If you believe you have a product or service with potential, then Pearse can help you to assess whether it would work outside of your company. You need to know this before it makes sense to do anything else about it. You can speak with Pearse in confidence and you don't need a business plan or anything other than a good understanding of the product or service in question and a gut feel that it has commercial potential. Ideally you will have been closely involved in developing or managing this product or service and will be an employee of the company.

In general there are a lot of generous state supports for early stage companies. These enable the preservation of income for individuals starting all sorts of new companies and also allow the recouping of income tax previously paid for the purposes of investing in the venture. Many of these ventures have an idea but have no product, no customer and little market validation. Many fail in their search for a first customer or in their efforts to develop the product or service. In contrast corporate spin outs begin with product or service and a customer i.e. the company who originally spent money developing this product or service. In addition it is possible, for reasons set out in the other answers below, to negotiate terms with this company which will provide much of the required initial capital. So, provided they can validate the market for this product or service, individuals initiating such spin outs stand to lose little but potentially gain a great deal

These ventures are not like other start-ups and a good deal of income continuity can be ensured through:

- Negotiating favourable terms for the spin-out (see below regarding what can be sought
   from employer)

- Getting access to income tax paid in recent years

- State (primarily Enterprise Ireland) supports for salary costs in new ventures

- Initial funding from one of the seed capital or venture capital providers

Generally not but he will invest sweat-equity in promising spin-outs and he has excellent access to venture capital.

There are many reasons:

- After it is spun out they can continue to use the same service or product

- As you achieve economies of scale resulting from selling on the product or service
  the cost to them will diminish

- They may be attracted by the prospect of reducing their direct head-count by your
  creating a new entity which will employ some of their existing staff

- Your employer stands to gain from their taking a shareholding in the new entity

- If it looks like the venture is going to go-ahead anyway, they may co-operate in order
  to ensure continuity of service from a proven team of people that they may otherwise lose

- They will benefit from improvements to the product or service as you develop
  it for other clients, without they alone having to fund such improvements

- It will generate positive publicity for their company

- It will appeal to the public spirit of the decision makers in the company,
  some of whom may seek a role in the new venture

They may not, and the venture may be limited to selling to similar companies in markets in which your employer does not operate. On the other hand, they may not be able to stop you, e.g. if you are not bound by a non-compete agreement, and they may prefer to co-operate with you on the venture than lose you and your team to a new venture providing this service in an unfettered fashion to their competitors.

There is a long wish-list:

- Amicable co-operation

- Clean transfer of intellectual property rights, if required (and it may well not be e.g. the  
   market-ready version of the product or service might be quite different)

- Co-operation in telling the story and acting as a reference site

- A two to five year contract of service committing them to a level of spending with the new
   entity at the level of the present employee loaded cost in year one and diminishing thereafter

- An investment in kind by way of office space, light, heat and ICT infrastructure

- Permission to transfer certain key staff to the new venture

- A cash investment equivalent to the company’s redundancy obligation in respect of the   
  transferring staff

- A further cash investment in co-operation with new investors

- A leave-of-absence mechanism which will allow the originally transferred staff to revert back
  into the company in the event of the venture’s not succeeding commercially

- Co-operation in promoting the product or service to other companies in the same group