Most of you have probably seen the Tourism Australia ad that has been running over the last year or two? (If you haven’t seen it already it, check it out at www.wherethebloodyhellareyou.com.) Overall, the campaign spent over 100M Euro to promote Australia using an ad culminating with a bikini-clad model stepping out of the ocean asking “Where the bloody hell are you?”

That’s the question I’d like to ask Irish tech investors and support organisations: Where bloody hell are you?

Given the enormous increase in wealth in the country its astonishing how VC’s almost avoid investing in small or medium tech companies. A lot of those with money now got it from literally ‘bricks and mortar’ investments and it’s easy to see how potentially riskier investments in start-ups could even be beyond the skill set of traditional professional investors. Why? Well, because using any measure you choose they haven’t been doing it, never mind doing it very well.

The chicken and egg situation in Ireland is that investors don’t routinely invest in tech start-ups which means fewer start-ups. Fewer start-ups mean less chance of success and, hence, increased risk. We have the people with the skills in Ireland and we have the people with the money. Why aren’t we a Silicon Valley of Europe? One difference (out of many) between Ireland and the Silicon Valley is that entrepreneurs heavily re-invest their knowledge and finances back into the system; Irish VC’s have a reputation not unlike some of their probably Nordic ancestors.

Given Ireland’s economic success over the last decade it’s not hard to believe that there has never been more wealth in the country. The policy, of successive governments, of attracting Foreign Direct Investment into the country starting more than twenty years ago has been a big factor in how Ireland developed economically. The IDA and Enterprise Ireland deservedly have been acknowledged for their part in this.

However, we have become a victim of our own success: Ireland is no longer a low-cost economy. Other countries which have studied Ireland’s past tactics have played a blinder introducing flat or low taxes to induce multinationals to invest in their lower-cost economies. Ireland’s current policies try to support developing a knowledge-based economy but, in aiming to launch 100M Euro enterprise IPOs rather than supporting small to medium size companies focusing on actual knowledge innovation, they are almost expecting too much.

So, Enterprise Ireland and Irish VC’s what should you be doing?

Just take a look at these two posts taken from TechCrunch on April 25th:
Y-Combinators European Clone
Scribd Rumoured Financing

Y-Combinator is a private investment group who invest modest amounts of money among many young entrepreneurs. It’s a simple idea: spend a small amount on lots of potentially-great ideas in the hope that one will hit the big-time. The European clone (first link) are private investors who are going to take on 8 start-ups at an initial spend of 15,000Eur (5k per person up to three people) for a total of 120K. They don’t care where you come from (within the EU) as long as you work in Austria. How much money is EI sitting on waiting to give to one of their High Potential Start-Ups? Keep waiting…

Now, look at the second link. Scribd.com, following a similar investment model, is looking at financing at around 10M dollars. That company was probably kick-started with 10-15K dollars.

Enterprise Ireland - Encourage lots of small innovative start-ups. You’ve been sitting on millions waiting for the big tech IPO which doesn’t happen all that often. Any businesses started in Ireland will more than likely end up being taxed in Ireland. Don’t be too focused on Irish nationals for that matter. Ireland is too small a country not to ignore talent from other parts of the EU. Ireland could and should be the hotbed of tech innovation in Europe.

Irish VCs - Just. Start. Looking. It doesn’t matter if you don’t invest because investment is becoming a lot more mobile, Irish companies will just go further afield to get it. The fact that you’re not even actively looking tells its own story.

Nothing in this post is either original or hasn’t been said before. It should be a no-brainer.

[Updated] - Damien Mulley has a great post about credit unions as possible funding sources. Check out the link to Joe Drumgooles posts about EI offering 175 million to Irish VC’s!