INTERTRADE IRELAND:The seedcorn initiative is a great way to help companies across Ireland uncover investment

According to Seedcorn project manager Gráinne Lennon, more than €43 million has been raised in funding by companies who have come through the competition. In many cases this has been a direct result of coming into contact with venture capitalists and other investors during the course of the competition, or due to the publicity generated by taking part in the Seedcorn competition.

Take Sigmoid Biotechnologies, overall Seedcorn winner in 2005, for example. Chief executive Dr Ivan Coulter found the entire experience "tremendously helpful". The investment pitch master class was really useful, he says, and their pitch certainly improved after the competition.

However, equally important was the fact that being crowned Seedcorn winners really increased the profile of the company, which in turn made it easier to secure investment.

"That was actually very useful for us because we were just embarking on raising BES money at that point," he recalls. "The fact that we were a known entity and had just won the competition made it easier for people to decide to invest."

During a subsequent funding round in 2006, Dr Coulter again found that many of the investors were aware of Sigmoid because of its Seedcorn win, and a further €1.5 million was raised.

"We used that money very productively and we're currently working on three different products," Dr Coulter says. These products are now at the clinical trial stage, and the company is also starting to focus on licensing its technology to other companies.

"What we've focused on up until now is developing the technology and developing our own products, but now we're going to start licensing the technology to other pharmaceutical and biotechnology companies," he explains.

The company has just closed another very successful funding round in which €5 million was raised. "Again, there is a strong Seedcorn component to it, because some of the investors who are investing in this €5 million round have known us from Seedcorn - we actually met them through the Seedcorn [ competition]."

"The competition has served use well and I hope with our success going forward we will serve the competition well," he says.

Would he advise other start-ups to enter the Seedcorn competition? "I think they'd be crazy not to."

Although there is no shortage of high-potential start-ups bursting onto the Irish business scene, and plenty of venture capitalists on the prowl for the next big thing, sometimes it takes a little bit of match-making to get the two sides of the equation to connect.

With this in mind, the all-island Seedcorn Business Competition was launched in 2003 by InterTradeIreland, the cross-border trade and business development body. "The competition is all about helping companies who are trying to raise new equity," says Seedcorn project manager Gráinne Lennon.

In addition to the generous prize money on offer, a key advantage of participating in the competition is the opportunity to gain exposure to venture capitalists and other investors, and the chance to learn how best to pitch their business plan concept to panels of prospective investors.

Each year, eight regional finalists are invited to investment pitch master classes run by InterTradeIreland.

Lennon says that these classes provide the entrepreneurs with an invaluable opportunity to hone their presentation to potential investors, to improve both the style and content of the pitch and to ensure they are ticking all the boxes from an investor's perspective.

A team of experts guides the entrepreneurs in the right direction, including a private equity advisor, a sales and marketing expert, a presentation coach who records their pitch, and a venture capitalist.

"The feedback we get from the investment pitch master class is excellent," Lennon says. "People saying that nothing like that really exists elsewhere."

Many start-up and early-stage companies make the mistake of giving presentations more suited to a customer than a potential investor, and fail to tailor their pitch to convey the key information that an investor will be looking out for.

Lennon says that many investors remark that while there are a lot of good companies out there, they're not "investor-ready", and the master classes tackle this issue.

Potential investors will be keen to hear about the scalability of the business, whether there's a demand for the product, if there's a strong management team in place, and the entrepreneurs practice the difficult task of incorporating this type of key information into a 15-minute pitch.

"What we're trying to do is replicate the investment process whereby you would actually send your business plan to a potential investor," says Lennon.

"If they like what they saw they would probably invite you to come along to meet them and to make some sort of a pitch to them [ so] it's really recreating that investment process."

Getting the chance to practice their pitch in front of real-life investors is invaluable, she adds. It is also far from being just an academic exercise.

"Several of the companies who have come through the competition in previous years actually met venture capitalists as a direct result and raised private equity as a result."

This year the quality of the entrants improved considerably, she says. In the past, there was a common misperception that Seedcorn was simply a business plan competition, but the rules were updated this year to specify that the company must have an equity requirement, and consequently the quality has soared.

The prize fund was also higher than ever, totalling €280,000, but Lennon explains that the money is really just there as bait to lure companies in, to entice them to enter the competition, and says that the potential benefits of taking part far outweigh this monetary incentive alone.

"The prize money is really only the carrot," she says. The overarching objective of the competition is to help companies "move along the road in terms of investor-readiness".

Another key advantage of participating in the competition is the boost it gives to the profile of company due to the publicity generated.

Lennon says that it also makes it a lot easier for companies who are trying to raise Business Expansion Scheme (BES) funding, as they can tell investors that they have been selected by InterTradeIreland as one of the top start-ups on the island.

"That can speak volumes for them," she notes.

On the last day of the competition, the finalists present their perfected pitch to a panel of judges, who look out for things such as the company's ability to grow and to perform on the business plan that the entrepreneur has submitted.

They are also looking for high growth potential companies in emerging technology sectors with a risk/reward profile that can give a sufficient return to an investor.

The awards ceremony in the evening provides yet another networking opportunity to the finalists as venture capitalists just can't stay away. At the 2007 awards last month, well over 20 venture capitalists turned up.

"Indeed, some of the VCs that have come along have gone on to invest in the companies that have come through the competition," she observes.