate Finance                    Matheson Ormsby Prentice
     24-26 City Quay, Dublin 2                           30 Herbert Street, Dublin 2
     Tel: 01 680 5805 Fax: 01 6805 807                   Tel: 01 619 9000 Fax: 01 619 9010
     Contact: Michael Neary                              Contact: Colm Rafferty
     E-Mail: mneary@gt-irl.com                           E-Mail: colm.rafferty@mop.ie
     Horwath Bastow Charleton                            Mazars
     Chartered Accountants, Marine House,                Block 3, Harcourt Centre, Harcourt Road, Dublin 2
     Clanwilliam Court, Dublin 2                         Tel: 01 449 4400 Fax: 01 475 0030
     Tel: 01 676 0951 Fax: 01 662 5105                   Contact: Martin Cole
     Contact: Justin O’B’Baily                           E-Mail: mcole@mazars.ie
     E-Mail: justin.baily@horbc.ie
                                                         Merrion Corporate Finance
     IBI Corporate Finance                               3rd Floor, Block C Sweepstakes Centre,
     40 Mespil Road, Dublin 4                            Ballsbridge, Dublin 4
     Tel: 01 637 7800 Fax: 01 637 7801                   Tel: 01 240 4100 Fax: 01 240 4101
     Contact: Ulla R Nissen                              Contact: Dan Ennis
     E-Mail: ulla.nissen@ibicf.ie                        E-Mail: dan.ennis@merrion-capital.com

     IIB Bank                                            O'Donnell Sweeney
     Merrion Square, Dublin 2                            Earlsfort Centre, Earlsfort Tce, Dublin 2
     Tel: 01 661 9744 Fax: 01 661 6821                   Tel: 01 664 4200 Fax: 01 664 4300
     Contact: Tom Foley                                  Contact: Tony McGovern
     E-Mail: tom.foley@iib-bank.ie                       E-Mail: tmcgovern@odonnellsweeney.ie

     Investec                                            PricewaterhouseCoopers
     The Harcourt Building, Harcourt Street Dublin 2     George’s Quay, Dublin 2
     Tel: 01 421 0000 Fax: 01 421 0652                   Tel: 01 704 8500 Fax: 01 704 8600
     Contact: Austin Coughlan                            Contact: Aidan Walsh
     E-Mail: austin.coughlan@investec.ie                 E-Mail: aidan.walsh@ie.pwcglobal.com
                                                         PricewaterhouseCoopers Belfast
     Ion Equity
                                                         Waterfront Plaza, 8 Laganbank Road, Belfast BT1 3LR
     Fitzwilton House, Wilton Place, Dublin 2
                                                         Tel: 048 9024 5454 Fax: 048 9041 5600
     Tel: 01 611 0500 Fax: 01 611 0510
                                                         Contact: Iain Lees
     Contact: Neil O’Leary
                                                         E-Mail: iain.f.lees@uk.pwc.com
     E-Mail: neil@ionequity.com
                                                         L K Shields
     KPMG                                                39/40 Upper Mount Street, Dublin 2
     1 Stokes Place, St. Stephen's Green, Dublin 2       Tel: 01 661 0866 Fax: 01 661 0883
     Tel: 01 410 1000 Fax: 01 412 1122                   Contact: Justin McKenna
     Contact: Gerard Flood                               E-Mail: jmckenna@lkshields.ie
     E-Mail: gerard.flood@kpmg
                                                         Ulster Bank Corporate Banking
     McCann Fitzgerald                                   George’s Quay, Dublin 2
     2 Harbourmaster Place,                              Tel: 01 608 4000 Fax: 01 608 4144
     International Financial Services Centre, Dublin 1   Contact: Gervaise McAteer
     Tel: 01 829 0000 Fax: 01 829 0010                   E-Mail: gervaise.mcateer@ulsterbank.com
     Contact: Vanessa Fitzgerald
     E- Mail: vanessa.fitzgerald@mccann-fitzgerald.ie    Whitney Moore & Keller
                                                         Wilton Park House, Wilton Place, Dublin 2
     Mason Hayes & Curran                                Tel: 01 676 0631 Fax: 01 676 6462
     6 Fitzwilliam Square, Dublin 2                      Contact: Mark Ryan
     Tel: 01 614 5000 Fax: 01 614 5001                   E-Mail: mark.ryan@wmk.ie
     Contact: David O'Donnell
     E-Mail: dodonnell@mhc.ie



