Q&A talks about venture capital funding in Connecticut with Claire Leonardi, who recently finished her last day as CEO of Connecticut Innovations, the state’s quasi-public venture capital investment arm.
Q: Connecticut Innovations recently received a $25 million infusion from the state Bond Commission. What will those funds allow you to do?
A: The $25 million infusion is part of the $125 million in funding Connecticut Innovations (CI) received from the 2011 Jobs Bill.
This infusion allows CI to continue investing in approximately 100 venture-backed portfolio companies, primarily in the technology sector.
The funding also allows CI to make new pre-seed and seed venture capital investments during the first half of calendar year 2015.
Finally, the recent infusion allows CI to continue to support important innovation programs that help the state’s companies succeed, such as: loans/guarantees to existing companies looking to innovate or expand; mentor and incubator programs at CT Next (the state’s entrepreneurial ecosystem); and Small Business Innovation Research (SBIR) matching funds.
Q: What are you anticipating in terms of loan/equity demand from Connecticut companies in 2015? Which industry will see the most activity?
A: We anticipate that loan and equity demand from Connecticut companies will continue to be strong during 2015.
During calendar year 2014, CI received more than 692 inquiries for potential investment/funding/financial support.
We expect the current level of activity will continue in the coming year, with strong interest from companies in the areas where Connecticut is strong: biotechnology, medical devices, software and information technology.
On the loan side, we anticipate continued demand from growth-oriented companies that create high-quality jobs in industries where we’ve traditionally had a strong presence, such as manufacturing, wholesale/distribution and various services industries.
How is Connecticut doing in terms of attracting private venture capital? How do we attract more of it?
A: Attracting private venture capital is a critical element of CI’s mission and is certainly a hallmark of our program.
In calendar year 2014 alone, CI’s venture team invested over $20 million in Connecticut startup companies, while attracting over $60 million in additional co-investment from private venture capital funds, family offices and high-net-worth individuals (angel investors).
Attracting more venture capital into Connecticut requires: funding the remaining investment contemplated in the 2011 Jobs Bill, which will enable CI to continue to assist young companies at the scale we have achieved in the last several years and has provided exceptional opportunities for co-investment; continuing efforts, in combination with Connecticut colleges and universities, to reach out to private venture capital firms to showcase advancements in R&D that can become excellent early-stage investment opportunities in the near future; strongly promoting our successes, publicly and in the VC community, to ensure that investors think of Connecticut when looking for opportunities; and continuing the Angel Investor Tax Credit program, which provides high-net-worth individuals the opportunity to invest in Connecticut startups while also receiving a partial Connecticut income tax credit.
Q: What’s the status of the Bioscience Innovation fund? Do you anticipate a lot of activity in 2015?
A: The Connecticut Bioscience Innovation Fund is relatively new — it launched in 2014 — but already it has made tremendous progress. So far, CI’s Bio-Innovation team has reviewed 44 projects, and CBIF has awarded more than $4 million total to five Connecticut universities and four Connecticut companies.
CI’s Bio-Innovation team began extensive outreach in the fourth quarter and is working with Connecticut’s research universities on a number of collaborations. We anticipate a broad range of opportunities from health IT to medical devices to therapeutics and diagnostics in the near future.
