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Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Seed Capital for Growth 5 Oc

Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Seed Capital for Growth 5 October 2011. Background to Enterprise Equity VC. Founded in 1987. Currently two funds under management Regional Fund €22 ml (closed to new investees)

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Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Seed Capital for Growth 5 Oc

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  1. Enterprise Equity Venture CapitalInvestment General Partnerof The AIB Seed Capital FundSeed Capital for Growth5 October 2011

  2. Background to Enterprise Equity VC • Founded in 1987. • Currently two funds under management • Regional Fund €22 ml (closed to new investees) • Co-Manager of AIB Seed Capital Fund €53 million • Invested in 68 companies (>165 transactions) • 5 experienced investment professionals • Offices in Cork, Galway, Dundalk and Dublin • www.enterpriseequity.ie

  3. AIB Seed Capital Fund Background • €53 million fund size (€30m increased in 2009 to €53m). • Fund commenced 1st July 2007 • Enterprise Equity : All investments in Dublin over €250k. All Regional investments irrespective of size • Initial investment size permitted - up to €500,000 • Follow-on investment possible • Maximum investment any one investment - €1.5m • Start up and early stage companies • Normally companies designated as HPSU’s by EI .

  4. AIB Seed Capital Fund • Invested in 38 Investees to-date in 59 separate tranches of Capital • Every €1 invested by AIBSCF has levered an additional €3.30 from other sources • By year end expect to have a portfolio of c 45 investees

  5. What is Venture Capital? • Long-term Funding • Equity Participation • Active Involvement (at non-exec level) • Usually unsecured • If pure equity - no defined repayment • If convertible preference shares – defined repayment • If convertible loan – defined repayment • May be a coupon/(interest rate) with preference shares/convertible loan

  6. Benefits of Venture Capital • Provides significant funding • Leverages other funding • Source of follow-on funding • Raises Credibility • Commercial/Strategic expertise • Guidance/Governance

  7. You need to consider the following. • Dilution • Loss of Autonomy • Valuation • Exit Focus

  8. How we view things Management Team • Calibre • Experience/Expertise • Composition • Commitment • What have they invested

  9. How we view things Market • Size • Growth • Accessibility : Distribution • Competition • Barriers to entry • Value Proposition • Who will buy : be specific

  10. How we view things Product/Technology • Stage of Development • Market Driven • Compelling Reason to buy • Demonstrable Superiority • Market Validation • IP/Barrier to Entry

  11. How we view things Business Model/Financial • Demonstrate Economics of Business • Realistic, Defensible Forecasts • Path to Profitability • Clean balance sheet • Bottom-up – by product /by Customer

  12. The Deal • When • How Much • What Mechanism • What Valuation

  13. Your VC Should • Understand your Business • Understand what you are trying to do • Understand start-ups • Be a person you can work with

  14. Partners Managing Partner Conor O’Connor, FCA, ASIP. Joined EE in 1991. Former Chairman of IVCA and past Board member of EVCA. Represented O’Connor family on Board of Arnotts from which they successfully exited. Galway Office Eric Reed, BA, FCA. Joined EE in 2003. Former Coopers & Lybrand, Digital Equipment, Multis Group, Anecto. Rory Hynes, DPA. Joined EE in 2001. Former Údarás na Gaeltachta. Dublin Office Tom Shinkwin, BComm, MBA, FIB. Joined EE in 2005. Former Morgan Stanley, Ulster Bank (RBS). Cork Office Frank Walsh, BComm, Dip. Comp. Sc., NASD Series 7. Joined EE in 2006. Former Volpe Welty, San Francisco.

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