Enterprise Ireland’s Competitive Start Fund (CSF) – 7 Key Tips

Enterprise Ireland has been running its Competitive Start Fund (CSF) program since 2011. Over time the program has been incrementally improved and refined but companies approaching the program experience many of the same issues time after time when it comes time to engaging with a solicitor to draw down the investment awarded by Enterprise Ireland. This short post aims to offer some constructive pointers to companies as to what to do and when to do it.

1. Tax registration: If you are thinking of applying for CSF funding, make sure you have registered with the Revenue Commissioners and have been issued with a tax registration number. Most companies (or their accountants) do this as a matter of course on incorporation but occasionally at Venture Legal Services we come across companies that are not yet tax registered.

2. Tax Clearance: Next on the list (and still on the subject of tax), apply for a general tax clearance certificate from the Revenue Commissioners. All businesses are entitled to a tax clearance certificate if their affairs are up to date. You can find out more about tax clearance certificates and apply online on the Revenue Commissioners’ website. You cannot draw down money from Enterprise Ireland until you have shown them your tax clearance certificate so before you go any further, click on that last link (a new window should open) and when you are finished reading this go and apply. A tax clearance certificate is free, good to have on file and will save you time later on.

3. Bank Account: Again, most companies we deal with at Venture Legal Services already have a bank account set up but if you don’t, get on to that straight away. It’s another key condition of CSF drawdown that your solicitor vouch to Enterprise Ireland that the company has drawn down matching funding of not less than €5,000 in exchange for the issue of shares. Without a company bank account that will simply be impossible.

4. Memorandum & Articles: Get a copy of your memorandum & articles of association, ideally also in editable soft-copy. Enterprise Ireland sometimes ask for some changes to be made to the articles of association around the time of CSF completion and you will streamline that process greatly by having these documents all lined up and ready to go. Even if you can’t get them in an editable format, have a clean and clear copy available and to hand.

5. Get a solicitor: You will need a solicitor in good standing with the Law Society to issue certain key confirmations on the company’s behalf to Enterprise Ireland. The Law Society will give you access to a list of all solicitors in the country via their website but not all solicitors are familiar with the CSF process. We suggest – by recommendation, referral or otherwise – that you find a solicitor who is familiar with the process and who will make it easy for you. If you are reading this, you’re already three steps ahead of the rest! Tip – Any solicitor who has done a few of these before should be able to offer you a fixed price for the service because the work involved is highly predictable.

6. Identity verification documents: Because you need to use a regulated professional to draw down CSF funding from Enterprise Ireland, that professional is going to need to verify the identity of the directors and shareholders of your company. It is good practice to have a scanned copy of your passport or driving licence on hand and to be able to lay your hands on a recent utility bill or other similar proof of address. You are going to need to give them to your adviser so best to have them on standby and ready to go.

7. Statutory books: On incorporation, you should have received a hardbound A4 combined company register (unless your company’s registers are being maintained electronically) from your company formation agent (or accountant, solicitor etc.). Whether your statutory books are maintained electronically or in the more traditional way, you are going to be making some new entries in the register of members when it comes time to issue shares in relation to the €5,000 matching funding  and the €25,000 first tranche of Enterprise Ireland’s investment. With that in mind it is best to have these registers on hand, ready to be written up with the details of the share issuance.

I hope this is helpful. Again, if you don’t have tax clearance already don’t hesitate – apply now. And if you have any thoughts, questions or comments please email or use the comments field below. As ever we would be delighted if you chose to follow us on Twitter, LinkedIn or Google+

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We won an award!

Two months ago we received word that Peppe Santoro, Venture Legal Services  had been nominated for an Irish Internet Association Net Visionary Award. We were put forward in the category of Best Professional Services Provider. The tagline that the IIA add to the category is “someone who really gets it“. We  liked the tagline as it sums up how we try to do business and hopefully this means we have  happy clients as a result.

