Republic's tech firms turn to UK in search for funding
Irish tech start-ups are facing a financial crunch that is pushing some companies to set up operations in the UK to benefit from its more benign funding regime, according to the new chairman of the Irish Venture Capital Association.
Brian Caulfield has warned that Irish tech start-ups are facing a "tough" period ahead for financing, due to cyclical issues with Irish venture funds' own fundraising schedule.
"In the short term in Ireland it's going to be pretty tough for startups and companies to raise either seed funding or Series A funding of between €2m (£1.4m) and €5m (£3.6m)," said Mr Caulfield.
He said that some start-ups are already starting to seek alternative funding under the UK's Enterprise Investment Scheme, which financiers say is attractive to investors.
"In some cases, the companies are staying here but making themselves qualify for EIS by doing parts of their business in the UK," he said.
"In other cases, they're actually moving to the UK.
"Right now it's incredibly easy to raise those kinds of funds in the UK."
In the Republic, the biggest issue is that almost all of the seed funds and the series A funds are in fundraising mode at the moment, he said.
"It's going to remain a very tough fundraising environment here for a while."
Mr Caulfield said that firms seeking amounts of over €10m (£7m) would continue to have alternative access to venture funding sources abroad.
However, he said that it was the smaller start-ups, which make up the majority of funding deals in Ireland, which are likely to be affected the most.
"I would say we're already in a crunch for Series A funding and that a seed crunch is coming," he said.