More than a quarter of the funds Enterprise Ireland has invested in its most recent seed and venture capital programme has been spent in EU regions outside Ireland.
The state agency put more than €13.7bn – or 27% of its total investment – into start-ups in other countries between 2007 and the end of 2009. The amount far exceeded the amount invested in companies in regions of Ireland outside Dublin.
The bulk of the money went to Dublin, which accounted for nearly 56% of the total investment, while just 17% went to other regions. The midlands, south-east and mid-east got no funding.
Enterprise Ireland has invested €50.8bn in 61 early-stage companies for its third seed and venture capital programme, which runs until 2012. The proportion of money leaving Ireland in the scheme has increased dramatically since the last programme, which ended in 2006. That programme invested a little more than 19% of its funds outside the country.
Enterprise Ireland has struggled to get private investment funds to invest more in Ireland since the beginning of the recession, as business activity has levelled and prospects for early-stage growth have been very weak.
Casual investors, who once contributed substantially to venture capital funds, have also vanished as cash has dried up in the property crash.
Enterprise Ireland is now trying to attract more international funds while trying to cover the gap in start-up funding for Irish entrepreneurs. According to its annual report for 2009, Enterprise Ireland is now the largest source of venture capital funds in Ireland.
In July, chief executive Frank Ryan said the agency would prefer to be displaced by private money, but had a responsibility to support companies when other funding was unavailable.