Take it for granted: how to get your hands on Government start-up funding
Ireland has plenty of money for start-ups which can get past the bureaucracy, say the authors of a new guide
There to be used
That said, entrepreneurs should not feel guilty about applying for and availing of grants, according to Scale Front chief executive Sean Blanchfield. “Grants are there to be used by entrepreneurs, who will be truly responsible for bringing wealth and employment back to Ireland.”
Connor says cash strapped start-ups often use equity as a means to get by, when they could be using grants. Getting equity investors can lead to terrible problems when you realise the person is the wrong fit.
“Do everything you can to get to know investors before agreeing to investment; ideally they should add value in addition to the capital, but at the very least they should not prove difficult,” Bebo co-founder Michael Birch says.
He says entrepreneurs should ask venture capitalists about other investments they’ve made and reach out to the CEOs/founders of those companies to understand what role they played post investment. “If you can arrange to speak with them on the phone it’s surprising how honest they’ll be.”
And if anyone should know about start-ups, it’s Birch. He sold the online social networking site Bebo to AOL in March 2008 for $850 million.
Bill Liao, an Australian entrepreneur and venture partner with SOSventures, says the days when it really mattered that you had a big name angel on your board are gone.
“People only really care about traction, and real traction is expressed in cash from happy customers, and so real traction is accretive; investment is always dilutive.”
“Also, many angels and other bodies do not follow on their investments if you need to raise growth capital at a later stage, and so they stop delivering value after one investment. This means that subsequent investors can be put off because the original investors are not stepping up.”
However, the CoderDojo co-founder warns that start-ups are also a dangerous game with huge risks and so are not suitable for people who need huge rewards or have large mortgages.
“If you are joining a start-up to get rich, then 95 times out of 100 you are delusional. Start-ups are hugely rewarding and super stressful, and no one really knows who generated the most value at the end, so as long as you have enough cash to keep the lights on and to keep everyone from eating cat food, that is all the remuneration a cash-strapped staff member in a start-up should reasonably expect.”
Aspiring entrepreneurs can get the How to get €100k Free off the Government ebook by tweeting @bullethq. “We thought it would be a good idea to use the social network as a currency.”