1. State Investment in SMEs – the Irish experience State Investment in SMEs – the Irish experience Patrick Crowe Quidico Software patrick.crowe@quidico.com Binary 2003

2. Enterprise Ireland An Irish Government Agency dedicated to supporting Irish SME’s. Support is provided to enable companies to develop a sustainable competitive advantage leading to increased profitability, exports and employment

3. Enterprise Ireland Strategy  Driving Company Investment in People and Technology  Development of Equity Availability  Internationalisation of Industry

4. Typical Sources of Finance  Tax Based  Bank Finance  Equity  Enterprise Ireland - Grants- Equity

5. Sources of Equity in Ireland Enterprise Ireland  Ordinary Shares  Preference Shares Venture Capital Funds  Seed Capital  Early Stage  Development  Specialist Funds  Regional Funds  Overseas Private  Individuals  BES  Business Angels Institutions  Corporate Finance Houses  Brokers Corporate Venturing/ Joint Ventures Capital Markets

6. Enterprise Ireland as an Investor in Irish Industry Two Approaches  Direct Investment  Indirect Investment managed by Enterprise Ireland with clients directly Venture Capital Fund Enterprise 2000 Fund

7. Enterprise Ireland’s Direct Equity Portfolio  600 Investee Companies i.e. Ordinary Shares + Preference Shares  Ordinary Shares  Convertible Prefs. Shares  10 Public Companies  Valuation at Cost - EUR 150m  Sectors 45% Computer Software 10% Electronics 10% Food 5% Engineering 5% Healthcare 25% Miscellaneous

8.  Investment into Venture Capital Funds by the Irish Government  Funds and programmes managed by the private sector  The only programme of its type in Europe  It is not considered as state aid  Main objectives are : - to stimulate the investment by the private sector of funds through matching EU (public) and private finance. - to specifically assist start-up operations and early stage development companies. Enterprise Ireland’s Indirect Equity Portfolio – Venture Capital

9.  ACT Enterprise Fund-EUR 14m  Alliance Investment Capital Ltd.-EUR 9.5m  AWG- EUR 6m  Bank of Ireland Entrepreneurs Fund-EUR 13m  Campus Companies Venture Capital Fund -EUR 7.5m  Dublin Seed Capital Fund-EUR 2.5m  First Step-EUR 4m  ICC Software Fund-EUR 19m  Irish BICs Seed Capital Fund Ltd.-EUR 2m  Guinness Ulster Bank Equity Fund -EUR 7.5m  Millennium Entrepreneur fund Ltd.-EUR 1.5m  Smurfit Venture Fund-EUR 4m  Shannon Ventures Ltd.-EUR 250k  Trinity Venture Fund-EUR 20m  eircom enterprise fund ltd.-EUR 2.5m Funds established with Enterprise Ireland investment 15 funds totalling EUR90m from Enterprise Ireland at end-2001; end-2002, 33 funds with EUR145m invested

10.  33 funds fully operational  More than 350 investments made.  Areas of investment include Software, Manufacturing, Communications, Multimedia, Biotechnology, Services and Food Processing.  80% of the investments are in Start-up and Early Stage companies.  60% of invested funds are in software projects. Venture Capital Funds Performance

11.  Targeting early stage young entrepreneurs.  EUR10m available.  Funded by Enterprise Ireland & Bank of Ireland (No E.U. dimension).  Typical investment EUR32k to EUR127k  Combined equity and loan package.  5-7 Year time horizon. Enterprise 2000 Fund Failed – too difficult and inefficient to manage for such small investments

12. Application in Romania Government Leadership Private Sector Cooperation Step by Step Approach ASSISTANCE rather than AID Worldclass professionalism of processes Alignment to non-financial support

13. In Conclusion Private Sector and Public Sector partnership has been a key to the success of the ‘Celtic Tiger’ What can be learned in Romania?