Ireland’s venture capitalists warn that the threats to Ireland’s FDI model from the Trump administration emphasise the need to back SMEs as never before.
The latest threats to Ireland’s traditional foreign direct investment (FDI) model, in particularly our pharma industries, emphasis more than ever the need to support indigenous small and medium-sized enterprises (SMEs).
That’s the warning from the chair of the Irish Venture Capital Association (IVCA) and general partner of Atlantic Bridge, Gerry Maguire, who was speaking at the association’s annual dinner.
“The next decade will determine whether Ireland continues to be a global leader in innovation – or risks losing its most promising companies to better-funded ecosystems abroad”
The industry organisation, which is celebrating its 40th anniversary this year, plays a critical role in helping promising young Irish businesses to scale through investment.
Capital must match ambition
Nearly €1.5bn was invested in 217 Irish venture backed businesses last year which also saw multiple funding rounds of over €100m, but Maguire warned: “We lack the private capital base required to fully sustain this growth.
“The potential for damaging trade wars, shifting tax policies and increasing global competition mean that Ireland’s FDI model is under pressure as never before,” Maguire warned.
“It is more important than ever to support indigenous technology SMEs and to scale companies, to ensure that they have the funding needed to compete internationally and drive long-term economic resilience.”
Despite major challenges presented by the current geopolitical environment, Maguire said that Ireland had major opportunities, especially in deep tech and AI; climate and energy transition; life sciences and biotech.
But he added that while Ireland had been well served by public capital through EI (Enterprise Ireland), ISIF (Ireland Strategic Investment Fund) and EIF (European Investment Fund), “the funding gap for scaling companies represents a major structural weakness in our investment landscape.”
He said that Ireland needed to attract more private funding and position venture capital as an essential asset class for institutional investors, pension funds, and family offices. He added that Ireland was falling behind other countries which provided stronger incentives for investors and founders. In addition, Ireland must create larger, growth-stage funds to “ensure that the country’s best companies can scale globally.”
Maguire said that Ireland’s economy has been transformed since the IVCA was launched in January 1985 by then Taoiseach, Dr Garrett Fitzgerald.
But he warned: “The next decade will determine whether Ireland continues to be a global leader in innovation – or risks losing its most promising companies to better-funded ecosystems abroad. We have the talent and ambition. Now, we must ensure we have the capital to match.”
Main image at top: IVCA chair Gerry Maguire
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