By @SimonCocking. We had a quick chat with Peter Sandys, new chairman, Irish Venture Capital Association and managing partner, Seroba Life Sciences.
What is your background briefly?
Investment banking (Stockbroking, capital markets, M&A, equity investing and asset management. Trained as an accountant originally audit and tax).
Does it seem like a logical background to what you do now?
As regards VC, definitely. I did a secondment early on with 3i and then went on to do VC and BES investments. I also sat on the boards of many asset management companies. Some might question my credentials in being an investor in biotech, I do myself sometimes! It is complex but from the outset I’ve had good partners and advisers and one does pick up a bit over the course of 15+ years.
Congratulations on your new appointment, what are your goals during your time in office?
To progress the establishment of a vehicle to open up investment in Irish VC to a wider investment community particularly pension funds
Reviewing the Irish investment scene, how has it changed over the last 5 years?
Hugely, night and day as 2012 was recessionary and risk-off. Quantitative Easing has had its effect and it’s now risk on but not in bubble territory. Investors are still cautious and not everything flies, rightly so!
Back then all VCs were struggling with funding and international VCs were focused on their domestic markets as they do in difficult times. Since then, money has flowed into US VC funds in particular and that money has spread overseas to Ireland’s benefit. Eventually, the climate will change and we’ll go through that cycle again. We shouldn’t forget this in the good times and keep asking ourselves how we can make our funding market even better and more resilient.
What do we do well in Ireland, what could we do better?
Ireland bats above its weight in VC terms. We have a good eco-system with many positive initiatives to grow the tech sector over the years from State entities like EI and ISIF. The emergence of larger, stronger domestic VCs has given international investors’ confidence to syndicate with us and plough capital into Ireland as IVCA’s Venture Pulse numbers demonstrate.
Ireland needs to solve the problem of the limited investor base available to Irish VC funds hence my previous reference to progressing a new investment vehicle for this. We could also copy Sweden and, with appropriate initiatives, create a channel for retail investors to invest in Irish SMEs through the Stock Exchange.
How do you decide who to invest in, and who not to?
We look for best in class solutions to large unmet needs. People wise, one has to see competence, a professional approach and transparency as trust on both sides is critical to successful VC deals.
What tips would you give to new companies looking to grow and develop?
Avoid limited vision, limited ambition. Think big in fundraising terms and get good investors to partner with you. Everyone will say that entrepreneurs should do their homework and understand VC needs but it never ceases to amaze us what madcap proposals people can come up with!
Anything else we should have asked / you’d like to add?
We need to address the mix of capital by stage in the marketplace now. One needs a wide VC investor base with capital available at all stages from seed right through to growth capital. It’s hard to get that balance right especially when you throw in sector specialisation by VCs. You’ll always have gaps. Right now, the gap likely to emerge is in seed stage. Start-ups may have to rely increasingly on angel investors going forward. In medtech, the gap is less so in seed capital but in the next €1-3m which might be required to get early prototypes and proof of concept work completed which are required to attract larger investors. Opening up the Stock Exchange as mentioned above would help address many of the gaps in market.