‘Private equity investment has really come to the fore in the Irish market’


2 Feb 20211.04k Views

Colm Rafferty. Image: Maples Group

Maples Group’s Colm Rafferty discusses the Irish tech start-up ecosystem, the importance of resilience, and the legal mistakes that founders can make.

Colm Rafferty is an M&A and corporate finance lawyer, working with enterprises and both venture and private equity investors. He is an advocate for the indigenous Irish tech sector and active in both the founder and investor communities.

He is a partner and co-head of the corporate practice in the Dublin office of the Maples Group. In addition to helping to build the group’s technology practice, Rafferty has sat on the boards of Coder Dojo and the Fintech and Payments Association of Ireland, which he co-founded.

Rafferty is a member of the steering committee of Scale Ireland, the advocacy body for innovation-driven enterprises in Ireland. He has also been involved in many significant equity financings and M&A transactions involving Irish tech companies for more than two decades.

‘Just because someone built and sold one great business does not make them an oracle – I’d much prefer to learn lessons from someone who had a few failures’
– COLM RAFFERTY

Describe your role and what you do.

In my role, I help some of Ireland’s most innovative companies with their financing and transactional needs while managing delivery of a full range of specialist legal advice from my colleagues in tax, employment, technology, contracts and privacy.

Over the years, I have been lucky enough to work with the likes of Asavie, Movidius, Web Reservations, LearnUpon and AMCS. I enjoy going on a journey with entrepreneurs or investors and seeing their ideas come to fruition and their companies scale and grow.

I also enjoy strategising around negotiations and trying to work out how the parties can converge on an acceptable outcome. This means you have to have a really in-depth understanding of business drivers for both sides in a deal, and recognise when commercial realities start and doing the perfect legal deal needs to stop.

I also spend a lot of my time advising private equity and venture investors with regard to Irish investments. Private equity has really come to the fore in the Irish market and is driving volume. We’re lucky to have some very sophisticated institutional private equity funds established in Ireland, or with teams solely focused on Ireland. Many of the private equity deals we are seeing involve tech companies – so that is hitting two of our sweet spots at the Maples Group.

In your opinion, which areas of science and technology hold the greatest scope for opportunities?

I expect that IoT is going to continue to change the way in which we interact with the physical world. That will result in some interesting experiences as a consumer and as a citizen, which I think will be fascinating.

On the big trend side, I think AI in the context of solving the climate change challenge is something to watch out for. Deploying quantum computing more widely in solving the big problems of our time and our future is something we will hopefully hear more and more about in 2021.

In the meantime, I anticipate that we will continue to see Irish tech companies innovate and scale across multiple sectors, which will hopefully have a positive impact on the ecosystem here.

Are good entrepreneurs born or can they be made?

In my opinion, entrepreneurs are born. However, their success can be enhanced by supports, opportunities, context and ecosystem.

Past a certain point, any enterprise becomes a team effort, so entrepreneurs will benefit from working with experienced people who can support their vision.

What are the qualities of a good founder?
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A strong vision, but with the resilience and flexibility to pivot and an ability to bring people on the journey with them.

What does a successful entrepreneur need to do every day?

For anyone in a leadership role where risk-taking and high stakes are part of the everyday existence, finding a way to manage the impact of all that on you as a person is vital. Being able to say ‘tomorrow is another day to try again’ at the close of a bad day, week, quarter or year is essential.

How you get to that point of resilience is a personal challenge that every entrepreneur will discover in their own time and way and, indeed, in various ways at different points in their journey.

How do you assemble a good team?

Well firstly, it’s so important to recognise that people are our greatest asset – so recruitment and retention of talent is absolutely key. Identifying and retaining top-tier talent in a competitive labour market is critical.

I think it’s also really important that once you’ve attracted the talent, you treat each member of a team as an individual. They all have their personal stories and histories, which means that different things will motivate them, unnerve them, excite them or give them security.

What is the critical ingredient to start-up success?

I don’t think there is a single ingredient but I think hard work, vision, luck, timing and a sufficiently sized addressable market are all critical ingredients. Assembling them all at the right time is the tricky part though.

What are the biggest mistakes that founders make?

I guess I always see the negatives through a legal lens, so the cardinal sins tend to be giving away equity cheaply, leaving equity with a founder who is no longer involved with the business, and allowing any shadow to exist over IP ownership.

What are your views on mentorship and the qualities one should look for in a mentor?

A mentor has to be generous with their time – if they have to be dragged along in the process then that’s of no help to either party. Find one with the experience you need, one that you can learn from and make sure they are actually interested in teaching.

When I have looked for mentors in the past I have always looked for people who have shown resilience and flexibility over time – just because someone built and sold one great business does not make them an oracle. I’d much prefer to learn lessons from someone who had a few failures, saw a couple of different economic cycles and adapted well to change on their journey.

What’s the number-one piece of advice you have for entrepreneurs?

Act with conviction.

Build that conviction by applying an exacting rigour to testing the business opportunity you have identified.

Once that conviction has proven justified at some level, look for opportunities to stage your exit so as to diversify your exposure to that conviction. Conviction alone doesn’t fund a pension!

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