gerard o brien ei bes scs presentation cork
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Financing New and Expanding Companies
BES & Seed Capital Scheme and the Role of Enterprise Ireland
12th November 2007Cork
Gerard O’BrienHigh Potential Start Up DivisionEnterprise Ireland
www.enterprise-ireland.com
Enterprise Ireland
Established in 1998 Responsible for supporting the establishment and growth of
Irish owned and controlled enterprises
Clients are manufacturing and internationally traded services sector companies employing 10 or more and
City and County Enterprise Boards are responsible for companies employing less than 10 with the exception of High Potential Start Ups (HPSUs).
www.enterprise-ireland.com
Types of new enterprises we support ….
- HIGH POTENTIAL START UP BUSINESSES -
What is a ‘High potential start-up’ business?
• Company that manufactures or trades services internationally;• Usually product / services based on technological innovation;• Export oriented;• Involving industry experienced team• Potential for sales > €1m and 10 employees within 3/4 yrs• Irish owned and located in Ireland.
www.enterprise-ireland.com
Sources of Start Up Finance
Entrepreneurs, Relatives and Friends
» 3 F’s - Friends, Family and Fools often avail of
» Seed Capital Scheme/BES
Debt» Bank loans, overdrafts, invoice
discounting
Venture Capital
Private Investors» Wealthy individuals - BES» Cashed out entrepreneurs - BES» Business angels -BES» BES
Development Agencies» Feasibility Study grants» R&D grants» Employment grants» Preference shares
BES has been and will continue to be an essential feature of Ireland’s start up financing system
www.enterprise-ireland.com
Background to the New BES/SCS and Changes
Sustained campaign by DETE, Enterprise Ireland and Forfas Government Commitment – Budget & Finance Bill but EU Commission Approval Required EU Commission Approval – 24th August 2007 Clarification – EU, DETE, Finance,Revenue, EI Commencement Order 6th September 2007 Effective 1st January 2007 to 31st December 2013 However “Terms & Conditions Apply”
www.enterprise-ireland.com
Main Changes
Schemes extended 7 years Company limit from €1m to €2m Investor limit from €31,750 to €150,000 BES €100,000 SCS Approval Vs Payment of Employment grant qualifies ITS
companies (previously needed payment) Recycling Companies must be in receipt of grant or financial
assistance Includes a definition of recycling
www.enterprise-ireland.com
Role of Enterprise Ireland - Procedures
Specific, Limited & Clearly Defined
Procedure differs for BES and SCS
Procedure differs depending on Sector e.g Manufacturing, Internationally traded Services, R&D, Recycling
www.enterprise-ireland.com
Industrial Development Act 1986 (No. 9 of 1986).SCHEDULE Software development; Data processing and electronic commerce; Technical and consulting services; Commercial laboratory services; Administrative/service centres, co-ordination and headquarters services Research and development services; Media, multimedia and recording services; Entertainment and leisure services; Training services; Publishing services; International Financial services; Healthcare services; Construction related services; Environmental services; Supply Chain Management and Logistics Management services; Commercial international standards bodies; Technology test centres; Prototype laboratory services; Intellectual property services; Group Procurement; Shipping services.
www.enterprise-ireland.com
BES Qualifying Requirements and EI Role
www.enterprise-ireland.com
SCS Qualifying Requirements and EI Role
www.enterprise-ireland.com
Changes - Eligibility for BES
Dublin and Mideast.
Seed, start up stages for small and medium Expansion stage for small only
Cork city and county
Up to 31/12/08Seed, start up and expansion stages for small and medium
From 01/01/09Seed, start up stages for small and medium Expansion stage for small only
All other Counties
Seed, start up and expansion stages for small and medium
www.enterprise-ireland.com
Implication of BES/SCS if Companies Apply for Grants and other supports from Enterprise Ireland and other Development Agencies
www.enterprise-ireland.com
Changes – Reduction of Grants & Payments
EI must reduce the % level of some supports or maximum eligible amounts offered to companies
By 50% in Dublin, Kildare,Wicklow & Meath (Cork from 2009) 20% in all other areas
Total Reduction to equal total BES/SCS Investment received
Reduced Grant and supports limits will apply for 3 year period starting with 1st investment since 1st Jan 07
Companies required to make declaration of BES/SCS received
www.enterprise-ireland.com
When is the 3 year time period triggered?
BES / SCS receipt date
How will the process work within EI?
EI monitors – date of receipt and how much, Reduction in subsequent approvals after the date of BES receipt,
www.enterprise-ireland.com
What impact will the timing of the EI approval have on the reduction of grants and equity supports
EI approval before BES is approved to the Company?
None EI approval after BES is received by the Company?
Reduction
If Company has a risk capital investment since the 1st of January 2007 that could convert to BES, Enterprise Ireland approval must also be reduced.
www.enterprise-ireland.com
Grants/Supports Subject to Reduction
Consultancy, Trade Fairs, Capital Grants/equity, Training grants/equity Employment Grants/equity (including key skills in BMW only).
www.enterprise-ireland.com
Grants/Supports Not Subject to Reduction
Research Technology and Innovation (RTI), R&D Grants/equity, Feasibility studies, Proposed new Innovation aid, (awaiting EU approval) Western Investment Fund, De minimis aid, e.g.
Market Research, Mentor, Employment grant (Key skills) in non BMW, County/City Enterprise Boards, Bord Bia, FAS. EPA
www.enterprise-ireland.com
Talk to Us……
If you or a clients are starting a business that has export potential
If you are looking to Invest in new start ups If you have questions around EI’s role in certifying you or a
client for BES/SCS
Gerard O’Brien Tel: 01 206 6433 Gerard.obrien@enterprise-ireland.com
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