A new business angels fund will double the capacity for investment in Irish internationally trading SMEs, with amounts ranging from €250,000 to €4m, following an agreement between the European Investment Fund and Enterprise Ireland to launch a scheme worth €20m over four years.
The European Angels Fund Ireland will co-invest with approved Irish business angels in Irish SMEs trading overseas, with investments ranging from €250,000 to €4m. In recent years, business angels have become an increasingly important part of funding for Irish SMEs and in 2015, Halo Business Angel Network members made 40 investments totalling €8.8m in Irish start-up and early-stage companies.
Enterprise Ireland CEO Julie Sinnamon (pictured) said: “The funding ecosystem in Ireland has seen the range of supports increase exponentially in recent years, helping companies accelerate growth and increase business at home and overseas. I warmly welcome the launch of this new co-investment initiative between the European Angels Fund and Enterprise Ireland, which will provide investor expertise and ensure that Irish companies can access the funding necessary to expand and grow exports over the next 10 years.”
EIF CEO Pier Luigi Gilbert added: “Business angels will benefit from significant financial support for their investment activity while maintaining maximum freedom to operate. Through the Fund, business angels can draw on the expertise and network of the EIF. We are pleased that another funding source can be made available in Ireland for the benefit of Irish businesses.”
Enterprise minister Mary Mitchell O' Connor said: “This new fund will enhance the financing environment further in order to develop and grow businesses which will create employment. I want to see a broad spectrum of finance options, matching the different stages of an enterprise’s development, and business angels play a key role in supporting entrepreneurial performance.”
In Association with
The fund is now up and running and active and experienced business angels can apply at the EIF website.
Background
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment.
EAF Ireland is a co-investment instrument and therefore provides financing to Business Angels (BAs) and other non-institutional investors (NIIs) wanting to invest into internationally oriented small and medium-sized enterprises (SMEs), most of the funds are intended for investments in the SMEs based or active in Ireland but certain percentage can be invested in foreign firms.
EAF Ireland will be managed by EIF in cooperation with Drew O’Sullivan (drew.osullivan@serafina.org) as a local sub-advisor. EAF Ireland is part of the pan-European initiative European Angels Fund (EAF) run by EIF.
The European Angels Fund agrees co-investment framework agreements (CFAs) granting a predefined amount of equity for co-investments upfront to each Business Angel for future investments over a 10-year period.
All investment and divestment decisions will be taken by the Business Angels exclusively without any intervention from EAF Ireland and will be matched on a pari-passu basis, i.e. by the same amount by the European Angels Fund.
The European Angels fund does not pay a fee to the Business Angel but shares investment-related costs on a pro-rata basis. 20% carry payments from the European Angels Fund to the Business Angel increase even further the upsides of the investments for the latter.
The Halo Business Angel Network (HBAN) is an umbrella group responsible for the development of business angel activity on the island of Ireland. HBAN is actively working to increase the number of angel investors and syndicates who are interested in investing in early stage technology, MedTech, AgriTech & food companies and supporting the early stage entrepreneurial community. HBAN is a joint initiative of Enterprise Ireland and InterTrade Ireland.
