A key difference from a start-up’s perspective between obtaining CSF funding and the HSPU funding, is the stage the start-up is at.
The Key Differences between CSF and HPSU
The CSF is designed to provide finance to early stage start-ups in order to assess whether the start-up is a viable business. This finance is capped at €50,000 with Enterprise Ireland becoming a 10% shareholder of the company.Conversely, the HPSU must prove the HPSU particularly focuses on innovation and this is reflected in the requirement that 15% of the company’s operating costs must relate to R&D.As the funding available in the HPSU can be much more significant that the CSF, with additional investors involved, from a legal perspective it is a more complicated structure to implement. In CSF funding, Enterprise Ireland will simply take 10% of the ordinary shares of the company. However, in HPSU funding, Enterprise Ireland will seek cumulative redeemable convertible preference shares and as such, the start-up will likely need to amend its constitution in order to create this specific class of shares, known as a variation of the share capital. Further documentation will be required in order to regularise the legal position between with initial investors (the promotors), existing investors, Enterprise Ireland, and new investors which will match the funding of Enterprise Ireland. FOD has extensive experience in assisting start-ups at all stages and can work with the start-up in a meaningful way providing advice, assistance and support to ensure that your interests are protected.
