Key Terms of Enterprise Ireland’s Pre-Seed Start Fund

If you’re a founder seeking funding, Enterprise Ireland’s Pre-Seed Start Fund (PSSF) is worth a look. The PSSF offers up to €100,000 through a Convertible Loan Note (CLN). Designed to support early-stage startup companies, we break down the key terms and considerations for founders.

The Pre-Seed Start Fund (PSSF) is one of Enterprise Ireland’s flagship funding programmes. It provides early-stage start-ups with investment of €50,000 or €100,000, along with mentoring and market research access.

In this article, we summarise some of key financial terms and other obligations in the investment documents to help you understand what the investment might mean for your business.

At the end of the article, we have included a worked example of a hypothetical share cap table.

We have also prepared a practical list of seven things you need to know, and prepare, to avoid unnecessary delays completing your PSSF investment.

Key financial terms

20% discount

When the CLN converts into shares, it will convert with a 20% discount to the applicable price.

Worked Example: If the company issues new shares at a price of €10, then Enterprise Ireland can convert at a discounted price of €8.

3% interest rate

Simple interest of 3% applies from the date of the investment.

You do not make monthly interest payments. Instead, the interest accrues until the CLN is converted or redeemed.

If the CLN is converted into shares, Enterprise Ireland can either convert the accrued interest or demand payment in cash.

5-year maturity

The CLN has a 5-year maturity period.

If the CLN does not convert before the maturity date, Enterprise Ireland can demand repayment at any time after that.

The company can also redeem the CLN after the maturity date, but it must give 3 months’ notice and proof of available funds.

Additional 100% uplift for an early exit

If your company is sold before the CLN converts, then Enterprise Ireland is entitled to an additional “uplift” equal to its original investment. This uplift is capped at an amount equivalent to the value of 10% of the entire issued voting share capital of the company on the date of the sale.

Worked Example: If Enterprise Ireland had invested €100,000, then the amount due to Enterprise Ireland would be:

1. The €100,000 they originally invested
2. Plus the accrued interest
3. Plus the “uplift” of up to another €100,000

So, the total amount due could be as much as €200,000, plus the interest.

Conversion triggers - €250,000 qualifying investment

Enterprise Ireland can choose to convert:

1. On a “qualifying investment” of at least €250,000
2. On a stock exchange listing
3. After the 5-year “maturity date"

If more than one conversion scenario applies at any given time, Enterprise Ireland picks which conversion right will be used.

Other key terms

Founder personal liability

Founders and the company must warrant certain business and corporate matters.

Founders and the company have unlimited personal liability for the warranties about share capital and ownership, the company’s status as an “eligible enterprise” and company’s capacity and authority to enter into the agreement.

For the other warranties, the liability of the founders and the company is capped at the amount invested by Enterprise Ireland.

No repayment of existing shareholder or director loans

The company may not repay any existing loans to directors or shareholders without Enterprise Ireland’s consent.

Founder lock-up

Founders may not sell any of their shares without Enterprise Ireland’s consent.

Veto on sale

Enterprise Ireland has a veto on any sale of the company.

€500,000 future funding right

Enterprise Ireland has the right to invest up to €500,000 for shares or securities being issued pursuant to a “qualifying funding”.

Foreign advisory costs

Enterprise Ireland covers the cost of its Irish advisors. However, if Enterprise Ireland ever needs professional advice outside of Ireland, then the company must reimburse Enterprise Ireland for those foreign advisory fees.

Information rights

The company must provide Enterprise Ireland with particular information including:

1. Management accounts on a quarterly basis, and
2. The annual financial statements

Health warning (read your documents!)

We want to help founders. That is why we have summarised some of key terms from the PSSF agreements in plain English.

But be warned! Enterprise Ireland routinely makes changes to its legal documents. This summary was last updated in April 2025 but it may be out of date when you read it.

Also, we do not intend this article to be a substitute for reading the terms in your specific investment documents. You should always read and understand the terms in your investment documents before you sign anything.

Next steps

Our Fast Growth Companies team have lots of experience helping clients with their PSSF investment. If you are an early-stage startup in Ireland with global ambitions and are looking for assistance with your PSSF investment, please get in touch with a member of our team.

Learn more by viewing our hypothetical breakdown.

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The content of this article is provided for information purposes only and does not constitute legal or other advice.