Bizstartup.ie - Biz Centre

Equity

Equity is the business promoter’s own investment in their business. If a business is to attract funds from external sources, it helps if the owners have made a financial commitment to the business. In particular, financiers of and investors in business generally like to see a business promoter investing their own money in their business. It shows the promoter’s commitment to their business and reduces the overall level of bank debt needed to kick-start the business and to facilitate future growth.

Government funding

Enterprise Ireland is the Government agency responsible for the development and promotion of the business sector in Ireland. Services provided by the agency include financial support/funding to enable businesses to compete and grow, so that they can contribute to regional and national prosperity. The wide range of funding provided by Enterprise Ireland includes:

• Funding for start-up companies – helps high-performing start-ups to meet their financial needs
• Enterprise Stabilisation Fund – available to support viable but vulnerable internationally trading companies
• Research & Development Funding – backs innovation in services, products and processes
• Company Expansion – funding to support a company’s growth through expansion into new products, markets or scales of operation.

More information can be found on Enterprise Ireland’s website.

County and City Enterprise Boards

County and City Enterprise Boards fosterearly stage businesses employing fewer than 10 people in local and regional areas. There are 35 County and City Enterprise Boards across the country offering advice on the steps involved in setting up a business as well as the provision of grants/financial support such as:  Capital Grants, Repayable Grants, Redeemable Preference Share Scheme, Employment Grants and Feasibility Grants. For more information, click here.

Venture Capital

Venture Capital is money invested in innovative enterprises in exchange for astake in the business. The standard time frame of the investment is three to five years, at which stage it is usually expected that there would be an Initial Public Offering,merger, acquisition or a buy-out. Venture Capital gives your business a cash injection to fund expansion, product development or acquisition. Unlike more traditional forms of finance, periodic interest payments are not expected on theinvestment – the payout comes at the end of the term.

Your business can also draw on the expertise and advice of the venture capitalists. This could include commercialand strategic advice, a network of business contacts, an experienced director on your board, or assistance with staff and management development, fundraising or marketing. AIB is a major player in providing seed venture capital for early stage businesses.The AIB Seed Capital Fund (like most venture capital funds owned by large organisations) is managed externally from the bank by a team of professional fund managers. More information is available here

This article appears courtesy of AIB

This article © copyright Allied Irish Banks, p.l.c. 2010. The information does not constitute tax, legal, investment or any other advice by AIB. No representations or warranties are made as to the reliability, accuracy or completeness of the information.