WDC concern over VC fund
The Western Development Commission (WDC) has expressed concern about the future of its venture capital fund, after An Bord Snip Nua recently recommended that the organisation be merged with Enterprise Ireland.
The WDC manages the Western Investment Fund which, to date, has invested €33.7 million in 82 high tech start-up companies west of the Shannon. It has also succeeded in leveraging an additional €130million in matching funding from private sector investors.
Western Investment Fund (WIF) manager Gillian Buckley said the WDC had received no indication yet as to the fate of the fund, should the body be rolled up into Enterprise Ireland.
However, she said the WDC had been awarded European Commission State aid approval to manage the fund, which is ring-fenced for companies operating in the seven counties west of the Shannon, and that that there maybe issues should the fund be transferred to another organisation.
Buckleys aid the fund was established to address a ‘‘market failure’’, namely that private investors allocated a disproportionate amount of money to start-ups in other regions. When the fund was first approved in 2000, the proportion of venture capital money going west of the Shannon was 3 per cent.
This has since risen to 10 per cent, but was far off the 20 per cent the western region should be getting on a proportional basis, which highlighted the continuing need for such a fund, said Buckley.
While the fund was approved in 2000, Buckley said it began making investments in 2003. The fund was set up to operate on a commercial basis, and profits made from successful investments are re-invested in new businesses.
To date, the WIF has revolved €5.2 million, and Buckleys aid this was likely to accelerate as the fund matures over a seven to ten-year horizon.