Past winners of Net Visionary Awards have included Jerry Kennelly of Tweak.com, Mark Little (now of Storyful), Michele Neylon of Blacknight, Dylan Collins of Fight My Monster, Jolt (and others) and Eamon Leonard of EngineYard (in 2012) so the award is one of the most significant on the Irish technology scene. A number of our clients and friends were also nominated this year so we felt in good company.

Irish Internet Association Logo

There were two steps to the judging process: an independent adjudication by a panel of judges and a public vote. We couldn’t do anything beyond just doing what we already do to influence the judges’ vote but it seemed to make sense to reach out to clients and others who know the firm well to ask for their support. The response was tremendous and quite humbling. Via email, Twitter and on LinkedIn we got outstanding support and really positive feedback. Many people took the time to cast their vote. To all of them, we are very thankful.

So in summary this is really just a big thank you to everyone who voted. We’ll do our best to keep on delivering fixed fee advice as often as we can and great value always. We wouldn’t be in business were it not for the support and custom of our clients and we will always do our best to serve.

If you’re reading this and we are not already connected, we would be delighted if you chose to connect using any of the means below.

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Intellectual Property Implementation Group Report 2012

** Click here for a copy of the final report as issued **

The report of the Intellectual Property Implementation Group has just recently been published. This article discusses the key actions arising from the report, the practical implications for Technology Transfer Offices and industry and offers some thoughts on the next steps.

Review of the Intellectual Property Implementation Group Report

A full copy of the report is also available for download / viewing here:

IP Implementation Group Report 2012 – Putting public research to work for Ireland


Competitive Start Fund (CSF)

The Competitive Start Fund (CSF) operated by Enterprise Ireland is one of the strongest innovations in Government supported fundraising for early stage startups. It is a structured and well-vetted competitive process which allows companies to avail of up to €50,000 in early stage funding from Enterprise Ireland.
Enterprise Ireland Logo

Previous calls for Competitive Start Fund investment funding have focused on the Internet, Games, Software,  Life Sciences, Cleantech and Industrial sectors. The program is ideally tailored to the needs of these companies. If this is the first time you are learning of the program, you can find out more on Enterprise Ireland’s website here.

In our experience, securing CSF investment is also becoming – by virtue of the success that early recipients of the money have gone on to achieve – an early stage marker for future successful companies. Getting CSF funding can make it easier to raise funding from angel investors or other seed investors such as seed venture capital (VC) funds.

Here at Venture Legal Services, we have developed a suite of services that is designed to allow companies which have been selected to receive CSF investment to complete the necessary agreements and draw down their funding with the minimum of fuss and effort. As part of our commitment to the startup community in Ireland, we offer this package of services at a highly competitive fixed price.

Our services include:

1.       Plain English advice on the standard form CSF investment agreement (highlighting parts of the agreement that are material and which should be of interest)

2.       Documentation to issue shares to Enterprise Ireland (including board minutes, form B5 and share certificate)

3.       Providing confirmation (which must come from an Irish solicitor) to EI of matching funding

4.       Issuing a legal opinion / solicitor’s certificate to EI in the form set out in Schedule 3 to the CSF investment agreement

If you would like to learn more about our services, just click here to email us or call Peppe Santoro directly in Dublin on +353 1 6499042.

We look forward to hearing from you.

Legal Issues for Startups

Presentation given to the National Digital Research Centre (NDRC) Launchpad participants on 20 February 2012. Updated material includes extra links to NVCA Model Term Sheet and guidance on how to source trusted professional advisers.

Legal Issues for Startups in Ireland

[slideshare id=11451766&doc=2012-02-01propellerpresentation-120206155935-phpapp01]

How (not) to resolve a customer complaint

While Irish law does not permit class actions in the way that they operate in the US, a recent small claims court case in the US looks like it may create a potential headache for companies, particularly in relation to marketing and advertisement-related claims.

