Since early last year, from the basement of an inconspicuous Manchester office building, Ernst Renner has plotted to take over the world. Or at least the worldwide niche for his computer program.
That’s when he co-founded VGO Software with his business partner Robert Nocera. Its main product, EVO, is geared to the several hundred thousand, mostly large companies that over the years have built custom software using Oracle Forms — essentially a computer programming technology.
EVO makes it relatively inexpensive to convert programs built using this older software into a newer, more Web-friendly technology.
It’s taken off quickly. Renner says he is “blowing out of the water” his only competitor.
But he’s carried it as far as he can. He needs help.
“We need to find a way to grow our marketing and sales, and free us up to do more product development — that’s what we really need right now,” he said.
Fair Pursuit
On Tuesday and Wednesday, Renner will join roughly 70 other startups and more established firms as they descend on Stamford in search of help — chiefly in the form of money — for the 15th annual Crossroads Venture Fair.
The two-day event, billed as the largest venture capital fair on the East Coast, is a chance for local startups to hobnob with capitalists and angel investors in search of the next big deal.
“Hopefully, there are investors with interest and experience that can help us, with both capital and intellectual investment,” Renner said of the upcoming trip, his first venture conference.
Whether he finds it is a different story. The conference, put on by the Connecticut Venture Group, comes during a confusing time for the venture capital world in Connecticut.
The economy is causing the biggest stresses, and insiders blame it for what many predict will be contraction or nonexistent growth in venture investment this year.
But state government is adding to the confusion, too, having yet to vote on a piece of legislation that would give a 50 percent tax credit to so-called angel investors — a move many say is critical to attracting, or the very least maintaining, the current level of venture investment in the state.
High Stakes
For some startups, the conference can end up being a last ditch effort at success.
“What are the stakes like for those going to the conference? If you are an unprofitable company, they’re very high,” said Joe Ciaudelli, who founded Montville-based photonics startup Rayvel Cor. in his garage five years ago, and now employs four people.
“It could be the difference between survival and doom. Luckily, we’re a profitable company, so we can survive whether we get funding,” Ciaudelli said.
Ciaudelli launched his firm with a $250,000 loan from the state’s Community Economic Development Fund, but is headed to Crossroads looking for cash infusions to build the market for Rayel’s main product — a high- precision measuring device.
Recession Fears
The economy may be working against those in Stamford this week.
Forty-nine percent of firms surveyed by KPMG earlier this month said they believe a recession will lead to decreased venture investment this year.
One in three said they expected venture investment in Northeast companies — which saw about $3.6 billion invested last year — to remain flat in 2008.
For, Connecticut, which lags behind other areas of New England in terms of the number of investments for venture capitalists, this is an ever-present challenge.
“We see far more opportunities in the Greater Boston area than we do any place else,” said Ed Sullivan, KPMG’s Providence-based venture capital champion for New England.
“Having said that, I know there are opportunities in Connecticut, there is just not a high concentration. So when we go hunting, we go where the hunting grounds are more favorable,” Sullivan said.
Active In Connecticut
Of course, there are bright spots, too: roughly half said they expected bigger investment this year in the Northeast’s technology and internet services sector — companies like Renner’s VGO. Forty-one percent said the region has the highest level of quality investment opportunities in the country.
“We have always looked at Connecticut as a strong base for investment, but that is because we have a higher concentration of investments here and are very active in the state,” said Alan Mendelson, of Hartford-based Axiom Venture Partners.
Echoing those comments was Maneesh Sagar, director of investments at Connecticut Innovations, the state’s quasi-public venture investment wing headquartered in Rocky Hill.
The group has made 15 funding deals in the last year.
“I don’t see us slowing down very much,” said Sagar. “We are seeing a lot of good deals. We’re one of the most active, early-stage venture capital firms in U.S. I don’t think anyone does more of those types of deals now than we do.”
And as far as a slowdown is concerned, fears of a recession-sparked venture downturn may be overestimated, said Jay Hachigian, partner in the Waltham, Mass., law firm Gunderson Dettmer.
“We did 854 deals last year — second most in the nation. But our first quarter this year was the busiest we have had in the history of the firm, so I don’t see a slowdown.”
