Urgent need for risk takers
Given that many of our most successful companies are now competing in the global marketplace, it is perhaps no surprise that Northern Irish companies with strong growth and high export potential such as Vita Liberata are increasingly attracting the attention of venture capital (VC) funds from Great Britain and Ireland, particularly those funds who like to invest in the £0.5m to £5m range.
It is widely acknowledged that Northern Ireland has for some time lagged far behind other regions of the UK and Ireland in terms of the size and scale of our local VC market.
The starkest contrast may be found when comparing the size of the current Government-backed seed and venture capital investment funds in Northern Ireland and those in Ireland.
A total of £17m was committed by Invest NI, comprising the £10m NISPO fund and the £7m Co-Investment fund, with a further £10m commitment from the agency to establish the Northern Ireland Development Fund.
Under the 2007-2012 Seed and Venture Capital Scheme, Enterprise Ireland has committed to investing £144m and in the period up to December 2010 nine funds had been launched with an Enterprise Ireland commitment of £125m.
Until there is a significant increase in the provision of locally based VC funding above seed investment level, our most promising companies will have to actively engage with VC funders from outside Northern Ireland to maximise their chances of growth.
However, the time and cost commitment in itself can be a barrier to success for busy entrepreneurs and early stage companies whose finances are already stretched.
Recent events like the Intertrade Ireland Venture Capital Conference and the Insider Business of Finance Conference (both hosted in Belfast) provide Northern Ireland's entrepreneurs, companies and corporate finance professionals with an excellent opportunity to access a wide range of VC funds from Great Britain and Ireland, all actively looking to do business here.
Many of the VC funds who travelled to these events will also be represented at the NISP Connect VC Forum later this year, providing a unique opportunity for emerging companies to showcase themselves to a captive audience of active VC funds.
These events are a great way for companies to make contacts and to learn more about VC funding and how the process works, but until the local VC market is significantly strengthened, much more has to be done by both the public sector and the private sector corporate finance communities to encourage and foster links with VC funds in Great Britain and Ireland as a complement to our local VC market.
Vicky Dummigan is a partner in the corporate department of Tughans and advised Vita Liberata in its deal with Broadlake Capital