Venture capitalists will boost their investment in Irish companies this year as the number of high potential start-ups continues to grow, Enterprise Ireland has predicted.

Executive director Mr Pat Maher said "the strong flow of quality projects" will woo investors. He was speaking as the organisation announced five new seed funds for start-up and early stage companies, with a total value of €30 million.

He said: "Enterprise Ireland continues to see a strong flow of quality projects from Irish entrepreneurs and I would expect to see growth in the level of investment by venture capitalists by 2003 as they take the opportunity to invest in growth-oriented companies."

Enterprise has already invested €65 million in business capital and is committed to allocating €400 million by 2006 under the Seed and Venture Capital Programme.

Mr Maher said the economic downturn had made investment capital harder to come by for smaller firms.

According to a Department of Enterprise, Trade and Employment survey, 98 per cent of firms seeking lower level funding had difficulty raising capital, he said.

He added: "We have responded to this equity gap by working with the private sector to establish five new additional funds to make smaller scale venture capital investments in Irish companies at the early phase of their development."

Some 77 per cent of Enterprise Ireland venture capital has gone to seed and early stage companies with 28 per cent going to investments outside Dublin.

Mr Maher said: "The support of a positive venture capital market is vital to the development of business. "