GUEST BLOG: New Year – time to start your own business?

By Alan Meaney, managing director of Fund Recs

By the end of 2013 Ireland’s fund administration industry hit an all-time high of over €2.5 trillion in assets under administration, reinforcing its position as the number one hedge fund servicing centre in the world with 43% of global assets and also boasting the fastest growing UCITS domicile.

Over 12,000 people are employed directly in fund administration across the island with regional hubs such as Limerick and Cork adding to the traditional centres of Dublin and the IFSC. An estimated further 20,000 people are employed indirectly in supporting services such as audit, legal and regulatory.

Perhaps you are one of these employees and as is often the case the New Year can focus attention on career aspirations and possible job moves. Traditionally the fund administration industry has had a high turnover rate and with over 45 companies with a presence in Ireland that’s not surprising.

Few people however consider leaving a funds industry job to start their own funds related business.

Perhaps it’s the lack of security or the relatively few examples of people doing it successfully previously but relative to other industries such as technology there are very few  examples of funds related businesses started by Irish ex-employees.

One of the biggest hurdles faced by new companies is raising capital to get started. We are very lucky in Ireland that currently there’s an abundance of seed stage start-up capital available. Below are some of the options available:

Enterprise Ireland

• Innovation Voucher:  The Innovation Voucher initiative was developed to build links between Ireland’s public knowledge providers (i.e. higher education institutes, public research bodies) and small businesses. Innovation Vouchers worth €5,000 are available to assist a company or companies to explore a business opportunity or problem with a registered knowledge provider.
• New Frontiers: Ireland’s national entrepreneur development programme that is delivered at a local level by the Institutes of Technology. Provides a package of supports to help accelerate your business development and to equip you with the skills and contacts that you need to successfully start and grow your company. Includes a scholarship grant of €15,000.
• Competitive Start Fund: The purpose of the Competitive Start Fund is to accelerate the growth of start-up companies that have the capability to succeed in global markets.  Offers an investment up to €50,000 for a 10% stake.

Accelerators

• NDRC Launchpad: NDRC LaunchPad is Ireland’s first and leading digital accelerator, specifically designed to enable entrepreneurial teams to transform solid ideas into commercially viable startups. Offers a micro-seed investment of up to €20,000 per venture.
• Wayra: Wayra is a corporate accelerator funded by Telefonica. Successful applicants receive up to €40,000 in funding and get to locate in some of the coolest office space in Dublin.  
• DCU Propeller: The Propeller Venture Accelerator was established in 2010 with funding of €1mn from Irelandia Investments. The aim is to accelerate early stage technology start-up companies, both Irish and international, in Dublin. They offer an investment of €30,000 and in total its 12 graduates have raised over €3.2mn in funding.

While outside funding is vitally important to a large number of new businesses there are other options available.

Bootstrapping is a term that refers to growing your business through revenue from customers rather than external investors. One benefit is you retain greater control over your company and decision making. On the downside you may grow slower than better capitalised companies.

Also available to ex-PAYE works is the Seed Capital Scheme (SCS) run by Revenue. An employee who leaves employment and invests by means of shares in a company, which carries on a new business, may claim a refund of income tax paid in previous years. An unemployed person may also avail of this facility.

Outside of financial support and sometimes more important there is also a thriving start-up community in Ireland.

Every week there are meet ups and events where you can informally chat with like-minded people and hear their stories.  For a good overview of events and news you should check out the Startup Ireland group over on LinkedIn.

There is an abundance of material on entrepreneurship and starting a business available online for free. Steve Blank has a fantastic course available online called ‘How to Build a Start-up’.

Entrepreneurship is not for everyone but the conditions are better to get started now in Ireland than they have been for a number of years.  Specifically in the funds industry, new regulations have created the opportunity to create new services not previously available.

Over the last few years there’s been a sense of powerlessness about our countries fiscal situation. By creating a new business and even just one new job you will have contributed directly to the re-emergence of Ireland as an independent economic nation.