funding & support

Pitch Perfect is a competition run as part of the Local Enterprise Week in association with TU Dublin and the four Dublin area Local Enterprise Offices (Dublin City, Dún Laoghaire-Rathdown, Fingal, South Dublin).

This is the second year of the competition, which features a first prize of €5,000 and 12 months of free office space (in a TU Dublin campus incubator in either Blanchardstown, Grangegorman, or Tallaght) along with a number of other cash and hotdesk prizes.

This year the event was held on 8th March in TU Dublin’s city campus at Grangegorman. Over 60 founders entered the competition and were shortlisted down to just six finalists. These lucky six pitched to a panel of judges composed of Alison Cowzer (co-founder of East Coast Biscuits), Dr Richard Fernandes (award-winning entrepreneur and innovator), and Professor David Fitzpatrick (President of TU Dublin).

Each founder had five minutes to pitch their business. After this presentation, there was a question and answer session with the panel. Each of the finalists was asked additional questions and also given some great advice from the judges.

It was great to see that five out of the six finalists were alumni from the New Frontiers programme! The six finalists were:

• Auindrila Das of gClincs
• Rajat Maheshwari of Finedeeds
• Sarah O’Farrell of Barbaras Bone
• Richelle Flanagan of My Moves Matter
• Colin Deering of Anyscor
• Ben Moran of ProactivePaths

Each of the presentations were extremely professional and engaging. You could tell that the founders had put a huge amount of work into their preparation. The judges had a difficult task to pick the overall winner, but a very worthy founder was selected – Richelle Flanagan of My Move Matters. Richelle’s startup has developed a digital support platform for people with Parkinson’s disease, delivering personalised therapeutics. The Audiences Choice prize went to Ben Moran of ProactivePaths, with the other finalists each receiving runner-up prizes.

If you’re thinking of taking part in Pitch Perfect next year, the competition is open to startups/founders who meet one of the following eligibility criteria:

• Is a registered TU Dublin student
• Is currently completing, or has previously completed, an entrepreneurship programme with TU Dublin (for example, the Enterprise Ireland New Frontiers programme)
• Is a limited company registered with Companies Registration Office (CRO) and based in the Dublin City, Dún Laoghaire-Rathdown, Fingal, or South Dublin local authority areas
• Is registered as a client with a Local Enterprise Office in Dublin City, Dún Laoghaire-Rathdown, Fingal, or South Dublin local authority areas
• Is based in the Dublin City, Dún Laoghaire-Rathdown, Fingal, or South Dublin local authority areas and not registered with any other Local Enterprise Office

Other terms and conditions apply, for more information visit the TU Dublin website.

Donncha Hughes, New Frontiers mentor and trainer, shares tips and insights about crowdfunding, including a video of a recent conversation with New Frontiers alumnus Derek O’Sullivan.
I recently met up with Derek O’Sullivan of Crua Outdoors in the Tom Crean Centre, IT Tralee, for a chat about crowdfunding. This article will highlight some of the key takeaways from the conversation. We spoke about what they have learned during their Kickstarter and Indiegogo campaigns and how they raised significant equity funding using Seedrs

Crua Outdoors: A Kerry and New Frontiers startup success story

I first met Derek O’Sullivan several years ago when delivering training on the New Frontiers programme in IT Tralee, and I have kept an eye on their progress online in the intervening period – as discussed at the end of the video interview, Crua Outdoors is a very successful business with:

• 5 employees plus partners/base in the US
• Range of 20 products, with a new hammock about to the launched
• International sales across 43 countries
• Completed several crowdfunding campaigns and have raised external equity investment using Seedrs and traditional sources to include Enterprise Ireland HPSU.
• Turnover tripled from 2016 to 2017 and on target to triple again in 2018
• Seriously looking at 7 figure investment in a production facility in Kerry

Key to this success is a brilliant product and a deep understanding of the customer which leads to great brand loyalty.

Deep crowdfunding experience

In the YouTube video, Derek acknowledges that Crua Outdoors would not be around today without crowdfunding. It provided a large part of the finance for the first and subsequent production runs. They are learning all the time about the crowdfunding process.

In 2015, they successfully raised €50,891 with 175 backers. According to Kickstarter’s website, they have (at the time of writing) 3,887 live projects, with 141,606 completed projects funded by a total of 14,432,333 backers.

Kickstarter is not a store. It’s a way to bring creative projects to life.
Kickstarter does not guarantee projects or investigate a creator’s ability to complete their project. It is the responsibility of the project creator to complete their project as promised, and the claims of this project are theirs alone.

