Helper ELF for Limerick start-ups as LIT announces €1m seed fund

Mike Dwane

Reporter:

Mike Dwane

A NEW seed fund for start-up businesses attached to the Limerick Institute of Technology could, in time, help create up to 250 jobs in the Mid-West, college president Dr Maria Hinfelaar has predicted.

A NEW seed fund for start-up businesses attached to the Limerick Institute of Technology could, in time, help create up to 250 jobs in the Mid-West, college president Dr Maria Hinfelaar has predicted.

Around €350,000 is already in the bank for the Enterprise Ladder Fund (ELF) and Dr Hinfelaar was “confident” the fund would reach its target of raising €1 million by the end of 2012.

Announcing the initiative at Moylish this Monday, Finance Minister Michael Noonan thanked those local companies and organisations which have already contributed to a fund that will make available up to €25,000 in seed capital to individual enterprises.

Those donors include Analog Devices, Grant Thornton, Holmes O’Malley Sexton, BDO, Limerick Chamber of Commerce, Ryan Group Holdings and the JP McManus Foundation.

The ELF has charitable status and while the companies can get tax relief on their donations, they don’t expect to turn a profit on their investment in the start-ups.

“The donors are happy to put the money in as a seed fund to see it grow with the companies. But it is not actually an investment for the donors that will bring them additional revenue,” Dr Hinfelaar explained.

She welcomed Government initiatives to provide seed capital to young businesses but said “we cannot just leave it to Government to come up with the answers”.

Minister Noonan said such initiatives helped young SMEs overcome one of the biggest hurdles they face - access to capital.

“We have the highest level of entrepreneurship in Europe after Finland...we have a lot of bright ideas, a lot of very well educated young people who are prepared to turn these ideas into new products but money is always a problem. So this is another part of putting finance in place for the creation of jobs and for the creation of small companies and I’d like to complement LIT and thank all the donors who have contributed,” he said.

Party colleague Deputy Kieran O’Donnell said of the fund that there was an “overwhelming sense of Limerick people doing things for themselves”.

Dr Hinfelaar stressed that there was no easy money available for start-ups and that each would have to undergo a rigorous application process that in most cases included having approval for a bank loan.

“It will be judged on very stringent criteria. They will have to go through a formal application process. They will have to meet with a panel who will review their business plan, review how sound the financials are, how sound the marketing plan is, whether they have really done their homework and how attractive the product or service is. It isn’t going to be a soft fund. It will be based on very sound proposals that have the potential to create jobs and to add value to the economy.”

“We have already created upward of 250 jobs through our enterprise centres. This will have the potential to double that again within the space of a couple of years.”

Seed funding will be made available to start-ups at LIT’s enterprise centres on its Moylish and Tipperary campuses and also at the National Franchise Centre in Limerick.

And LIT is adding to this stable of enterprise centres with the opening of the Irish Fashion Incubator attached to Limerick School of Art and Design and another new centre in Croom in partnership with the Croom Development Agency.

The fund is the brainchild of the LIT Thought Leadership and Advisory Group, which includes Denis Brosnan; John Hartnett, Irish Technology Leadership Group; Grant Thornton’s Gearoid Costelloe; BDO’s Brian McEnery; Revenue chairman Josephine Feehily; Pat McGrath, PM Group; Sean Shine, Accenture; Harry Fehily, Holmes O’Malley Sexton; Dell’s Sean Corkery and Padraig Healy; Dick Meaney, Analog; Bill Doherty, Cook Medical; and Monica Gumbrielle (John Rocha Group).