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           A GUIDE TO
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     The EquityNetwork
     Steering Committee                                                     EquityNetwork
                                                                            EquityNetwork is a major initiative of InterTradeIreland,
     Mary Ainscough         Board Member – InterTradeIreland                the Trade and Business Development Body. InterTradeIreland’s
                            Director of Equality – Dublin City University   mission is to lead the development of the island economy
                                                                            through distinctive knowledge-based interventions which will
     Edward Cartin          Former CEO – QUBIS Ltd
                                                                            produce significant returns in the areas of cross-border trade
     Barry Fitzsimons       Chairman – EquityNetwork                        and business development.
                            Vice-Chairman – InterTradeIreland
                                                                            EQUITYNETWORK OFFERS
                            Senior Director – Cunningham Coates
                                                                            THE FOLLOWING SERVICES:
                                            Stockbrokers
                                                                             • Value added information services to businesses to assist
     Charles Harding        Executive Director
                                                                               in making them 'investor ready'
                            – Corporate Finance & Restructuring Division
                            – Invest Northern Ireland                        • Signposting for businesses seeking equity finance

     Denis Marnane          Manager –                                        • An annual private equity conference
                            Equity/Venture Capital Enterprise Ireland        • An annual all-island seedcorn competition for the best
     Feargal McCormack      Board Member – InterTradeIreland                   business plans on the insland

                            Managing Partner – FPM Chartered                 • An island-wide education programme to raise awareness
                                               Accountants                     of the availability and benefits of using private equity
     Liam Nellis            Chief Executive – InterTradeIreland              • EquityNetwork has supported the development of ‘Halo’
                                                                               business angel networks in Northern Ireland and Ireland.
       .
     Dr Martin Naughton Chairman – InterTradeIreland                           In Northern Ireland through Investment Belfast and in
                            Chairman – Glen Dimplex                            Ireland through Dublin Business Innovation Centre with
                                                                               the collaboration of Enterprise Ireland and the regional BICs.


     The EquityNetwork Executive                                            For full details on all InterTradeIreland’s programmes visit
                                                                            www.intertradeireland.com
      • Catriona Regan
                                                                            InterTradeIreland, The Old Gasworks Business Park,
      • Margaret Hearty                                                     Kilmorey Street, Newry BT34 2DE Co. Down
      • Fergal McCann
                                                                            Tel:       +44 28 3083 4151 (RoI: 048 3083 4151)
      • Gerry Moloney                                                       Fax:       +44 28 3083 4155 (RoI: 048 3083 4155)
      • Gráinne Lennon                                                      Email:     equity@intertradeireland.com
                                                                            Web:       www.intertradeireland.com
      • Anne-Marie Kearns

      • Gary Stokes




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            A GUIDE TO
            VENTURE CAPITAL




     Useful Contacts
     The Irish Venture Capital Association
     www.ivca.ie

     EquityNetwork
     www.intertradeireland.com

     The European Venture Capital Association
     www.evca.com

     The British Venture Capital Association
     www.bvca.co.uk

     The Institute of Directors in Ireland
     www.iodireland.ie

     The Institute of Directors Northern Ireland
     www.iod.com

     The Office of the Director of Corporate Enforcement
     www.odce.ie

     HALO – The Northern Ireland Business Angel Network
     www.haloni.com

     Business Angel Partnership
     www.businessangels.ie



     Acknowledgements
     The authors of the guide would like to acknowledge the contribution
     of the Council of the IVCA, the EquityNetwork Steering Committee and
     the British Venture Capital Association in preparing the Guide.




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