Practicalities of funding your Scale-Up
Event review by MBAAI President Alacoque McMenamin
Ciaran Healy of Matheson gave us an overview of Venture Capital in Matterson on Thursday 15th June. He outlined the framework for Venture Capital versus Private Equity. Venture Capital funds general invest for an equity minority stake normally under 20%. The investment is typically unsecured, and any return is dependent on growth or profitability. While Private Equity investors on the other hand typically seek a controlling stake in the business, an exit within five to seven years and are almost always debt finance. He also outlined when investors invest in the company lifecycle:
Start-up - Friends, family and fools
Expansion - Venture Funds
Growth - Private Equity
Decline - Strategic investor
He also informed us that the total Venture Capital Funds raised by Irish SMEs in 2017 was €994m and increase of 73% since 2012. 28% of these funds in 2017 were raised by the Software industry and 23% by Life Sciences. His advice was “Don’t always take the first cheque - ensure you have the right partner.” Getting the right legal advice and ensuring that you have the right shareholder agreements in place is pivotal.
Karl Cleere then gave us a presentation on Broadlake, a very different investor. They have invested in only 6 companies in the last 5 years and they focus on companies with a turnover of €10m, with 50% of that turnover outside the island of Ireland. Three of those companies were EY Entrepreneur finalists. They look for ambitious teams, who are brand and cultured focused, who are out-innovating the bigger players in the market. They have had 2 successful exists. Their moto is “to help people win”. Again, the advice was “Don’t always take the first cheque".
Thank you for Matheson for hosting this very informative evening.
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