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Figuring out how to access finance for your business is a key business planning activity – both before you start your business and on an ongoing basis particularly if you want to drive growth. This blogpost will outline the options for accessing finance in Ireland for startups.

Small Business Finance Options

The first questions to ask are: does the business need funds? and how will the funding be used or spent? This will help to identify the sources:

  1. Personal Savings & Taxation
  2. Short Term Enterprise Allowance
  3. Family & Friends /Angel Investors
  4. Enterprise Agencies to include social enterprise funding
  5. Business Reserves
  6. Financial Institutions (Banks) to include SBCI funds and Microfinance Ireland
  7. Peer Lending platforms
  8. Reward Crowdfunding
  9. Equity Crowdfunding
  10. Angel investor Consortiums (HBAN)
  11. Venture Capital Funds
  12. EU (R&D + VC) Funding

This graduation over time is graphically represented in the Funding Staircase below.

Funding staircase or options for finance at each step of the startup journey

This could easily have been represented graphically as a funnel as the number of businesses on the right, higher risk with scaling ambition, is a fraction of those that start on the left. I am reminded of an old but excellent slideshare on fundraising and bootstrapping by France Digital. Slide 36 states that there was a 5% chance of getting funding from VC ecosystem in France (4000 startups and 200 get funded) – I doubt that the probability has improved.

Slideshare slide 36

The article highlights that as an average fund closes 10 deals a year, there is less than one percent chance of any particular startup being funded by a specific VC.

BTW, Helen Cousins, Equity Finance Advisor (tech companies)  at Xcel Business Solutions has produced a very good Slideshare on raising money in Ireland. Another old deck but remains just as relevant today.

Getting Started

My ‘Guide to Self Employment in Ireland‘ highlights the ideal scenario of taking some time before you start your business to save money for your startup. Every business will have startup expenses. Even service businesses will take time to get paid. I suppose entrepreneurs will use personal overdrafts, credit cards and small personal loans to cover expenses until revenue is generated. They will also keep overheads to a minimum – probably referred to as bootstapping.

If you finish your employment towards the end of a year, you may qualify for repayment of income tax by revenue.

The guide also briefly discusses the Short Term Enterprise Allowance – a great initiative that has been running for ten plus years which allows people on social welfare to retain their payments for several months if they register as a sole trader.

In the Funding Staircase, the Enterprise Agencies are placed in the next stage of development, Established Startup. But the advice is to talk to them at an early stage. Your local LEO may be open to an application for Feasibility funding at this Getting Started stage.

For much more on this please read my in-depth article, ‘What Grants and Other Supports apply to my Startup business in 2023?’

Reward crowdfunding is also an option at this stage. It is relevant for small and bigger projects – see my article on Crowdfunding in Ireland which provides Irish examples that raised €20,000 and others that have raised in excess of €200,000 from platforms like KickStarter. In the early days, reward crowdfunding is a great way to facilitate your family, friends and network to support your business without costing a lot of money per person – rewards are generally based on advance (discounted) purchase of a novel product solution.

At the ‘getting started’ stage, startup promoters will have to decide if they want to ask Family and Friends for a loan or investment. This is a personal decision but sometimes it is the only option. If you are setting up, for example, a hair salon or personal training gym you may need more funds than you have personally available. This is what traditionally might have been known as an Angel Investor but that definition doesn’t really fit any more. The reality is that getting the investment back will take a long time (if at all).

InterTrade Access to finance report

Investment which is made directly from owners, friends and family is notoriously difficult to measure because there are no systems or formal requirements to collect or report such information. InterTrade Ireland published the very comprehensive Access to Finance for growth for SMEs on the island of Ireland report in December 2013. It cited a report published by DCU’s Ryan Academy in 2013 which found that about 28,000 family, friends, and colleagues provided money to new businesses in Ireland in 2011. I am going to return to this report later in the article as it makes some great points about reliance on Bank finance and relevance of Equity Investment to everyday businesses.

