€6m business angel boost for tech entrepreneurs

17 Sep 2009

The all-Ireland Halo Business Angels Network has put together a new venture fund worth more than €6m to target up to 20 new early stage ventures.

The Halo Business Angels Network (HBAN), a new all-island initiative to link early stage entrepreneurs looking for funding with potential angel investors, has today been launched, with ambitious plans to increase the level of funding for new and growing businesses in Ireland.

Led by InterTradeIreland and Enterprise Ireland, HBAN plans to act as “the angel network with a VC approach” by offering guidance to businesses seeking access to expansion funds and to investors looking for pre-screened opportunities. It will also work in partnership with existing angel networks.

HBAN has plans to generate almost €6 million in new angel investment in its first two years of operation and will create 10 new angel investment syndicates. The new investment raised will be used to back up to 20 early stage enterprises. HBAN is calling on angel investors and investment syndicates to come forward, both to support small businesses and the wider economy.

“InterTradeIreland is confident that the creation of HBAN will help bridge the gap in the provision of seed and early stage finance,” said InterTrade Ireland’s Dr Gerard O’Hare.

“At the present time, with many financial institutions reluctant to lend to small business, the services which HBAN provides are not only essential, but critical. Privately backed enterprises will be a key driver of economic recovery, so it’s a matter of national interest to better facilitate investment in early stage companies,” O’Hare said.

Rigorous assessment procedures will be observed to promote the most viable business expansion opportunities. HBAN will focus on companies at an early stage of their development that have established a solid trading record and are seeking about €250,000-500,000 to support further growth.

“HBAN represents a most important contribution to addressing the equity gap for new small firms in Ireland, in particular in relation to the funding of the balance of finance required by the new high potential start-up businesses being supported by Enterprise Ireland,” said Niall O’Donnelan, head of Enterprise Ireland’s Investment Services Division.

“The Investment Services Division of Enterprise Ireland is committed to working in a closely co-operative way with HBAN to achieve our common objectives and is also committed to assisting the development of a strong co-operative business relationship between the business angels network and other complementary initiatives for early stage businesses being supported by Enterprise Ireland such as the joint venture seed capital funds set up by AIB, Bank of Ireland and Enterprise Ireland,” O’Donnelan added.

HBAN will effectively act as a hub between companies and different sources of financing, whether state agencies, business incubation centres or private “angel” investors. HBAN has ambitious targets, in terms of the numbers of businesses to be supported and the level of financing to be generated over the coming year.

Diane Roberts, national director, Halo Business Angels Network, said: “Businesses need reliable access to expansion funding, while angel investors need to be informed about quality deals. To date, there hasn’t been an organisation in Ireland that has successfully acted as a link between these two groups on a continuing basis. This is the gap in the market that we’re seeking to address.”

“We believe that HBAN can play an important role in helping to regenerate the national economy. A major barrier to countering the slump has been the tightening of lending to entrepreneurs. We can help to boost investment in early stage businesses. So we are calling on potential investors to come forward, to take advantage of possible investment opportunities and, in doing so, to help our ongoing economic recovery,” Roberts added.

Roberts, who previously worked in Silicon Valley, said: “We’re in a position to provide support to both groups. For entrepreneurs, we can advise on the most likely sources of funds for the next stage in their planned development. For investors, we can advise on the most appropriate opportunities and can offer due diligence on the firms in which they may be considering investing”.

By John Kennedy

Photo: The Halo Business Angels Network (HBAN) aims to link early stage entrepreneurs looking for funding with potential angel investors.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years