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Venture capital firms reveal Irish interest

More than four out of five venture capital (VC) companies are planning to invest in businesses in Northern Ireland and the Republic in the next quarter, according to a new survey.

Of the investors surveyed at yesterday's Intertrade Ireland venture capital conference in Belfast's Waterfront Hall, 83% of VC firms said they are likely to invest in Northern Ireland and Irish businesses in the next three months.

Other key findings of the poll revealed that: 83% said that the calibre of business opportunities seeking funding is better than two years ago; 77% of investors are cautiously optimistic and 88% said government intervention both now and in the future is critical for the venture capital market.

The survey of the 300 investors and entrepreneurs from across Ireland who attended the conference also indicated that the sectors that offer the greatest investment potential in 2010 are ICT and environmental.

Intertrade Ireland's equity advisor, Bob McGowan-Smyth, said: "High growth, entrepreneurial businesses are essential to our emergence from the recession.

"The gap in seed funding has become more pronounced as venture funds move up the 'food chain' to later stage deals, which has made it even harder for young companies to secure the necessary funds required to get their business off the ground.

"In addition, some of the later stage fund managers are also out raising new funds so that there is not as much money around as there was in recent years."

He added: "It is critical that funding and support is provided for high growth early stage companies to overcome this financial barrier to their development. As the supply of private investment in companies has decreased, the case for sustained government support in this area is greater than ever."

It emerged at the conference that the current sources of equity capital available to businesses, through institutional and the business angel networks on the island, amount to £275m worth of funds.

Kevin Kingston, general manager for corporate and markets at Northern Bank, sponsors of the event, said: "As we start to look beyond the recession, now is the time to grow our private sector and to re-shape our economy. Developing new ideas and enterprising concepts and business models is a key driver for the economy."

Intertrade Ireland, which helped more than 1,000 companies last year, offers a range of supports for early stage companies to ensure that they are better prepared as they embark on raising the early finances.