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Stellar backdrop for PE, despite fragile public health

The fragile public-health backdrop has had very little impact on private equity (PE) and venture-capital (VC) willingness to invest in start-ups, a Mason Hayes and Curran webinar heard this morning (16 November).

Hosted by MH&C partner Robert Dickson, the webinar heard that the fund-raising environment was at its most buoyant level yet, with an increase in VC activity in the first part of the year, and record levels in Q2.

These deals have been larger, and at an earlier stage, with much activity in life sciences, software and fintech, decarbonisation, blockchain, circular economy, and crypto.

High-quality opportunities

Elkstone founder Alan Merriman said the environment was very favourable for high-quality opportunities.

“The truth is, there are tons and tons of opportunities,” he said.

Pre-homework screening for the right culture fit, with ruthless prioritisation, was essential, the webinar heard, with resilience built into the process.

“Trust and chemistry must be built into the process. Don’t forget the importance relationship-building; you are trying to line up suitors,” Aine Kerr of Kinzen pointed out.

Fund-raising can also be a huge distraction for a team, Kerr added.

'People invest in people'

While remote work has increased efficiency, people still invest in people, the webinar heard, and there is no substitute for face-to-face meetings in terms of trust-building.

There has also been huge investment from the US, with global interest in Irish start-ups, and these investors may be less risk-averse and faster-moving than their European counterparts, she said.

If Europe doesn’t match this speed in terms of due diligence, there is a danger of brain drain, Kerr said. 

“I think we have to ask ourselves some hard questions as an ecosystem,” she said.