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+

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.

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.