High Potential Startups: a guide to supports and funding
Enterprise Ireland offers a range of blended supports to assist companies of various sizes through the different stages of their development. For early-stage startups, such supports would include the New Frontiers Entrepreneur Development Programme, Competitive Feasibility Grants and Innovations Vouchers – but it isn’t necessary to be an Enterprise Ireland ‘client’ to be eligible for such assistance.
For startups that have moved past early-stage and become Enterprise Ireland client companies, special HPSU supports are available. HPSU (High Potential Startup) companies are young businesses with the potential to develop an innovative product or service that will be traded in international markets and have the potential to create >10 jobs and €1 million in sales within four years. Generally speaking, HPSUs are viewed as being at feasibility stage, investor-ready stage or growth stage.
Qualifying as an HPSU
Enterprise Ireland defines an HPSU as a startup venture that is:
- Introducing a new or innovative product or service to international markets
- Involved in manufacturing or internationally traded services
- Capable of creating 10 jobs in Ireland and generating €1 million in sales within three to four years of starting up
- Led by an experienced management team
- Headquartered and controlled in Ireland
- Less than five years old from the date of the company’s registration
The HPSU supports can be categorised as follows:
At this pre-seed stage, client companies will receive up to 18 months of support and engagement to take them to seed.
This is a post-seed two-year programme that will get the client company to €1 million in sales.
Essentially, the HPSU team is looking for scalable businesses that have proven their idea through market research and competitor analysis, have strong endorsements, and are gaining traction with paying customers.
Becoming a High Potential Start Up
If you believe that your business qualifies as an HPSU, you should contact your nearest Enterprise Ireland office. You can discuss your proposition, establish if your business is eligible for HPSU support and get advice on moving your business forward from a dedicated start-up advisor. There are also dedicated teams facilitating enquiries in specific areas such as startups led by women, food startups and overseas entrepreneurs.
Enterprise Ireland will need a written outline in order to put your company forward for consideration. You should either prepare a business plan (download a Business Plan template), or if a plan has not yet been completed, an Outline Business Proposition that gives an overview of your business, the background and experience of the main promoters, the steps that need to be taken to move the project forward and your funding requirements.
Exploring your potential
Once your business plan or proposition has been reviewed, a member of the startup team will get in touch for an informal discussion. This will cover the origins of the business, your plans and your development needs – but this is just a conversation with an advisor, you aren’t expected to ‘pitch’ and you won’t be given a definitive decision at this point. This is the time to clarify any uncertainties you might have, and answer any questions or provide explanation on any areas of your proposition in order to establish if the business is eligible (or ready) for Enterprise Ireland assistance.
Following this initial discussion, if appropriate, you will be offered a further meeting to discuss your business proposal in greater detail. After this meeting, there are three possible outcomes:
- If your proposal seems to have HPSU potential but requires some development (e.g. market research, value proposition, funding proposition) the startup team will offer you advice and refer you to any relevant programme to help you develop your proposition and get to investor-ready stage.
- If the proposal has HPSU potential and is close to being investor-ready, an Enterprise Ireland advisor with experience of your sector will be assigned to work with you and discuss the relevant funding and supports you can access.
- If the proposal is not eligible for Enterprise Ireland support, the startup team will explain the reasons for this and – where appropriate – suggest alternative supports from other agencies and organisations.
The Innovative HPSU Fund supports the preliminary and development costs of High Potential Startup companies. Eligible companies are able to apply for funding of up to €500,000 if matched with the same amount from an external investor (this is similar to a venture capital approach).
Eligible companies must fulfil one or more of the qualifying criteria:
- Where there is no trading record at the time of application: at least 15% of the total operating costs must relate to R&D expenses in the current fiscal year
- Where there is a trading record at the time of application: at least 15% of the total operating costs must relate to R&D expenses, in at least one of the three years preceding the application
- There must be an innovative business plan for the development of products, services or processes which are technologically new or substantially improved compared to state of the art industry equivalents in the European Community.
When HPSU is not an option
If your business is not eligible for Enterprise Ireland HPSU support, you may qualify for funding and supports from your LEO (Local Enterprise Office). With 31 dedicated teams across the Local Authority network in Ireland, Local Enterprise Offices are the first port of call for entrepreneurs and small businesses with fewer than 10 employees. LEOs provide advice, mentoring and funding to eligible startups.
The Supporting SMEs Online Tool is a cross-governmental guide to help small businesses to identify which government supports might fit their business.
If you’d like to explore the possibility of becoming an Enterprise Ireland HPSU, contact your nearest Enterprise Ireland office.