More established Startup

My loose definition of an established startup is a company (or sole trader) with a year or more trading experience, a small number of employees or revenues of at least €100,000 and a solid customer base and business model. For those businesses with international potential, the Enterprise Agencies are a key option in terms of sourcing finance. My aforementioned article on Grants discusses:

  • LEO – Local Enterprise Office supports
    • Priming Grant, Feasibility, Business Expansion Grants, TAME, TOV and of course mentoring and management upskilling (for example Lean for Micro)
  • New Frontiers programme – 13 programmes across 18 regional locations
  • NDRC Accelerator programmes – hubs in Cork, Galway (The PorterShed), Kerry and Dublin
  • Other accelerators to include Trinity’s Built Environment Accelerator ‘ClimAccelerator’
  • Enterprise Ireland Supports
    • Pre-Seed Startup Fund, HPSU supports, Agile Innovation

Many of these supports are on a matching basis requiring access to loan finance if the business does not have sufficient retained earnings (surplus funds arising from profits in previous years).

Financial Institutions – Bank Finance

The aforementioned InterTrade Ireland report (2013) found that SMEs have a ‘disproportionate reliance on banks’ with bank funding accounting for 94% of total SME finance for both Irish and Northern Irish SMEs. That report was very insightful:-

  • As at 31st December 2012, total bank finance of €31.5 billion had been extended to Irish and Northern Irish SMEs – €25.7 billion is to Irish SMEs.
  • There has been a fall in the supply of bank finance in Ireland to include the withdrawal of a number of providers from the Irish market. Total outstanding credit to Irish SMEs was €34 billion at the end of Q1 2010.
  • Consecutive Irish Department of Finance lending surveys have shown that working capital and cash flow needs are the primary drivers of demand for bank credit amongst SMEs (shorter term debt) as opposed to growth or expansionary finance needs.
  • There is a lack of balance sheet “right sizing”. In general, Irish and Northern Irish banks need to be more engaged in the debt restructuring or write off of debt for SMEs who demonstrate sustainable trading positions but are over-leveraged due to property or other legacy debt issues. A sustainable SME whose debt has been “right sized” to a level which they can service is a better asset to both the bank and wider economy.
  • Direct government funding represents less than 1% of total SME finance. The main beneficiaries of this funding are those SMEs who export and those operating in the manufacturing, information and communication technology and tradeable professional and scientific and administrative/ support service sectors. There is limited support for SMEs operating in most distressed sectors outside of traditional bank finance, the Credit Guarantee Schemes (in Ireland and UK) and the MicroFinance scheme in Ireland, some of which, in their early stages, show low levels of take up.
  • Of those SMEs surveyed who had external finance in place only 2-3% of respondents had other forms of finance in place. Specialist finance houses also provide working capital credit products such as debt factoring, leasing and invoice discounting. Consultations as part of this study have indicated that the take up of such alternative products is low in both jurisdictions. The report stated that Invoice discounting and similar products are often inappropriate for those SMEs whose turnover and thus debtors are falling and the receipts cycle is becoming longer. In those instances, invoice discounting becomes an expensive and more risky form of finance for an SME.

Developments in Bank Finance

The Funding Staircase features four logos in the Established stage as reminders of the following:

  • Microfinance Ireland
    • The Local Enterprise Offices can help to prepare the documents needed to apply for a loan from Microfinance Ireland – get a 1% reduction in the interest rate. Unsecured business loans of €2,000 to €25,000 for commercially viable proposals.
  • Strategic Banking Corportation of Ireland (SBCI)
    • The SBCI aims to help SMEs, through its partners, to fund ambitious business plans by offering lower-cost credit to Irish SMEs.
  • Peer to Peer Lending
    • As an alternative to mainstream banks, peer-to-peer business lending platforms like Flendr, Linked Finance and GRID Finance have developed a strong reputation and customer base.
  • Taxation supports
    • The reliefs available for investments in corporate trades are used by trading companies to attract equity-based risk finance from individuals. There are now 3 distinct schemes included under RICT – investors benefit from tax relief in specific circumstances.

Venture capital particularly Seed VC funds are relevant at the established startup phase but will be discussed now under Scaling.


The aforementioned 2013 InterTrade Ireland makes some interesting points about Venture Capital funds also known as external equity finance. It presents a very interesting graphic of The Funding Journey.