Kickstarter website

Derek identified the following as the Three Big Factors to manage in a crowdfunding campaign:

1. Market research
   make sure you are offering something that people actually want.
2. The video
   needs to be professional and focus on the problem being addressed.
3. Drive traffic to your site
   have a plan to source and convert visitors to your campaign page.

Derek believes that crowdfunding should be utilised more by startups in Ireland – it is ideal for product companies particularly those that have a tech or innovation angle. See the New Frontiers article Financing: alternatives to business bank loans, which runs through some alternatives to bank loan finance, listing crowdfunding as one option.

InterTrade Ireland equity crowdfunding resource

It was a happy coincidence that as I was arranging the meeting with Derek, that InterTrade Ireland published a superb resource on equity crowdfunding as a downloadable PDF.

“Equity crowdfunding has established itself as a real complement and alternative to traditional equity funding sources for High Growth Potential Start-Up and Growth Stage businesses in the UK and Ireland in recent years.”

Source: Equity Crowdfunding Resource, InterTradeIreland (page 2)

The InterTrade Ireland reports presents (page 4) the following table gleaned from the Beauhurst report on 2017 UK Start-Up investment activity ‘The Deal’, reflecting the deal volume activity of the lead UK-based equity crowdfunding platforms. The lead private players in the UK are Seedrs, CrowdCube, SyndicateRoom and VentureFounders.

The resources section is very well written (only 22 pages). It provides the necessary background information on equity crowdfunding compared to reward-based crowdfunding and the usual sources of startup funding. It also provides four case studies in the form of two pages summaries with all the pertinent details across set headings to include money raised, equity offered, and campaign preparation.

Crowdfunding is not a case of ‘build it and they will come’… it’s never that simple

Derek stresses in the video that crowdfunding is not a case of ‘build it and they will come’. This point is echoed in the InterTrade Ireland resource on page 11 and by their HouseMyDog case study.

“A business launching a fundraising campaign typically cannot solely rely on the Equity Crowdfunding platform.”

Source: Equity Crowdfunding Resource, InterTradeIreland 2018

Proactive management of crowdfunding campaigns to include significant preparation in advance is required.

Watch my conversation with Derek

Please note that this was one take – and the full interview was uploaded – edited subtitles have been added to the video to complement the audio.

Innovation Vouchers are an excellent way for companies to tap into leading research expertise in order to develop a solution or product at the pre-commercial stage. The scheme allows businesses to improve their innovation capability and builds links between Ireland’s public sector knowledge providers and the SME community.

Innovation Vouchers were launched by Enterprise Ireland seven years ago and have proved phenomenally successful. Some 1,400 applications are received every year, around 70% of which are successful.

Innovation Vouchers offer Irish SMEs the chance to connect with knowledge providers around the country in order to develop a solution or product. Vouchers are worth €5,000, valid for 12 months and can be redeemed at one of the 38 registered centres that provide leading academic expertise (ROI and NI).

As the name suggests, vouchers can be used for any kind of product or application that is truly innovative, such as:

• new product/process development
• new business model development
• new service delivery and customer interface
• new service development
• tailored training in innovation management
• innovation/technology audit

Innovation Vouchers are the only Enterprise Ireland funding you can cumulate with the New Frontiers grant of €15,000. A company can apply for up to three vouchers, if one of those is a co-funded voucher (see below). Vouchers are only redeemable against the net cost of the services provided, so the company will have to cover the VAT cost of the voucher – which will be billed by the knowledge provider in question.

How does it work?

There are currently two main types of voucher:

Standard Voucher (€5,000)

A standard voucher is valid for 12 months and can be used with any of the registered knowledge providers. You must apply for a standard voucher during one of Enterprise Ireland’s open calls. There are usually three calls a year, in Q1, Q2 and Q3. Dates are published on the Innovation Voucher page of the Enterprise Ireland website. N.B. The latest call has just opened and closes on Wednesday, 20th May at 3pm.

Co-funded Fast Track Voucher (€5,000)

This option is suitable for companies that have already been awarded two Standard Vouchers and are not eligible for more; OR where timing is short and the company cannot wait for the next call for a Standard Voucher.

The co-funded voucher is for projects costing up to €10,000, paid for on a 50/50 basis by the Innovation Voucher and the company. For these projects, the company and the chosen knowledge provider must jointly agree on the programme of work before submitting the application. Applications can be submitted at any time, and a decision can usually be given within three weeks.

