No VC in sight? This man tapped his blood
With his software start-up unable to land funding in America, Rick Bolin headed to Northern Ireland, where his family's roots lie.
Last summer, Bolin, his young son and wife--then 36 weeks pregnant--flew to Northern Ireland in search of opportunity. Bolin's start-up, Fighting Bull Broadcast Technologies couldn't find venture financing in the United States. Instead, the company, which makes software to monitor broadcast networks, landed much of its initial $1.6 million from organizations in Northern Ireland and is focusing operations in Belfast.
Rick Bolin
CEO, Fighting Bull
Broadcast Technologies
To Bolin, Fighting Bull's experience indicates a U.S. investment climate cool to early-stage software companies and shows one way technology companies can employ lower-cost workers in different parts of the globe. He said he's paying wages that amount to just 60 percent to 70 percent of what he'd pay in the United States, without sacrificing quality. "The talent is as good as we could find in other parts of the world," Bolin said.
To be sure, the ability of the United States to nurture new technology companies and generate jobs in the field isn't dead. Venture capital investments in Silicon Valley
But there are signs that shipping technology work to lower-wage locales such as India
U.S. venture capitalists weren't interested in Fighting Bull because it has not yet proved itself in the market, said Chief Executive Bolin. The company, a spin-off of Denver-based computer visualization company Fighting Bull Technologies, has developed software designed to give broadcasters a "dashboard" for checking the status of multiple pieces of equipment in their network, such as amplifiers and routers. Although Fighting Bull signed an agreement to co-develop code with the BBC in 2003, the company doesn't expect to generate revenue until next year.
Without revenue, venture capitalists in California, New York and Colorado declined to pony up money for Fighting Bull to turn a prototype into an actual product, Bolin said. American VCs--who saw much of their investment in early-stage companies vanish during the dot-com bust--are focused on revenue-generating companies ready to get larger, Bolin suggested. "The American equity market may not be the best fit" for pre-revenue software companies, he said.
But Fighting Bull also sought funding on the other side of the Atlantic. George Koustas, founder of the parent company, had gone on a trade mission to Northern Ireland in 1999 and was motivated to do business there, in part to help diffuse the sectarian tensions in the region.
Eventually, Fighting Bull found a Northern Ireland investment firm, Clarendon Fund Managers, willing to bet on the company. Invest Northern Ireland, a government economic development group, also kicked in about $470,000. In November, Fighting Bull said it closed its initial funding round.
Bolin planned to locate at least part of his software development team in Colorado but has ditched that goal and now is hiring a staff of 13 in Belfast. Lower wages heighten the chance that a start-up will succeed, he argued. "That development team is going to have extra months to get it right" for the same investment, he said.
Some Americans might call Bolin a tech Benedict Arnold in the age of offshoring. But he's hopeful that his company will eventually generate jobs in the United States. "The next obvious step for us is to come back to America," he said. Bolin envisions selling his software to U.S. broadcasters, thereby creating custom development work, customer support duties and sales roles.
To Bolin, taking his company and family to Northern Ireland is not about abandoning America so much as it is about completing a circle. He and his wife have Irish roots, and his daughter may well have been born last year in the same Belfast hospital as her great-great-grandmother. "It was really interesting and kind of a homecoming experience for us," he said.