Start-up competition more about process than prize
INNOVATION PROFILE:InterTrade Ireland’s All-Island Seedcorn Competition is all about taking part
It may sound like a cliche but taking part in InterTradeIreland’s All-Island Seedcorn Competition really is just as important as winning it.
The competition aims to recreate the investment process and over the past 10 years 1,645 companies have entered with a total of €2.49 million in prize money being won.
Even more impressive are the fund-raising results of finalists over the years. All companies who enter the competition automatically become part of the Seedcorn Network – an extensive business community which will help boost the company’s profile, contacts and investment opportunities.
By taking part, previous Seedcorn finalists have attracted €159 million worth of new equity funding.
Seedcorn is the largest business competition for early stage and high growth companies in any sector on any part of the island. It is aimed at companies that have a new equity funding requirement and in 2012 had a record prize fund of €280,000.
It is open to independent ventures in Ireland or Northern Ireland in the seed, start-up or early stages of business development and ideally targeting international markets.
Companies enter by submitting business plans which are initially assessed by a panel of independent entrepreneurs, investors and experts.
Entrants are then subjected to a rigorous interview before judges in competing for the two categories of Best Emerging and Best High Growth Company titles on a regional basis in Connacht and Leinster, Munster, Dublin, and Northern Ireland with the winners in each region in each of the two categories securing an initial €20,000 share of the prize fund for their company.
The regional winners then go forward to the all-island final which was held at Titanic Belfast on November 28th last. Belfast-based Catagen and Wattics from Dublin were named the Best High Growth Company and Best Emerging Company respectively at the event.
As the Best High Growth Company on the island, Catagen won the overall cash prize of €100,000 while Wattics took home a cash prize of €50,000 for its success as the Best Emerging Company.
The competition is part of InterTradeIreland’s overall support package for SMEs as Seedcorn project manager Connor Sweeney explains.
“InterTradeIreland is the only organisation which supports SMEs across the island to develop North/South trade and business development opportunities for the mutual benefit of both economies,” he says.
“Our job in InterTradeIreland is to work with local businesses to help them maximise opportunities across the island and to help put them in the best possible position to beat the global competition once the downturn becomes an upturn. The goal of the Seedcorn competition is to help narrow the gap between the expectations of the venture capital community and those of SMEs. Our aim is to help companies understand what the venture capital funds are looking for when it comes to investments.”
In this sense the competition is more about the process than about the prize money. “In 2012 449 companies registered for the competition and 139 actually entered,” Sweeney says. “But every company got something out of the process. Take this year’s overall winner, for example. Catagen had entered a few years ago and got as far as the regional finals. They took on board what they had learned from that process and came back and blew everyone away. We are very confident that the company will go on to secure further significant investment as a result of their participation in the competition.”
But even those companies who don’t get so far benefit from the process. “Not every company is suitable for equity investment when they enter,” says Sweeney. “But as soon as they register for the competition we get in touch with them and help them prepare their business plan. This involves quite a bit of hand holding and almost weekly contact at times. Of course, not all of them end up entering the competition. But those that do not enter still say the process was invaluable in assisting them with their business plans and preparing them for success in the future.”
The independent validation that came with success in the competition was one of the key benefits for Catagen. The company manufactures a range of rapid testing equipment for the catalytic converter testing market, a critical part of the global automobile industry. This market is driven by stringent environmental protection legislation worldwide, aimed at reducing harmful exhaust emissions.
“Winning the Seedcorn competition was a very important milestone for the company, and yet another independent validation of our carbon reducing technology, business model, and growth trajectory,” says Catagen CEO Dr Andrew Woods. “Having already generated significant sales and profits from our catalyst testing technology, the prize money provides a welcome additional boost to our capital resources.”
Another benefit was the input of the judging panel. “The benefit of the process is that you have people who are completely impartial and have a lot of knowledge of what it takes to build a successful high growth business. We got a number of key pieces of feedback from our first experience of the competition and this has proved invaluable since.”
The money is important, as Wattics chief executive Dr Antonio Ruzzelli points out. “It is great to have a competition like Seedcorn which gives cash,” he says. “Ultimately, that’s what a start-up company needs most. Cash is king, queen and everything else besides at this stage. But the competition also provided us with great visibility to the investor community. We have had four venture capital firms talking to us since we won.”
Wattics has developed revolutionary technology which uses a single smart-meter installed at an organisation’s electricity feed to monitor the power activity of individual appliances, thereby allowing electricity bills to be broken down into detailed operational cost figures. The software recognises and disaggregates the unique power footprints of individual equipment giving users the data to identify and eliminate wastage.
Success on the UK market now beckons for the company. “We are about to sign an agreement with a major UK company who will distribute our products there as well as make an equity investment,” says Ruzzelli. “Competitions like Seedcorn are of great assistance when it comes to getting the attention of the investment community as well as potential partners.”
Irish Venture Capital Association chairman Dr Manus Rogan was a member of the 2012 judging panel and is very impressed by the quality of the finalists. “There were a number of high quality investable opportunities presented,” he says.
“As a venture capital investor I get to see a lot of deals both in Ireland and internationally and the quality of the pitches made at the Seedcorn competition was of a very high standard. The majority of the eight finalists will succeed in raising the capital they are seeking. This is the true acid test of investor readiness. It is not about making the word perfect pitch – that’s called acting. Data sells and substance sells. It comes across in the question and answer session if they have looked at their product from all angles. It is critical that it all adds up. An investor needs to know they will make money out of the deal and this is what they need to be convinced of. The entrepreneurs need to have an unparalleled grasp of detail in terms of their company and the deal.”
And while the finalists will most likely go on to raise the funding they require, Rogan believes all the other entrants to the Seedcorn competition will have gained as well. “It is certainly a very good use of management time to spend a number of months going through a process like this. I strongly support competitions like this that support and promote innovative businesses.”
Connor Sweeney strongly urges early stage companies to consider entering the Seedcorn Competition. “Our objective is to help companies succeed and many of the companies which have gone through the Seedcorn process have been outstandingly successful in terms of attracting investment and achieving their goals. The prize fund is very attractive but the process is even more valuable in the long run.”
For more information on the All-island Seedcorn Competition go to intertradeireland.com