Scale Ireland welcomes the launch of the new PreSeed Start Fund by Enterprise Ireland, describing it as ‘’a significant move for early stage founders’’.
The PreSeed Start Fund replaces the Competitive Start Fund, which provided €50,000 for 10% ordinary share capital and was widely viewed by some in the sector as an inappropriate valuation of a business in today’s market.
The independent representative body for start-ups, Scale Ireland consulted and engaged with Enterprise Ireland on the changes, and welcomes the terms and conditions of the new PreSeed Start Fund.
The Fund will take the form of a convertible loan note with two options - €50,000, and also €100,000 (paid in two tranches subject to key targets being met). A 3% interest rate and a 5 year term will apply, with a conversion discount of 20%. It is also planned to increase the number of successful applicants under the new scheme.
The Chair of Scale Ireland Brian Caulfield said “We welcome the new PreSeed Start Fund because the conditions are very attractive and beneficial for early stage founders. We believe this is the right approach. We also want to acknowledge that when it was first launched, the Competitive Start Fund played an important role, however in recent times, it has proved less attractive to many founders”.
The CEO of Scale Ireland, Martina Fitzgerald also welcomed the move: ‘‘This is a significant and strategic decision by Enterprise Ireland and we want to acknowledge the consultation between
Leo Clancy and Enterprise Ireland with us on this key funding programme for early stage founders. It sends a very strong signal to the sector that founders’ views and feedback are important.’’
There are currently more than 2,200 indigenous tech start-up and scale-up companies employing almost 55,000 people around the country. For each additional job in the average high-tech firm, five additional jobs are created outside that firm in the local community.