The InterTradeIreland All-Island Seedcorn competition is back and this year has incorporated some new features to ensure that it mimics the investment process for early stage firms even more closely than before.
"We went out and spoke to the venture capital and business angel community to find out what they were looking for from firms and we have used that feedback to make some very important changes to the competition", says Connor Sweeney, Seedcorn manager with InterTradeIreland.
The competition offers a cash prize fund of €280,000 with €100,000 going to the overall winner in the early stage category and €50,000 to the winner of the new start category.
The winners in the Northern Ireland, Dublin, Connacht & Leinster, and Munster regions will each receive a guaranteed €20,000.
The new element to the competition will see those who wish to enter completing a short application form outlining the key points of their investment proposal rather than having to submit a fully-fledged business plan at such an early stage.
In addition, entrants are being asked to submit a visual interpretation of the investment proposal. This will be either a three- minute video clip, or a Powerpoint-style presentation, or both.
“When we spoke to the investment community they told us that what they wanted was a visual presentation of the opportunity at the initial stage”, Sweeney points out.
“They don’t expect a full business plan at the outset. They just want to see what the proposal is all about. If they are interested they can then go on to look at a business plan.”
This saves time for both the companies and the would-be investors.
These presentations and videos are then assessed by a panel from which a shortlist is drawn up. Shortlisted companies will be invited to submit their full business plan and if they get through to the next stage, will deliver their investment proposal to a panel consisting of members of the investment community.
Opportunities
InterTradeIreland will provide guidance and advice on preparation of video clips, presentation slide decks and preparation of business plans via a series of promotional events and business planning workshops and masterclasses.
“The 2013 format is intended to mirror the real-life investment procedure and will enable companies to receive feedback on their investor readiness at all stages of the competition,” says Sweeney.
"We are big fans of the Seedcorn competition," says Niall Olden of Kernel Capital, one of Ireland's most active venture capital funds. "We have over €173 million under management spread across a number of funds and we are active in the seed capital and follow-on series A and B funding areas."
According to Olden, one of the most valuable aspects of the competition is the qualified flow of opportunities it brings to the investment sector. “The Seedcorn competition offers a very good screening process and gives us a pipeline of qualified investment opportunities.
“The masterclasses run by InterTradeIreland during the course of the competition are excellent as well. They help the companies with their business plans and it tells you something about the mindset of the people when they take up the opportunity to avail of one of these free masterclasses.”
Banking software solutions firm Barracuda FX was a winner in 2010 and found the experience rewarding in a number of ways, some of them literal.
"The difference between Seedcorn and a lot of other competitions is that the €100,000 prize we won is in cash", says Kieran Fitzpatrick of Barracuda.
“This money allowed us hire additional people and grow at a faster rate than we could have without it. Also, the money is only paid out when you achieve certain agreed milestones and that’s very important as well.”
The whole process involved in the competition is aimed at making companies more investor-ready was very valuable as well.
“When I look back at what we were like when we entered the competition and what we were when we finished it’s like chalk and cheese”, says Fitzpatrick.
“The whole process was a massive help to us as a company. Also, we went on to raise money from ACT venture capital the following year and we were introduced to them on the night of the competition final.”
Kernel has invested in several past winners including BioAtlantis and Wavebreak but it's not just the winners or the people with full formed business plans that necessarily interest the firm.
“We contributed to one of the InterTradeIreland masterclasses in Limerick some years back,” Olden recalls.
“A guy came in and put some devices down on the table. He said he had invented them all and his previous employer had made millions from them. He wanted to make money from his next invention.
“ He didn’t have a business plan, he didn’t even have a company but we gave him €100,000 a few months later. A few years after that, the company was sold for €10 million.
“What we want is a promoter with the ability to execute an opportunity and we also want opportunities which are appropriate to the nature of the capital we are investing.”
Applications
And if the success of the competition is to be measured on the basis of funds raised by participants over the past 10 years it certainly passes that test.
“Companies who have entered Seedcorn have raised more than €165 million between them over the years”, says Sweeney. “This is the true value of the competition. It helps companies raise the funds they need to grow and develop.”
The final date for receipt of completed applications for this year’s competition is June 28th, with visual interpretations to be uploaded via secure server shortly after that.
Companies can find out more information on the application process at intertradeireland.com/seedcorn.
Shortlisted companies will be invited to submit full business plans by September 11th. Regional winners will be announced in mid-November before going on to compete in the grand final which takes place in Dublin on November 27th.
