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August 10, 2007
VC Scarcity For Irish Tech
Ireland's ability to attract VC investment has been waning in recent months based on what we've seen in reports from the likes of Tornado Insider and VentureOne. The Irish Venture Capital Association (IVCA) confirms the trend in a recent statement noting that Irish technology companies raised €62.6m in the first half of 2007, down from €83.7M raised in the same period last year.
It is worth noting, however, that the number of deals actually increased, suggesting there's more capital to be ..
It is worth noting, however, that the number of deals actually increased, suggesting there's more capital to be raised as these ventures start to grow. In fact the IVCA is hosting an event for entrepreneurs this Fall with local venture funds, such as ACT Venture Capital and Delta Partners on hand as speakers.
Slowing the market down is the scarcity local venture funds. The local VC sector has yet to raise a lot of new money post-bubble.
As we've noted before, raising VC funds in Europe is a tough sell but things might change in Ireland if more follow the path of Trinity, the investment fund that recently floated portfolio company Norkom Technologies in London. This summer it took the unusual step of raising €50M of new money on the stock exchange. SiliconRepublic.com: Trinity raises €50m in IEX and AIM flotation
If you are asking yourself how just one or two small sized VC funds can move the stats, then the answer is that the tech VC market in Europe is so thinly funded that, especially in smaller markets in like Switzerland and Ireland, even a small amount of new money can move the needle on the dealometer.
At the risk of oversimplifying things, our observations suggest that with new money local VCs are able to source deals again in their markets where there is pent up demand. The effect of the new money is greater because they bring in co-investors, often from abroad, to boost the size of the deals and fund a greater number of new ventures. In the meantime international VCs are picking up some of the slack.
Posted on August 10, 2007 05:52 AM | Posted to Being European | Permalink
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