The rules

To apply for an Innovation Voucher, the company must be:

• An SME (fewer than 250 employees and a turnover below €50 Million/balance sheet below €43 Million)
• A registered Irish company, in any sector other than the agricultural sector (specific supports are available to this sector from the relevant agencies)
• A for-profit privately held company (non-profits, charities, semi-states, trade associations, sports clubs, company representation bodies and non-commercial organisations are not eligible for Innovation Vouchers)

Other points to remember:

• Applications can only be made online via the Enterprise Ireland Online Application system.
• You don’t have to be an Enterprise Ireland client or have an Enterprise Ireland Development Advisor to apply for an Innovation Voucher.
• Vouchers may only be used for work with one of the registered knowledge providers – they are publicly funded organisations such as Universities, Institutes of Technology and research centres.
• Companies can only have one “active” voucher at any time. A voucher must be redeemed by the knowledge provider, and the VAT costs paid in full by the company, before another voucher can be applied for.
• The intellectual property developed during the project is owned by the company, unless agreed otherwise.

Innovation vouchers have been used in areas as diverse as retail, business services, forestry, telecoms & software, engineering, life sciences, electronics and food.

Maximise your chances of a successful application

Applying for an Innovation Voucher is very straightforward, but as always a little preparation can save you wasting your time on an application that has no chance of success:

• Read the comprehensive FAQs on the Enterprise Ireland website (PDF), it explains all the criteria and procedures involved.
• Make sure that you are eligible. You must be a registered company (not a sole trader) and meet the eligibility criteria.
• Make sure that your project is eligible. The vouchers are available for a wide variety of solutions, but activities such as software/web development and marketing/advertising are excluded.
• Make sure you complete the application form fully. You need to demonstrate the highly innovative nature of the solution you intend to develop, and the benefit that this will bring to your company.

Examples of companies that have benefited from Innovation Vouchers

Monford Ag Systems – GrassOmeter

Steven Lock is an award-winning TV producer and director. It was in 2010, while filming the series Farmers – A year on the land, that Steven first saw what an issue grass measurement is for farmers. Most use a plate meter – as the name suggests, it is essentially a large disc that moves up and down a pole, allowing an average height reading to be taken – which is cumbersome, slow and not very accurate.

A chance conversation with Dr John Whelan, from Trinity College, led Steven to look into the Innovation Vouchers scheme. He applied, and the voucher allowed him to have the resources of a researcher for a month to look at developing a different way to measure grass. A second voucher was obtained, allowing a mechanical engineer to look at replacing the plate with sensor technology so that the product works as effectively on slopes as it does on the flat.

The GrassOmeter, as the product is known, is currently in the last stages of testing. Steven has secured €1.4 Million in funding, registered two patents and brought on board legendary Apple designer, Jerry Manock, as Head of Design. Steven’s team is now working hard on the final touches that will bring the GrassOmeter to market

It’s a wonderful scheme, because it really does encourage innovation. It’s what prompted me to wonder if there was a better solution to grass measurement. If the vouchers didn’t exist, then neither would the GrassOmeter.

Equiniche Sciences – Harmony Feeder

Dr Michelle O’Connor is a Veterinary Physiotherapist. She had a concept for a hay feeder that would enable stabled horses to eat at ground level and throughout the day – solving the physiological and behavioural problems associated with intermittent feeding and eating in an unnatural position.

Having successfully applied for an initial voucher, Michelle worked with Athlone Institute of Technology’s Centre for Industrial Services and Design to develop and prototype the main polymer body of the feeder. The following year, 2012, a second voucher was used to develop the rubber mesh system which controls access to the hay (both the material and the configuration of the mesh were researched).

The Harmony feeder can be secured at ground level in the stable and holds enough hay for a day, which the horse pulls out from the bottom –  mimicking the natural grazing position. The product has received three patents – in the US, the EU and New Zealand. It was launched in the Irish market at the Equus Live Exhibition, Punchestown, in November 2013 and won the inaugural Innovation Award.

As we had limited funds, the scheme gave us the impetus to get started. Without access to the expertise provided, we would not have been able to visualise our product and bring it through development.

Raising capital is never easy, but it’s also essential for growing a successful startup. The hunt for investment is highly competitive and there is no guarantee of success, so knowing how and where to solicit funds is crucial. As always in business, preparation is the key!

To start with, it’s important to understand that in fundraising you are effectively “selling” yourself and your business opportunity. It takes a lot of work, and a little bit of luck, to find an investor who’s the right fit for your company.

