Peter Longo, President, Executive Director, Connecticut Innovations Inc. | From OSI to Nufern, state venture capital at work

CT Innovations is celebrating its 20^th anniversary. What are some of the biggest changes in the past two decades for CI?

We have transformed from being a royalty- and debt-based financier to being an equity-based financier. This change has allowed CI to become self-sustaining from both a capital and operating perspective. Our reputation has grown greatly with our successes. Our model is viewed nationwide as a best practices model.  Other states have copied or are interested in copying our proven model.    

Does CT Innovations only back Connecticut companies? Or, do companies have to establish a presence in Connecticut as a condition of receiving CT Innovations money? 

CI invests in companies that have their headquarters and a majority of their operations in Connecticut .  CI would make exceptions to this for international companies but they would have to locate their North American headquarters and a majority of their operations in Connecticut in order for us to invest in the company. CI will invest in companies that make a commitment to move to Connecticut. 

On your website, it says, “Since 1995, returns from its own prudent investments – not state money – have supported operations and new, forward-thinking funding programs.” How affected by the recent economic downturn is CT Innovations?  Can it continue to help entrepreneurs in a down economy?

Interestingly enough, the economic downturn presents a great opportunity for CI. Environments like we are in now actually spur innovation and entrepreneurship.   CI has seen an increase in the number of good deals to consider and we are continuing to invest in great opportunities.  These investments will pay off when the economy recovers and Connecticut will be well positioned to prosper.  Many great companies, such as Microsoft, Compaq and Google, were all started during an economic downturn. We’re actually seeing more good deals now and we have the capital to invest.

According to CT Innovations, “Over the years, CI has helped over 100 emerging companies research, develop, and market new products and services.” What are some of your success stories? What companies that people have heard of may not have started without CI’s help?

In 1995 CI invested in Open Solutions Inc., a start-up company located in a shopping center next to a dentist office with just 24 employees and no revenues. Today, OSI is a leader in the financial software industry, has more than 2,100 employees and more than 5,800 customers worldwide. Another success story is Nufern, which makes specialty optical fiber and fiber lasers. Founded in 2000, Nufern struggled in the years following the market crash of 2001-2002. In 2005, the company needed cash, and Connecticut Innovations stepped in with a $750,000 infusion. That vote of confidence led to more than $4 million in investments from the private sector allowing the company to grow from 38 to 72 employees rapidly.  In 2008, German laser giant Rofin-Sinar Technologies Inc. cast the ultimate vote of confidence and acquired Nufern, pledging to operate it as a wholly owned subsidiary in Connecticut. It takes more than just money to start companies.  Connecticut Innovations has been the first institutional investor in many companies such as:  Post-n-Track, Retail Optimization, Genaissance Pharmaceuticals, Bio Plexus and Xlerant. CI has also successfully recruited 10 companies to Connecticut over the past 24 months

What might be most surprising about CT Innovations is the kind of companies you back. They’re not all like Helix Therapeutics. Some are consumer driven like Shop Text, which provides a convenient way to buy products or request product samples – simply by sending a text message from a cell phone.

We invest in a wide variety of technologies and have a broad assortment of investment tools to meet the needs of these diverse technologies. While Shop Text sounds like a simple technology it really is much more difficult to do what they do. They actually have built a pretty complicated technology on the back end to handle the volumes of data and make the users experience much more rewarding.   CI’s main investment areas are in:  bioscience & life sciences;  information technology;  clean technologies; advanced materials; and photonics/applied optics.  

In fiscal year 2008, CT Innovations funded 19 companies. What number of companies seek CI’s assistance annually? Will that number increase or decrease this year? Are more people starting companies in this down economy?   

It will increase this year because we are seeing many more good opportunities. This environment actually spurs innovation.