Like it or loathe it the Northern Ireland funding situation is either lifeline or an unrequited flatline to companies. Not much seems to have changed in the last couple of years while the actual sector landscape has changed a lot with the advent of new sectors and ventures.
The Proof Of Concept (PoC) Fund
The £10K and £40K PoC funds have been the starting point for many-a-startup to actually get minimum product built. I personally think it needs a bit of an overhaul.
Tiering The Available 40K Amount
Depending on the type of project you are building. Enterprise projects cost a fortune to put together, consumer apps not so much. So iPhone development for example shouldn’t really be touching the 40K at all and only be eligible for the 10K.
Three Solid Quotes From Each Supplier
I’m not even sure this happens, if not then it should. Northern Ireland is blessed with a lot of mobile developers and hundreds (and I mean hundreds) of web design firms. The quality of these is pretty good across the board. So it makes sense before any funding is passed for each applicant to have three solid quotes. This should happen across both funding amounts.
A New 100K Fund
For larger scale companies who need specific needs development in the enterprise (think BigData/Hadoop/High Performance Computing etc) with a solid proven requirement. Building these components is complex and time consuming and the skills are not always sourced in the province. Consumer applications do not apply this is an enterprise (B2B) only category with a proven opportunity to build a product.
Why do I mention the BigData aspect? Well it’s not going to go away for one and while the suits love talking about it they don’t like the fact that average seed round is about $5M to make a small dent in the market. While it’s predominantly services/support-subscription based the returns can be huge. VC’s are happy to plough $17M in to an open source BigData that makes no money on downloads but generates huge revenue on support fees (the old Redhat model).
The PoC funds have started many an idea but once the money leaves the account it’s really down to the applicant to see the delivery through. At this point it gets a bit hazy. A solid plan and specification is required for any software/hardware/business project and a concrete set of deliverables needs to be put in place.
Focus needs to be placed on the larger scale enterprise companies that need more of a boost in the initial stages. While the customer ratio may be lower they tend to yield longer lasting relationships in the long term and a larger long term value.
Consumer apps do not, on the whole, generate the returns that an overseas VC would be looking for (with rare exceptions). The days of making a fortune off apps is sort of over, the real revenue comes from the use data and in app sales around that.
Enterprise is designed with the long run in mind and not a quick exist. The idea of a £100K fund would be a better staring point instead of wasting time in hunting for small scraps under the table.