EI and AIB in €30m seed fund joint venture

2 Jul 2007

The long-standing problem of insufficient seed capital available for promising start-up companies is finally being addressed through a €30m seed fund that will be jointly supported by AIB and Enterprise Ireland.

Each company has committed to investing €15m in the fund and will be equal partners.

The fund, to be known as the AIB Seed Capital Fund, is the first to be established under Enterprise Ireland’s Seed and Venture Scheme 2007 to 2012.

The fund will be managed on behalf of the two investors by Dublin Business Innovation Centre and Enterprise Equity.

Donal Forde, managing director of AIB Bank, said that the AIB Seed Capital Fund initiative is aligned to AIB’s SME (small and medium-sized enterprise) development strategy, which has in the past supported other successful venture capital funds.

“AIB is particularly pleased to partner on an exclusive basis with Enterprise Ireland in this initiative,” Forde explained.

“The overarching objective of the fund is to support entrepreneurship and provide risk capital to help develop competitive internationally oriented businesses in Ireland,” Forde added.

The average initial investment to be made by the fund will be in the order of €250,000 but smaller investments of €100,000 will also be evaluated.

The fund will have an economic life of seven years and it is envisaged it will make in the region of 50 to 60 investments in early stage-businesses, particularly high-potential start-ups in knowledge-intensive sectors.

“The AIB Seed Capital Fund announced today as part of Enterprise Ireland’s €175m Seed and Venture Capital Scheme 2007-2012 will be a vital contributor to the development of a commercially viable and sustainable seed and venture capital industry in Ireland,” said Frank Ryan, chief executive of Enterprise Ireland.

William O’Brien, manager of the venture capital department at Enterprise Ireland, told siliconrepublic.com that Enterprise Ireland is in talks with at least two other institutions about creating similar seed capital schemes.

“We are talking to one or two others interested in that area. The nature of seed capital is high risk but it can give you high returns if you get in with the right company at an early stage,” O’Brien explained.

By John Kennedy

Pictured – Minister for Enterprise, Trade and Employment Micheal Martin TD; Frank Ryan, chief executive of Enterprise Ireland; and Donal Forde, managing director of AIB Bank