Eight out of 10 Irish start-ups are struggling to find capital, survey finds

28 Jan 2022

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Nearly half of the founders and chief executives surveyed by Scale Ireland also said they lost staff over the last 12 months.

Finding funding sources, hiring employees and retaining them have been identified as the leading problems facing Irish start-ups, according to a Scale Ireland survey of 230 start-up founders and chief executives.

Nearly eight out of 10 Irish start-ups are finding it difficult to raise capital and more than four in 10 are finding it difficult to retain staff, the State of Startups survey reported, highlighting the need for supports to keep Ireland’s start-up ecosystem thriving.

Scale Ireland, a not-for-profit body that represents Irish start-ups and scale-ups, said that a vast majority of survey respondents had not applied for Government supports such as the Employment Incentive Investment scheme, R&D tax credits or the Key Employee Engagement Programme share option scheme.

‘At a time when the sector is experiencing significant growth, it should not be held back. The ambition and momentum of start-ups must now be matched by increased State support’

Brian Caulfield, chair of Scale Ireland, said that the survey results are “further evidence of the challenges facing founders to retain staff” with four out of 10 founders and CEOs saying they lost staff over the last 12 months.

“This is a pressing issue that needs to be urgently addressed. It is also critical that we examine why many founders are not availing of State incentive schemes. We have to ensure they are user-friendly’,” he said.

More than 70pc of start-ups in Ireland reported that they do not have a sustainability or climate plan – with nearly half citing it as ‘not a priority’. The top priority for 47.2pc of start-ups is raising capital, but 79pc of respondents said they are finding this ‘difficult’ or ‘extremely difficult’.

“At a time when the sector is experiencing significant growth, it should not be held back. The ambition and momentum of start-ups must now be matched by increased State support. With this support, indigenous start-ups will create more employment and grow globally,” said Martina Fitzgerald, chief executive of Scale Ireland.

The survey comes ahead of a regional start-up summit first announced in November. The first such summit by Scale Ireland, it will be launched today (28 January) by Taoiseach Micheál Martin, TD, and will include leading Irish start-ups such as Fenergo and Teamwork.

It will be an online event from Cork in partnership with Microsoft’s support programme for start-ups. Anne Sheehan, Microsoft Ireland’s general manager, said that the Scale Ireland survey has provided “important insights for stakeholders across all sectors” in Ireland.

“We need to nurture the ecosystems and form partnerships to create the best financial and policy supports, skills programmes and technology solutions to support Irish start-ups to secure and grow their businesses. This will ultimately ensure we develop the environment for the next generation of start-ups to succeed in the Irish economy,” she said.

The regional summit also has support from Irish VC firm Atlantic Bridge, Irish executive recruitment firm Hadfield Green and Cork-based digital hub Republic of Work. According to Scale Ireland, there are currently more than 2,000 indigenous tech start-up and scale-up companies employing more than 47,000 people in Ireland.

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Vish Gain is a journalist with Silicon Republic