INVESTMENT: Pentech Ventures, a Glasgow-based venture capital firm with almost £20 million sterling (€31.2 million) under management, will celebrate its first birthday next month. Despite its Scottish heritage, half of its investments to date have been made in Irish technology companies. Pentech co-founder and director Mr David Armour puts this down to the high quality of business plans and people here.

"The practice of putting software together in the UK or Ireland is similar but the difference is the experience of people in Ireland. Quite a lot of the guys setting up businesses have been in large global organisations here and have experience. Many have been in one of the big Irish firms - Iona, Baltimore or Riverdeep. It's good to have a role model.

"There is also more of a willingness to go abroad and see how it is done. Scots tend to stay at home and look to prove themselves in the UK market first. But Ireland is much closer to the US market."

Government support structures provided by Enterprise Ireland are also important and a potential model for Scotland, says Mr Armour.

Although just 10 to 12 per cent of firms seeking cash from Pentech are Irish, the company spends at least 20 per cent of its time assessing firms here, as they are more likely to pass the first round of selection. Some 30 per cent of potential investees are from London but just 5 per cent get through this initial round. So the Republic fits the profile better, says Mr Armour.

In May, Pentech, which specialises in early-stage investments in software firms, pumped €2.5 million into Dublin firm Aircraft Management Technologies.

A month before that it invested €2.08 million in Automsoft, a company that develops software for the pharmaceutical industry, as part of a €6 million funding round.

"Both are excellent companies," says Mr Armour. "Our role is to work alongside the management teams and help them grow."

Pentech is run by Mr Armour and his partner, Mr Eddie Anderson, but it also has an advisory group of successful entrepreneurs who sit on the board of firms within its portfolio to advise. A prominent member of the advisory board is Scottish technology guru Mr Ian Ritchie, who founded Office Work Stations, the first supplier of hypertext/hypermedia authoring tools for personal computers.

Pentech was fortunate to miss the technology bubble of the late 1990s and early 2000 so the firm does not have the portfolio casualties that some other venture capital firms have, says Mr Armour.

Despite the current downturn in the technology sector, Mr Armour remains confident for the future of the sector and Pentech's portfolio.