We need Angel Investors not Venture Capitalists

Yesterday's Sunday Busines Post reported on the government's plan to invest "€200 million in Irish venture capital firms to fund emerging entrepreneurs and kick-start the development of new companies". Damien Mulley says "there should surely be money for smaller investments too", Bernie Goldbach thinks its "not helpful to start-ups that have to manage the employment prospects of their new hires in good faith" and Joe Drumgoole writes a thorough analysis -

"... nobody in the irish VC community is going to pay you 50-100k to develop your idea, investigate the market, learn about your customers etc. This is the gap that EI needs to fill with its 200m, not subsidising successful VCs with money over which it looses control the day after it is invested."

Absolutely correct. I was speaking with an Angel Investor (an American) at the Web2Ireland conference in Dublin two weeks ago and it was clear that we still have a large transition to make here in terms of achieving an angel investment culture.

Comments

[Justin Mason]

Agreed!

My pet theory is that the angel investment culture is now the #1 thing that Silicon Valley has, as an "edge" over other places like Ireland.

[Fergus Burns]

SOme of the 200m would go a long way to fund a meaningful "Startup School" :-)

[Keith Gaughan]

More to the point, isn't subsidising VCs kind of missing the point of what they do?

[walter]

keith nails it.

[Richard Rodger]

The big old problem we have over here is that the returns on property investment are much easier to realise. Why bother with angel investing when you can flip new developments?

[James Corbett]

Agreed Richard, people are like sheep and just stick to what they know :(

Great point Keith, I hadn't thought of it that way.

[Keith Gaughan]

One of the problems with angel investors in Ireland that the US doesn't have is that in many of the industries young entrepreneurs here are in, we don't have a long enough history in those to have weathy investors with an interest, professional or otherwise, to understand and invest in them.

I think the big differenciator between a VC and an angel investor isn't that a VC is a professionally managed fund but that an angel investor has an interest and understanding of the business they're investing in whereas the VC doesn't necessarily. Angel investment in the US works because they've had those kinds of industries long enough to the necessary industry veterans to produce angel investment.

So the question become, if we can't produce a sufficient quantity of angel investment in Irish businesses by Irish people, what can we do about attracting foreign angel investment?

[Tamara Jackson]

I am seeking to work with Angel & private Investors from Ireland who are interested in the Entertainment Industry I own and operate an Entertainment Production Company with over 35+ years experience in the business. I have worked in Ireland before as well as during 1996 I was there in Ireland writing Proposals for those who were harmed in the Potato Famine. I would truly like to bring Entertainment over to Ireland to match the facets of USA's Hollywood and Broadway. I am seeking not start up capital, but expansion international capital we have been operating in the USA and Canada for the past 18 years and we are ready to come over to Ireland as we did 10 years ago in Scotland with quite a few movies and producing a famous Scottish Director. I am seeking 375K -1.5M USD. Therefore we can start the 09/08 -09/11 seasons over in Ireland.