There’s a moment right now — a moment of unusual clarity — where two of the most insightful minds in Irish entrepreneurship are pointing at the same challenge from different angles.
DC Cahalane, in his sweeping and detailed piece What Ireland Does Next, lays out a national plan for entrepreneurship as a strategic imperative. If we want to keep our economic independence, he argues, we can no longer rely on foreign capital to build our future. The scale, the pace, and the intent all need to shift.
“Ireland must mount an equally ambitious, whole-of-government approach to entrepreneurship — creating indigenous companies capable of achieving global scale and capturing economic value within Ireland.” — DC Cahalane
Brian Caulfield, in his writing and on stage at events, has been just as clear — though more surgical. We’re good at building early-stage companies. But when it comes time to scale, we hand over control. Not because we want to. But because we have no domestic capital set up to go with them on the journey.
“We’re world-class at getting companies started. But we have a chronic gap in scale-up capital. That’s where the value is lost.” — Brian Caulfield
And Brian’s gone further. He’s one of the few to explicitly say: if the government wants to fix this, it has to unlock one of the biggest sources of long-term capital in the country — our pension system. Pointing out in a recent Linkeind post that on a per-capita basis we have about one fifth of the venture capital available to US companies.
So that’s what this post is about.
Not a policy proposal. Not a budget submission.
Just a way to take what DC and Brian are both saying — and suggest something that might make both of their visions real.
Where we are and why?
Ireland has always honoured the guest. It’s in our laws, our culture, our soul. The Brehon Law of Hospitality once demanded that strangers be treated better than family, and in the age of foreign direct investment, we built an economy on that principle.
Our hospitality has had a downside though. Not only did we build a world-class welcome mat for global capital — which we should be proud of — but we failed to build the same for our own. So we send our best companies abroad in search of investment. And just to complete the absurdity, we then send our pension capital overseas too, where it ends up backing those same companies once they’re no longer ours.
Ireland is the only country I know of that can raise great founders, force them to go abroad to fund their future, and then invest its own pensions in the VC funds that backed them later. We lost the company, the ownership, and the upside. That’s not strategy. That’s an economic identity crisis.
The Proposal: 5% for the Future
Ireland’s pension funds currently hold over €146 billion in assets. Less than 0.5% of that is invested in private equity or venture capital. Even less again is backing Irish companies.
By contrast, pension funds in the US allocate about 14% to VC/PE. In Canada and the Netherlands, it’s closer to 10%.
Here’s the modest suggestion:
Target 5% of Irish pension assets for Irish innovation.
That’s €1.5B–€7.5B redirected into long-term, patient, domestic capital. It’s not charity. It’s not “picking winners.” It’s building the capital layer we’re currently missing.
The layer that allows:
- Irish companies to scale from Series A to global growth
- Founders to retain meaningful ownership
- Jobs, IP, and tax returns to stay in the country
This isn’t a moonshot. It’s a shift from passive capital to productive capital.
Why It Matters — and Why It Hasn’t Happened Yet
Most people don’t realise their pensions are already funding the innovation economy – just not ours.
Irish pension funds, by design, are conservative. They’re diversified, sure, but mostly into large-cap global equities, government bonds, and foreign-domiciled funds. It’s no surprise: those are the paths of least resistance. They’re liquid. Benchmarkable. Low-blame.
And that’s the point.
This isn’t just a structural problem. It’s a behavioural one.
The Behavioural Barriers
- Loss Aversion
No one wants to be the first to take a risk — especially with other people’s retirement. - Default Bias
Trustees stick with what’s been “standard practice,” even when the future has changed. - Perceived Blame Risk
If something goes wrong in a new area (like VC), it looks like a mistake. If something goes wrong in a big passive tracker, it’s just “market forces.”
As a result, the biggest pool of long-term capital in the country is structurally incentivised to back innovation everywhere else but here.
“If Irish pension funds don’t participate, we risk becoming a farm team for global capital — developing the talent, then selling it too soon.” – (Anton Mannering)
How We Reframe It
Here’s how we begin to change the narrative — not with force, but with reframing:
- This isn’t risky – it’s prudent diversification.
5% in Irish VC/PE isn’t radical. It’s in line with what smarter pension systems globally already do. - This isn’t about picking winners – it’s about enabling winners.
We don’t need to bet on one company. We need to back the layer of capital that helps many of them stay. - This isn’t speculative – it’s strategic.
This is about funding the economy we’ll retire into.
How It Could Work
You don’t need to change everything at once. You need to create the conditions for the first few movers.
1. A National Innovation Fund-of-Funds (IIFoF)
Backed by ISIF or Enterprise Ireland. Run professionally. Targets top-tier Irish VC and PE funds, with an EU option for diversification.
2. A Phased Allocation from Pensions
1% in year one. Target 5% over five years. All within IORP II’s “prudent person” rules. Transparent, gradual, measurable.
3. Public Visibility and Opt-in Models
Show the public what their pensions are building. Reward early adopters. Track impact. Make it a point of national pride.
4. A Regulatory Nudge
Government doesn’t need to legislate – just signal. Clarify that Irish VC/PE is a legitimate and encouraged part of diversified long-term portfolios.
Why This Could Work — and Who Could Lead It
To get this moving, you need more than policy. You need people.
People like Brian, who understands capital structures better than anyone in the country.
People like DC, who understand that ideas don’t become ecosystems unless capital, policy, and energy show up together.
This isn’t about replacing what we have. It’s about evolving it.
And it starts with a shift in how we think about pension capital — not as something to keep safe, but as something to put to work.
Final Thought
DC Cahalane gave us the blueprint.
Brian Caulfield called out the bottleneck.
The capital is there. The know-how is here. The timing is now.
This isn’t a revolution. It’s a reallocation.
5% for the future.
Because if Irish money won’t back Irish ambition, who will?
If you want to see some more detail on how this could be implemented you can click here or on the button below.
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