The head of this not-so-anonymous group will dig into his pocket to help startups get funding

THE HEAD OF the Entrepreneurs Anonymous group will dig into his own pocket to help startups get an early injection of funding.

The €100,000 plan is being bankrolled by EntAnon executive chairman Silviu Preoteasa – although all of the investments flowing from the initiative will be owned by the group as a whole.

The not-for-profit group, which runs regular workshops and talks for entrepreneurs and has roughly 4,000 members, will provide equity-based funding of €5,000 to help young Irish qualify for seed investment from Enterprise Ireland’s Competitive Start Fund (CSF).

Through that scheme, startups are able to access €50,000 in funding from the state body in return for handing over a 10% stake in the company.

However, the equity is provided in two lots of €25,000 – and is only released to the startup when it has raised €5,000 in investment from other investors following a successful application.

Speaking to Fora, Preoteasa said raising this initial sum – while small – was one of the biggest hurdles for Irish startups.

“As a founder, you go through all the trouble of imagining your idea, putting your pitch together, winning the CSF funding in front of a panel and then you cannot access the money immediately,” he said.

“Getting the €5,000 might be an easy process for some, but not for others. People who launch startups are students, they left employment to follow their dream, they are people who came from another startup and you don’t want to keep delaying them in accessing the funds.”

A recent EntAnon event

Reputable name

The €100,000 fund will allow EntAnon to back up to 20 successful CSF applicants, while the organisation will take a 1% shareholding in each startup it provides with €5,000.

Any new or old member that joins the group before the deadline for CSF applications at the end of September will be eligible for the funding, but there will be a selection process.

Preoteasa, who is the head of marketing technology at Hostelworld as well as an investor in several startups, said he wasn’t expecting the organisation to make money from the venture - and that any money made will be put back into the organisation.

“Angel investment is low return for high-risk investment. So anyone who thinks we’re doing this to line our pockets should look around and see that the only other people doing this at scale are Enterprise Ireland.

“We have never done it in this form, so we don’t want to get entangled in formalities, but the money is there.

“We don’t want to become a fund, incubator or accelerator. We are an organisation that is supported from its own resources and tries to make our members successful entrepreneurs.”

He added that there is a “gentlemen’s agreement” with other investors in the EntAnon group that could see further early-stage funding made to the organisation’s members in future if this idea works out.