A return once again to the whole idea of making Ireland more like Silicon Valley. If we didn’t have Enterprise Ireland helping out companies and we didn’t have the County Enterprise Boards doing the same with feasiblity grants and so forth, would this be better in the long run? Would it make companies be more aggressive at turning a buck faster, would it allow companies to concentrate more on their product developments instead of spending their time filling out forms and drawing down scraps and attending courses that are completely useless to them?
I’ve read a lot of blog posts and heard a lot of private commentary about how time consuming Enterprise Ireland funding is and whether it is worth it in the end. I’ve also seen the attitude of some (and experienced it with some Paddy’s Valley applicants) that E.I. is some kind of piggy bank and should hand over cash without question when the paw is stuck out. Why the hell should E.I. pay for people to go to Silicon Valley just because it’s a good idea?
However, if E.I. was removed from the picture, would angels and smaller fund V.C.s move into the vacuum? Would you have more VCs in the market then and would there be more of a chance of good companies getting funding insted of ok companies who know how to deal with red tape? Or would everything here just die? In an odd twist it seems the imminent success of the Collison brothers and Auctomatic is being used to slag off E.I. – The lads did not get turned down by E.I. as some have misinterpreted, they just decided to follow a different path for funding (and glory 🙂 ) and went off and got Y Combinator funding in the States.
With less of a safety net with E.I. and Enterprise Boards, would this be better or worse?
[…] Start ups and entrepreneurialism I’ve just read an interesting post on Damien Mulley asking whether or not Enterprise Ireland are helpful in fostering start-ups in Ireland in the long run. I think they probably are a necessary part of the process but may not be suitable for every type of venture. By going with enterprise Ireland entrepreneurs are certainly exposing themselves to a greater amount of monitoring activity by EI, however this is not necessarily a bad thing. By having a set of metrics or criteria to conform to an entrepreneur might retain a better sense of realism that might abandon him if unchecked. […]
I don’t like some of the frameworks used by State-run grant-aided enterprise development programmes in Ireland. It’s a personal perspective, one grounded in several runs around the funding pots. Specifically, I do not like knowing that you have to set aside piles of money that could go to better use in order to pay for accountants. If you start drawing down any meaningful flow of cash from a government agency, you cannot do your own company reports. Because you have to pay someone else to do that job, you have to set aside your own development time for care and feeding of the accountant. That’s an administrative burden few calculate when waddling up for funding.
I also don’t like the cookie cutter approach used across Ireland involving low-rent or sunk cost office space. In most places, qualifying for a grant means you are politely coerced to work inside a third level institution or you’re expected to occupy space in a cluster that does little to increase your prospects for business-to-business transactions. Said another way, part of your grant bleeds off to pay rent back to the enterprise agency itself or it’s politely carved up to pay a rate to a third level institution that already has a capital grant for buildings.
I’ve got several other gripes that come on the heels of working inside three start-ups in Ireland. I’ve shared those gripes in sessions at Barcamps and have no problems expressing them in civilised tones to anyone above middle management inside Enterprise Ireland.
I’m not denying that any cash flow from the hand of the Exchequer is helpful when you are cutting your own cloth. It’s just that all the cash coming from enterprise agencies comes with administrative burdens that appear to actually divert the energy of young companies from important steps they need to take to bring products to new markets.
Damien
We’ve never received any funding from either EI or the CEBs. We did look at it, but it was easier to raise the funds through increased sales and ultimately I’m a lot happier that we don’t have to rely on a 3rd party for funding or answer to them
Michele
Presumably you need to spend money on accountants and other consultants to help you write business plans for VCs etc.
Is one of the problems here that people assume they no no such help or expertise in preparing EI grant applications??
The accountant certifications are essential when drawing down money for salaries, high potential start-up cash burn lines, as well as for submitting company reports. If you don’t follow the trail to the accountant’s door, you get visited more often in your office by a helpful consultant from the enterprise agency and that eats up just as much time as dealing with the accountant.
I’ve mowed through and got three enterprise grants. For the most part, I used boilerplates and fed pots of coffee to people inside Shannon or EI to comb through the applications. They sailed through okay. It’s what happens after the money is drawn down. Those fixed time and money expenses are real issues for the time-compressed entrepreneur.
[…] others have written on this topic, the support for tech startups and small business is negligible and something that other opposition parties can make hay out of. […]