Ms Heather Peters bought a Honda Civic Hybrid but was unhappy with the fuel efficiency of the car. She was particularly dissatisfied with the mileage that she achieved compared with some of Honda’s (statutorily mandated) fuel economy claims. Even though hybrid vehicles are still in a phase of rapid development, that didn’t stop a class action lawsuit being filed against Honda in the US. Ms Peters, however, was unhappy with the compensation she would have received under the class action so she opted out of the lawsuit and elected to sue Honda in the Los Angeles small claims court instead. Thanks to a blizzard of national US (and even some international) media and online publicity, her case became headline news and the US$9,867.19 award she received from the court on 25 January now risks snowballing into a much bigger problem for Honda in America.

The specific danger for Honda is that the publicity that has attached to her case (you can read a good summary here and you can access the Los Angeles County court order here) will trigger a rash of copycat actions across the USA and perhaps even further afield. Those claims could cost far more than Honda will have paid to settle the previous class action. Who would have thought that class actions – in an internet age – might actually be good for defendant companies?

Here in Ireland, companies need to be mindful of complaints from unhappy customers which have the potential to morph into a bigger problem. Customer complaint departments need to have clear escalation procedures in place to allow involvement of in house counsel (if available) or senior management (who can involve company legal advisors if needs be). Staff need to be trained to evaluate the potential of an issue snowballing in significance. The Irish Small Claims Procedure offers a collaborative way to resolve disputes. If however a dispute has broader ramifications (eg in relation to a business process that has been applied to many transactions over a long period of time or a product which has sold in significant numbers), companies need to make sure that even apparently trivial matters in the lower courts (such as the Small Claims Court, the District Court or even the Circuit Court) are not allowed to set a harmful precedent for a spate of follow-on or copycat claims from other customers.

Honda America have said they plan to appeal the US court’s judgement (they probably have no other option at this stage but it’s difficult to see how they can ‘win’ decisively from their current position). It will be interesting to see how the matter progresses. One thing is clear however, the ease with which an adverse judgement can spread virally over the internet is changing some of the old dynamics in consumer litigation and disputes.

RTE reaches agreement with the Competition Authority

On 17 January 2012, the Competition Authority published details of the agreement it reached with RTE in October 2011. This article discusses the implications arising from the agreement, the changes RTE has made to its television advertising marketing processes and some possible implications for private competition law enforcement in Ireland.

RTE agreement with Competition Authority following TV3 complaint

Update on the Bread Wars: McCambridges v Brennans

In an interesting follow up to last week’s findings by the High Court in favour of McCambridges in the case of McCambridge Limited v Joseph Brennan Bakeries, the High Court today ruled that McCambridges are only entitled to recover 40% of their costs of the High Court action against Brennans.

In many other jurisdictions (particularly the US) a losing party is not ordered to bear the legal costs of the winner. However that is the position in Ireland. As a result, McCambridges are likely to be as unhappy with this ruling as Brennans were with the court’s ruling last week. It remains to be seen if they can settle their differences or if the case will be appealed to the Supreme Court.

The reason the judge made this finding was that McCambridges advanced a number of claims (which took up quite a bit of the time involved in the case) which were not successful. Chief amongst these was the claim that Brennans deliberately set out to mimic McCambridges’ packaging. Since proving an intent to mislead the consumer is not necessary to succeed in a passing off action it is open to question as to why McCambridges took this approach.

McCambridges also claimed copyright infringement and breach of the Consumer Protection Act but these did not take up much time in the case so they weren’t material to the issue of costs.

This case now offers an important lesson to intellectual property rights holders and brand owners. They should limit the scope of their claims in any legal action to the essential elements of their claim to have the maximum chance of recovering costs against the defendant.

McCambridge Ltd. v Joseph Brennan Bakeries

The High Court earlier this year has been the venue for a dispute between two leading Irish bread makers – McCambridges and Brennans – about packaging and branding. The case is particularly interesting because of the rise generally in recent years of attempts by the producers of non-branded and white label goods to benefit from some of the positive associations that branded goods have in consumers’ minds. This article discusses some of the issues in this case at a critical juncture after an initial finding by the High Court that there has been confusion in the minds of consumers.

McCambridges v Brennans – Passing off and the value of registered IP rights