A vibrant venture-capital market, using the private sector as the main source of funds, is the key to the continuing success of enterprises in the Republic, according to the Tanaiste, Ms Harney. Commenting on the publication by Enterprise Ireland of the Annual Report of the European Seed and Venture Capital Programme, Ms Harney said that the availability of capital to fund new and expanding businesses was a key to the development of a strong indigenous industry in the Republic.
"Today, we have an active venture-capital market in Ireland and the establishment of successful partnerships between Enterprise Ireland and the private sector has been a key factor in bringing this about," she said.
Since 1995, Enterprise Ireland had actively encouraged private-sector institutions, corporate and venture capitalists to invest in venture capital funds and had raised £70 million (€89 million) since 1996, the organisation said.
Demand for venture capital has increased with the £11.85 million invested last year, representing almost double the demand there was in 1997.
The software sector attracted almost 60 per cent of the investments.
Ms Harney said that industry relied to a much greater extent on equity financing than it did 15 or 20 years ago when borrowings were the primary source of funding.
Start-up and early-stage companies captured 76 per cent of investments in 1998 while £3.8 million was invested outside Dublin. This represented 34 per cent of the total invested and more than three times greater than the 1997 level.
The Tanaiste said that the spread of investment around the Republic showed that the enterprise dynamic was permeating everywhere and was not size or location dependent.
Total employment in the investee companies had increased to 1,022 from 570 in 1997 with 13 funds fully operational and 33 investments made in companies in 1998 compared to 16 in 1997.
