12th May 2004
Launch of 4th Level Ventures Fund
(Speech By Ronan Reid, Managing Director of 4th Level Ventures)

Tánaiste, Ladies and Gentlemen

I am Ronan Reid and as Managing Director of 4th Level Ventures I would like to welcome you all to the Royal Irish Academy for the launch of 4th Level Ventures. As one of the founders of Dolmen Securities Limited, 4th Level ventures represents one of the most exciting initiatives undertaken by both Dolmen Securities Ltd and our own partners ERGO. 4th Level Ventures as the name suggests is a venture capital company focused on university start-ups.

It is increasingly difficult for Ireland to rely on cost competitiveness for economic growth, foreign investment and sustained employment. The Government through Enterprise Ireland, Science Foundation of Ireland and the Higher Education Authority, has developed, pursued and implemented a far sighted policy of creating a knowledge based economy through the to-date €2.54 billion in funding for research. Return on this investment will naturally take the form of a more educated workforce adding greater value to domestic and international employers and the related ability to attract greater levels of foreign direct investment. For this Tánaiste and Enterprise Ireland I applaud your efforts.

The second means toward generating a return on this investment is via commercialising the resulting research through the establishment of new companies to provide solutions to global companies using best of breed research. This is the role of 4th Level Ventures. 4th Level Ventures in partnership with Enterprise Ireland and third level institutions will form fund and build companies from the business opportunities that arise from university research

We are and will continue to target third level institutions to establish the commercial opportunities that arise from on- campus research. We have established partnerships with domestic and international venture capitalists to fund resulting companies to maturity.

We continue to seek experienced multinational managers and entrepreneurs with proven track records to drive these companies to success. Finally we have and will continue to build a network of domestic and international companies as customers, validators and co-investors to our investments.

The path to funding for start-up companies is a difficult one. The implementation of Basle II for banks will make banks less likely to fund venture capital in any form. This combined with the recent referral of the Business Expansion Scheme to the European Commission poses additional problems to the provision of venture capital. We acknowledge the staunch efforts being undertaken by Enterprise Ireland and the Department of Enterprise Trade and Employment to secure the continued operation of the BES and Seed Capital Schemes. The availability of these funds is essential to grow new businesses. Many of these start - ups essentially depend on the promoters own equity, Enterprise Ireland funding and the Business Expansion/Seed Capital Schemes and now 4th Level Ventures to complete the proof of concept stage and get the business started.

We would also like to see extension of the proposed tax credits whereby the individual can gain an allowance for financing and encouraging research and development in addition to the ability of the company to offset qualifying R&D expenditure against all tax liabilities. Our neighbours in the UK have adopted this approach which has proved to be very successful and will be able to ensure a source of funding for research beyond 2006.

The role of Enterprise Ireland in the fostering of start up companies deserves considerable credit and is often overlooked Over the years we have provided advice to many Irish and international start up companies and the singular role played by Enterprise Ireland in the backing of start ups is the envy of many UK based companies with whom we have worked. Congratulations to Pat Maher, Fergal O Morain, Kevin Sherry, Julie Sinnamon, Dennis Marnane and all those with whom we have and will continue to worked with in Enterprise Ireland. Keep up the good work.

Finally we would like announce and welcome Ruairi Quinn as Chariman of 4th Level Ventures and on both on behalf of 4th Level Ventures and myself I would like to thank Dennis Marnane of Enterprise Ireland for his huge support and encouragement in the formation of 4th Level Ventures. Many thanks Dennis