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Firms with US plans urged to have US owners
[December 06, 2007]

Firms with US plans urged to have US owners

(The Irish Times Via Thomson Dialog NewsEdge) Irish technology companies planning to raise finance or sell in the United States should incorporate US parent companies when they start up, according to one leading American investor.

Being owned by a US entity makes it easier if those companies are subsequently acquired by another American firm or float on one of the major US markets, said Richard Irving, managing partner with Pond Venture Partners

"Even if it is just three guys in Galway and they plan to have most of their employment in Ireland, they should make it a Delaware firm for day one," said Mr Irving.

The comments were made at Enterprise Ireland's Pitch Forum 2007 event, where local venture capitalists advised Irish firms on how to raise investment in Silicon Valley.

Dino Vendetti, a general partner with Formative Ventures, an early-stage investor, said the majority of his deals came recommended to him by people he already knew. "We get over 1,000 business plans a year. We do the most work on the ones from people we know and trust," said Mr Vendetti.

He said firms that failed to raise funding often had a good idea but it was not different enough to warrant the necessary risk of capital.

All the investors said firms looking to be funded from Silicon Valley should consider moving their senior management and sales functions to the US, even if they maintain research and development in Ireland.

"It is really hard to get involved and add value when a company is thousands and thousands of miles away," said Tim Danford, technology partner with Storm Ventures. Despite this, he said 80 per cent of the investments his company made was in start-ups with an international dimension.

Five Irish start-ups who have travelled to Silicon Valley this week as part of a networking event called Paddy's Valley pitched to the panel of investors.

Nubiq, a mobile software company spun out of research in Waterford Institute of Technology, was selected by the VCs as the firm they would most likely invest in, with PutPlace, a service to help consumers manage their digital data, coming second.

Copyright 2007 Irish Times Ltd. , Source: The Financial Times Limited

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