While Northern Ireland currently has one very strong angel investor network in Halo does this lack of competition actually hinder our startups chances of securing funding quickly, if at all, rather than help them?
I’m a big fan of Paul Graham‘s writing. He knows a thing or two about startups and funding them from his own experience in setting them up and more recently by funding and supporting them through YCombinator. For those who haven’t heard of him, he is a prolific essayist and writes regularly on subjects related to technology startups, investing and general popular enterprise culture. We could do with a few more like him in our wee country but I digress. What got me thinking about the need for Northern Ireland to have more business angel networks was his recent essay “High resolution fundraising”
Investors influence investors
Graham cuts to the chase pretty quickly in an essay that is short by his standards. In his view “By far the biggest influence on investors’ opinions of a startup is the opinion of other investors”. In a funding landscape where there are a plethora of investors this actually plays into the hands of startups and those who are willing to take a punt early. What I mean by that is that it opens up the opportunity to create hype, play one group off another, forces investors to make quicker investment decisions to gain first mover advantage and invest on better terms than those who dither. Its pretty tough to get startup capital here in NI at the best of times but anything that speeds up the flow of early investment has got to be a good thing – right?
I was given a great overview of Halo some months ago by Richard Ferguson who manages the day to day running of the angel network when I met with him down at NISP. He and Alan Watts have done a great job of recruiting new angel investors who now number over 100 if memory serves me right. I have also met with many angels and founders who have taken part in the process. All are generally supportive of the way things are run. The run a tight ship. Well it would be given it is based in the Titanic Quarter. I just can’t help but think that a bit of healthy competition is now called for in terms of a new network or several new networks.
This would introduce a bit of scope for constructive ambiguity on the entrepreneurs behalf in terms of who may or may not be interested in investing in their businesses. It might lead to faster investments getting capital, the lifeblood of any startup, into their hands quicker. Sure those that are uninvestable will still be uninvestable. The cream might rise to the top faster however and that can only be a good thing for founders, investors and the country at large. The sooner they find their feet, the sooner they scale to a size were they start employing people, export overseas, pay taxes and help us fight our way out of the financial difficulties we find ourselves in.
Seedcorn deadline approaches
Don’t forget that the closing date for business plans to be submitted to InterTradeIreland for the Seedcorn competition is the 17th September. Northern Ireland is generally under-represented so you could be in with a good chance to win the regional finals and get through to the all island final if you play your cards right. Even if you don’t win, the opportunity to hone your business plan and pitching skills will stand you in good stead so what are you waiting for?