A number of new technology firms will soon follow Ebeon into bankruptcy, according to venture capitalists and sector leaders.

"A number of them will go to the wall," says Mr David Fassbender, head of ICC Venture Capital, which has been a leading backer of technology start-ups.

Those most at risk are those that have already obtained one or two rounds of funding but have failed to hit their targets.

Potential backers have become more cautious following the change in sentiment towards tech stocks. A main alternative source of funds - high net worth individuals prepared to take a punt - has dried up, says Mr Fassbender. They now prefer to invest alongside venture capital houses that conduct extensive pre-investment due diligence. Ebeon's collapse has not sounded the death knell of the sector in Ireland, however, he adds.

"That is wide of the mark," Mr Fassbender says. "About 20 companies a month are being formed. The ones that will survive are those with real engineered product." Mr Fassbender's assessment is confirmed by Mr Michael Kelly, of Fineos (formerly Managed Solutions Corporation), which is raising £10 million in funding.

"Last year, analysts were interested in potential; this year it is profitability," he said. Mr Kelly is confident that Fineos will raise the money it seeks and also float later this year.

The firm has been consistently profitable and has a track record of strong revenue growth: this year revenue grew by 98 per cent to more than £10.5 million.

One positive aspect of the Ebeon collapse is that it will make employees take a more long-term view and be less focused on pay. "Staff have to get sensible and ask themselves: Is this a real job? Does this company have a future?" he said.