Companies conducting
business in Ireland benefit from several sources of financing, the Irish
Government being the largest (see R&D).
However, private venture capital, initial public offerings (IPOs), and
foreign direct investment (FDI) also provide additional financing sources for
IT purposes.
Investment by the Irish
venture capital industry in the indigenous high tech sector is holding up well
relative to the region. According to the third Annual Report of the Irish
Venture Capital Association (IVCA), of the Euro 124 million invested by IVCA
members to the year-end December 31, 2001, 77% (or Euro 95.3 million) went to
the high tech sector. Of the total invested in high tech, 72% (or Euro 68.6
million) went to software companies.
While the overall amounts are down relative to 2000, the decrease in
investment by IVCA members in 2001 is consistent with international trends as a
result of the global slowdown.
§
The IVCA Annual Report
finds that over 100 companies (109) received investment from IVCA members in
2001
§
Over 500 (511)
companies have received over Euro 600 million in venture capital funding since
1997
§
36% (Euro 45 million)
of the total capital invested in 2001 was invested in companies receiving
venture capital for the first time
§
Startup companies
represented 54% of the companies receiving investment in 2001
§
In 2001 Irish venture
capital companies invested 83% of their funds in companies which employ less
than 200 people[1]
The Irish Stock Exchange has
a special market, ITEQ,
designed for the growing number of technology companies in Ireland. ITEQ provides a sector-based and
geographical focus for Irish and European investors in Irish technology,
particularly through its own ITEQ index.
ITEQ allows for trading in depository receipts on the Irish market.
Trading in American Depository Receipts has the added advantage of being exempt
from Irish stamp duty. Through this new
market, the Exchange aims to attract Irish technology companies who are
considering IPO options in the short to medium term.[2]
IDA Ireland is an Irish
Investment and Development agency with government responsibility for securing
new investment from overseas in manufacturing and international services
sectors. According to IDA Ireland, over 1,200 companies have bases in Ireland,
many with the objective to serve the European market. These companies are
involved in a range of activities from manufacturing to e-Business activities
in sectors such as electronics, software, pharmaceuticals, healthcare,
financial and international services.[3]
Multinational companies such
as Dell, AOL, IBM, Netscape, Siemens and Oracle (all listed in NYSE) have
chosen Ireland for e-Business related activities due to the country’s
combination of skilled workforce, low corporate tax rate, and young and
well-educated populations.