Irish venture capital firms need to raise €750 million to support indigenous technology firms grow their business, industry leaders were told tonight.

John Flynn, chairman of the Irish Venture Capital Association told the group's annual dinner that leveraging such resources could deliver €1.5 billion to assist Irish tech firms become global players

But he also called on tech entrepreneurs to resist the temptation to cash out early.

“Ten times the employment growth occurs in the five years post-IPO so the prize for the Irish economy in building independent sector leaders is significant,” Mr Flynn said.

He said recent market statistics placed Ireland second of the euro zone countries for VC investments as a percentage of GDP and that it had exhibited the highest level of growth over the previous five years.

“This is a strong endorsement of Ireland’s activity rate and positive momentum and underpins the country as one of the top tech hubs in Europe,” he said.

But he warned that high rates of capital gains tax could see entrepreneurs moving abroad to establish their businesses. He called for a reduction in CGT to 12.5 per cent or 15 per cent from the current rate of 33 per cent for innovation activities as defined under existing tax legislation.

“A higher rate could be maintained for speculative non-productive gains such as property investment,” he said. “This should result in no cost to the State for the next five years as it takes at least that to develop a company to the stage where an exit or sale is feasible.”

Ireland’s corporation tax rate had been a factor in attracting foreign direct investment, he said, but with increasing international focus on this, “it is more vital than ever to encourage indigenous enterprise and start-ups”. As part of this, he repeated recent industry pressure for pension funds to invest in venture capital.