In simple terms, you need a plan so that you can:

• assess the financing options available;
• decide on the correct course of action;
• agree a timeline; and
• ensure the internal resources, commitment and expertise are in place to properly execute the plan and meet any due diligence requirements.

Once the strategy is clarified, focus on the key priorities that will get you there!

Match the right investors to your opportunity

Fundraising is a time-consuming and lengthy process, so focusing on too many investors is a costly mistake. Start by identifying the type of investors that are interested in your sector and companies at your stage of development. Put together a list of potential parties, based on strategic fit and financial strength. Ideally, you want a backer who brings industry know-how and contacts, as well as money (including follow-on money) – so choose wisely.

Tell a compelling story

Investors want to see a scaleable business with a huge addressable market in which you can have a defendable market position. However, this is of no value unless the funders believe there is also a strong management team in place that can deliver on the opportunity.

Make sure that the business proposition and management strength is clearly communicated in your business plan and presentation. This, along with a realistic valuation and plausible exit strategy, is a winning formula for all financiers.

How much?

Simplify, simplify, simplify! Streamline the business plan by splitting it up into easily understood milestones. Quantify the resources and monies that need to be raised for each milestone. Remember that at early-stage funding you give away more equity to investors, so it makes sense to match your subsequent funding rounds to key milestones so that later money can be raised at a higher valuation.

Focus on building relationships with potential investors

It’s good to start the process early – i.e. before your funding needs become urgent – so that you can determine if a particular funder is a good fit for your company, and vice versa. Aim to get introductions to your target investors through your network and work on building trust through every interaction.

Follow-up regularly with interested parties, letting them know that you have achieved certain milestones. However, for many successful companies, a change in strategy may be required along the way and don’t be afraid to communicate this – after all, agility and the ability to “pivot” the business illustrates a capable management team.

Keep it going…

Never think of raising money in isolation – always have your eye on the next round. Use PR to promote the business, new products and customer wins to create the “sizzle” factor that will ensure potential investors are always watching your space!

Creating a successful business is a complex process, which involves lot of hard work and determination. Continuous support from all the stakeholders is required throughout the life-cycle of the business; however the initial phase is perhaps the most critical.

Events in the initial stages usually shape and drive the short and medium-term strategy of a company. In the following paragraphs I will try to highlight the importance of early support in general and the help we received from Enterprise Ireland at the very early stages of our business; and how that helped us to define a roadmap and determine our future direction.

Ask for help from the beginning

When I initially thought about setting up Tuition Desk, I was looking for someone who could help me determine if my idea was viable and had commercial value, but also to provide me with some initial direction. I started looking at various options, including banks, angel investors, VCs, as well as government agencies.

I did some research on the Enterprise Ireland website and came across a program called New Frontiers that I felt might suit me at this stage. I looked at the programme content and found that it provided exposure to most of the components involved in the initial stages of setting up a business, including directions on how to validate an idea in the market.

Business validation and business models

Anyone looking to set up a business should validate their idea before spending any further resources on it. Validation provides initial direction and the opportunity to refine the business model at the very early stages, which is less easily done once the business is underway.

My company is a web-based market place that operates within a complex tutoring market. We have refined our business model a number of times using the tools and techniques we came across through the New Frontiers program. For example, we came across a tool, called the Business Model Canvas, which helped us to break down our business model into difference components and visualize it to establish which components were missing or under-developed. The financial models taught were also very helpful for understanding our financial needs. Having no previous financial experience, I thought these tools really allowed us to shape our finances and analyse our investment needs.

New Frontiers combines support and training

We also had opportunities to speak and discuss our business idea with a large number of experts; they provided valuable advice which helped us formulate a short and medium-term strategy for our business. One such valuable contact was Ian Cleary, who delivered the digital marketing sessions. Having come from a technical background, I had very little exposure to sales and marketing training, which are the fundamentals of any business. New Frontiers provided me with opportunities to attend well-structured training sessions that gave me much-needed exposure to digital and inbound marketing techniques.

[Getting support] has given me the encouragement and direction to take my business forward with self-belief and confidence.

My mentor, Alistair Kidd, was also very knowledgeable and always had ideas to improve the business. Getting basic training related to setting up business, meeting experienced mentors and advisers and having an unlimited number of discussions with peers related to my business has given me the encouragement and direction to take my business forward with self-belief and confidence.

I believe that, without this exposure, the progress of my business would have been much slower and I would have gone in numerous directions that proved less effective – learning things the hard way instead of hitting the ground running.