The funding journey from startup to growth

It highlights external equity finance as represented by seed capital, venture capital and business angel finance as the second most significant source of funding for SMEs. External equity finance, including government-backed equity finance, accounted for approximately 5.6% of total SME funding at 31st December 2012, with the proportion significantly higher in Ireland than in Northern Ireland. Total equity finance of €1.9 billion had been invested in Irish and Northern Irish SMEs in the five year period to 31st December 2012, the majority invested in Irish companies.

  • The Irish venture capital industry (described as vibrant) has received significant and sustained support from the Irish Government over the last few decades. In this time, the Irish Government, through Enterprise Ireland (EI), has committed approximately €348mn to 41 local Seed and VC funds resulting in capital of approximately €1.2 billion for investment in innovative high growth companies.
  • Results from the October 2011 – March 2012 ECB SAFE survey indicated the significant majority of SMEs believe that equity is not relevant to their business. This is further validated by the results of recent InterTradeIreland and Irish Department of Finance surveys which show that typically, less than 1% of respondents are financed through external equity or have applied for venture capital finance.

Venture Capital in Ireland 2023

The Irish Venture Capital Association (IVCA) is the representative body for venture capital and private equity firms on the island of Ireland. Their website provides an easy to understand explaination of venture capital explaining that private unlisted companies that attract venture capital and private equity have high growth potential, are capable of scaling quickly and are global in their ambition.

But the best source of information on venture capital is Tech Ireland.

TechIreland is an independent not for profit on a mission to promote Irish and Ireland based innovation to the world through data, content and community activities. Set up in January 2017, TechIreland has made Ireland’s startup ecosystem visible and tangible to all stakeholders for the very first time.

Their publications, available on the website – free to register – are fantastic documents full of data, information and insight.

Tech Ireland Funding Review 2022

Spark Crowdfunding, the hugely successful Irish Equity Crowdfunding platform and HBAN, the business angel network, also feature in this report (logos are included in the Funding Stairway) to acknowledge their success.

It is also where I first came across the organisation, Scale Ireland, an independent not-for-profit organisation and our mission is to support, represent and advocate on behalf of Irish tech start-up and scale-up companies. Members can access fantastic discounts from Stripe, Google Cloud, AWS, and many more to include Intercom, Microsoft for Startups, Teamwork and Frankli.

Another Tech Ireland review provided an update on the EIC Accelerator (VC type funding programme under Horizon Europe).

Ireland secured 4 winners that were awarded an impressive €23 M (in the March ’22 Call). Three of them are in the medical technology space, while the fourth is in biopharma. Two are based in Galway, one in Co. Mayo and one in Dublin. Ireland ranked 5th in terms of amount raised confirming its stellar track record in the most coveted EU funding scheme.

Emmanuele Angoine, LIRA – TECHIRELAND Startup Funding Review [First Half 2022]

Exit & IPO

Exit to include Trade Sale or Initial Public Offering (IPO) is included as the final step in the Funding Staircase. My article ‘How to address “Exit Strategy” in your Business Plan‘ briefly discusses IPOs to include a mention of Waterford start-up Kollect raising €1.76 m in Swedish IPO in 2019.

As stated in the 2013 InterTrade report, I agree that financial literacy is a key management and startup skill. I hope that this blog post is a good starting point in learning about the funding landscape, both short and medium term finance options for startups and microenterprise in Ireland.

Comments and social shares welcome …

Best regards


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  1. Good blog Donncha, beneficial to have some data that gives a perspective on VC & Angel funding difficult to see from amongst the trees.

    Another option I’d suggest is the EII Scheme, formerly known as the BES
    Approval is not difficult to obtain from revenue and is then a useful asset that can be leveraged if it’s a means of investment that suits your fundraising – I’ve heard cases where it’s a way of formalising the difficult friends/family investments you mention. There seems to be a trend for it in bigger companies and derisking through own-company investment, which has shifted focus from the original end of the BES where a group of small investors took advantage of a tax break and were incentivised by a future equity option.
    The EII prospectus is a lengthy process and will cost 2k+, or a percentage of any investment raised, but it is possible to do it reactively – draw up a detailed prospectus after receiving an expression of interest.

    1. Thanks Rob for the comment. I had realised that I had omitted to reference the EII and Seed Capital Relief which are important factors to be discussed in the Finance Topic. Best of luck with fundraising for English Bubble and with your growth plans for the future. Regards. Donncha

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