Cork, Dublin and Belfast-based venture capital company Kernel Capital has funds of €190m under management and invested in 35 companies which, between them, have 113 patents. Niall Olden is managing partner.
How would you describe the environment in Ireland for technology-focused firms seeking to raise finance?
I think it’s a phenomenal time for start-ups. If you look at what a start-up needs to get going, the cost base is available on easier and more flexible terms than previously. This is a strong time to set up companies. The first significant change is that many established companies are open to looking at new services. The availability of labour in terms of the cost and nature of contracts are more flexible.
How do Irish technology companies compare internationally in terms of talent, technology and capability?
There has been an interesting argument about whether Irish companies can scale to certain levels but it must be remembered scale is a tremendous outcome. Very often this is not for university companies. Very often these companies can develop an element of a business and not be a business in itself.
We sold Straatum to Lam Research last year and sold Stokes Bio to Life Technologies. Many of these publicly quoted acquiring companies have set up Irish bases as a result of acquiring seed companies we invested in. Another route out can be for seed companies to become catalysts for foreign direct investment focused deeply on companies that create intellectual property.
The Government recently committed a substantial amount of money to the Innovation Fund Ireland. Do you believe this will attract overseas venture capitalists to Ireland?
It can only be beneficial. It is an innovative and creative approach, not just in attracting foreign money into Ireland but also in trying to ensure that larger US and European funds will base themselves in Ireland and create more of an industry.
Are there common mistakes start-ups make when seeking finance or are venture capitalists shrewd enough to see through inexperience and spot breakthrough technologies?
That’s interesting. Very often the more polished the presentations we get from people with Tier 1 consultancy backgrounds for example, the harder they are to break down because they can give a polished presentation on pretty much anything.
I often know when an entrepreneur knows his business. We have no problem investing where we think we can fix the management gap. The biggest mistake companies make when they meet us is failing to do their research on who we are.
Do you think the idea of Ireland being the Silicon Valley of Europe is valid or is it just a pipe dream?
Ireland is going to build up significant clusters. For example, there’s some really strong medical device clusters in the West and tremendous things are happening in universities. The University of Limerick Foundation recently invested in the Bank of Ireland Seed Fund to increase links between us, technology companies and entrepreneurs.
For the size of Ireland we have some very strong clusters in various areas like ICT, life sciences and the green space to make us a significant player.