All Start-Ups face a variety of challenges as they try to establish themselves in their respective industries. Scale Ireland launched a ‘State of Start-ups’ Survey to explore the current challenges facing Irish start ups and gauge the sentiment of founders around the country.
Scale Ireland is an independent not-for-profit organisation which supports, represents and advocates on behalf of Irish tech start-up and scale-up companies, to create the most advantageous conditions for them to succeed.
248 start-up founders and CEOs completed the survey, which comprised of over 20 questions. Below we take a look at some of the key findings that emerged from the survey.
Funding, Capital & Costs Are The Biggest Challenges for Start-Ups
Funding
Start-ups often require significant amounts of capital to get off the ground. Securing funding from investors or other sources can be difficult. More than half of the CEOs and founders surveyed (51.6%) considered funding to be their biggest challenge in the last year, (up from 47% in 2021) while 80% of respondents felt it was difficult or very difficult to attract capital.
Staff
Start-ups often struggle to attract and retain top talent, particularly in fields like technology and engineering where demand for skilled workers is high. Smaller budgets, less brand recognition, and less stable working environments can make it challenging for start-ups to compete with established companies for top talent. 35% of start-ups have found it more difficult to recruit or retain staff in 2022, down from 45.7% in 2021. And while 40% of start-ups have lost staff in the last year, 22% of start-ups have let staff go.
State supports
Many start-ups may not take advantage of state support programs, and addressing these barriers may require a concerted effort by governments, industry associations, and other stakeholders to promote awareness, simplify the application process, and tailor support programs to the unique needs of start-ups. Uptake of state supports remains unattractive with 83.1% of respondents not availing of the KEEP share options scheme (up from 77.8% in 2021), and 66.1% not availing of the R&D Tax credit (similar to 2021).
Complexity of supports
State support programs often require extensive documentation and applications, which can be time-consuming and challenging for start-ups that may be short on resources or not have dedicated staff to handle the paperwork. 73% of those who availed or looked at availing of the Employment Investment Incentive Scheme (EIIS) found the process difficult or not easy. 49% of respondents found the R&D Tax Credit scheme complicated.
New PreSeed Fund
PreSeed Funds can provide a range of benefits for start-ups, helping them to access early-stage funding, reduce risk, build credibility, and access valuable support and mentorship. Almost two thirds (62.5%) found Enterprise Ireland’s new PreSeed funding will improve the environment for start-ups.
Cost
The cost of doing business can be a significant challenge for start-ups, particularly those that are operating in industries with high capital requirements or facing other cost pressures. 12% identified the cost of doing business as the biggest issue facing start-ups. 65.7% said inflation or cost of living issues had impacted their business.
Sustainability
It is surprising to learn that 66.9% say that they do not have a sustainability plan, which is down from 70.4% in 2021. Not having a sustainability plan for a start-up can be a significant issue, as it may lead to long-term business risks and missed opportunities.
You can read the full report here
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