Late this morning, Connecticut Innovations hosted a press conference at the Legislative Office Building in Hartford, where we unveiled a study that assesses the economic impact of CI’s investments in its portfolio companies from fiscal years 1995 through 2008. Members of the media listened to remarks from CI’s chair, Joan McDonald; long-time legal adviser to high-tech companies, Frank Marco, partner at Wiggin and Dana LLP; the CEO of CI portfolio company Continuity Engine, Andrew Greenawalt; and me.

It was a pleasure to convey uplifting news about CI’s long-term performance. Despite two serious economic downturns during the 14-year period covered by the study, CI made significant contributions to Connecticut’s economy. Our investments in early-stage companies – our portfolio companies – enabled many of these firms to grow and provide employment opportunities and tax revenues that would otherwise not have existed.

Here are a few of the key findings of the study:

• CI Creates Jobs – CI’s investments grew Connecticut employment by an average of 1,610 jobs each year during the study.
• CI Contributes to State Tax Revenues – The cumulative, net state revenue generated exclusively by CI’s investment activity exceeds $209 million. This represents an average increase of $14.9 million in net state revenue every year.
• CI Brings Additional Outside Investment into Connecticut – Connecticut’s cumulative investment in CI of $106 million leveraged an additional $1 billion from CI’s investment partners over the period studied.

We are proud of these accomplishments and intend to continue to be a leader in the technology community – identifying promising entrepreneurial businesses, providing the right support and leveraging capital from other sources.

Here is a link to our press release about the study, “The Economic Impact of Connecticut Innovations’ Portfolio on the Connecticut Economy.”

Peter Longo
President and Executive Director

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Posted under Message from the President

Andy Cars, a guest blogger on the ArcticStartup blog, is “right on the money” with advice for entrepreneurs in his blog post titled “10 Mistakes Entrepreneurs Often Make When Raising Capital,” dated December 11, 2009. Andy is the CEO of Seedcap, a Swedish business advisory firm that helps startup companies grow and raise capital.

Like Andy, Connecticut Innovations has reviewed hundreds of business plans and listened to countless business pitches from entrepreneurs who are seeking startup capital. Over our 20-year history, we have seen examples of each and every one of the 10 mistakes that he highlights and would encourage the next generation of entrepreneurs to keep this list handy and give it due consideration before raising capital.

This blog post is a quick read and worthwhile…Here is a link.

Peter Longo
President and Executive Director

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Posted under Message from the President

The Kauffman Foundation recently completed a survey of 549 successful entrepreneurs, probing for information about factors that influence the success of entrepreneurs. Some of the foundation’s findings are rather predictable, but others might surprise readers.

For anyone interested in entrepreneurship, the foundation’s report titled “The Anatomy of an Entrepreneur: Making of a Successful Entrepreneur” is a “must read.” See if you agree/disagree with the conclusions.

Here is a link to a December 6, 2009 blog post in About.com summarizing the seven key factors for successful entrepreneurship that are detailed in the Kauffman Foundation report. 

Here is a link to the Kauffman Foundation’s report: “The Anatomy of an Entrepreneur: Making of a Successful Entrepreneur.”

Peter Longo
President and Executive Director

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Posted under Message from the President

What can we learn about entrepreneurship from Israel? Potentially, quite a bit. Check out this recent blog post on the Matisyahu (Jewish/Israeli) Blog. If you scroll to the bottom, you will find a short video clip that highlights some reasons why Israel has weathered the global economic downturn so well and sustained a dynamic, entrepreneurial economy. The video clip captures the October 28, 2009, CNBC/Squawk Box interview of Dan Senor, senior fellow of Middle Eastern Studies at the Council on Foreign Relations and co-author of the book “Start-up Nation: The Story of Israel’s Economic Miracle.”

Here is a link to the blog post and video clip.
 

Peter Longo
President and Executive Director

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Posted under Message from the President

On Wednesday, CI’s president and executive director, Peter Longo, was on a panel sponsored by the Connecticut Venture Group (CVG) and the Connecticut Chapter of the Association for Corporate Growth (ACG Connecticut), titled “Investing in Alternative Energy.” Also on the panel were three companies working in the alternative energy arena: Fuel Cell Energy, Connecticut’s premier fuel cell company; Reflexite, a diversified optics company with ties to the solar thermal and solar PV markets; and FlowDesign Wind Turbine Inc., the newcomer, which will close on a Series B round in excess of $35 million. 

In general, the mood around clean tech investing was upbeat. FlowDesign’s ability to attract investors signals that the market’s interest in clean tech is strong; market investors are following up their words with money. Additionally, Peter Longo pointed to another recent event that he believes bodes well for clean tech companies. A123, an eight-year-old battery company located in Watertown, Massachusetts, had its IPO in September. The significance is that A123 was losing money, yet the market was still interested, and to date the stock is doing fairly well. Also of note is that there are several other clean tech companies looking to go public, and if the market continues to stay strong, clean tech could provide what so many other sectors cannot seem to find lately: an exit. 

Patrick O’Neill
Investment Associate

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Posted under Tech Community / VC World

Members of the UCONN Student Entrepreneurial Organization

On Friday, October 30, the UCONN Student Entrepreneurial Organization (SEO) traveled to Rocky Hill to learn about Connecticut Innovations’ operations. Members heard from CI’s Charlie Moret, Peter Longo, Patrick O’Neill, Dan Wagner and Pauline Murphy, as well as Jessica Schweitzer, CEO & founder of Campus Connect, a company that CI supports with guidance and resources.

After Charlie and Peter’s introduction, Jessica told us about her interests in entrepreneurship and how a class on entrepreneurship at Central Connecticut State University gave her the inspiration for her venture, Campus Connect. Still in its early stages (the pilot launched on October 20), Campus Connect was started following many revisions of the business plan. Jessica’s determination has paid off, and she provided SEO members with some valuable advice, such as:

• Ensure that there is a need for your business.
• Know your competitors and stay up to date in your field.
• Realize that there will not be a paycheck for a while.
• Have a presence in the market and be personally involved in the company.

Next we heard from Patrick, an investment associate who makes investments in renewable energy and clean technologies through the Connecticut Clean Tech Fund. He explained that this area of business can be difficult, as it is capital intensive and requires large amounts of cash to generate sales, abide by regulations and manufacture clean energy products. He said that when CI invests in companies, a term sheet is created; usually the terms involve some debt, preferred equity and oversight through board seats.

Every member of SEO was impressed as Dan, an investment associate who works with companies in health care, described Soft Tissue Regeneration Inc. This CI portfolio company has developed a braided fiber that helps to regenerate anterior cruciate ligament (ACL) cells. Dan also spoke of the importance of who you know, as well as the importance of having a passionate team that knows when to seek outside help.

Pauline echoed some of what Dan was saying by stressing how important it is for entrepreneurs “to know what you don’t know.” Pauline also spoke about the difficulties involved with getting founders to see that the best way to grow a company may be under the direction of someone else.

After a Q&A session, the UCONN SEO left knowing that CI is truly a unique venture capital firm – a public corporation that operates like a private company.

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Posted under Tech Community / VC World

According to the National Venture Capital Association’s (NVCA’s) Venture Impact report released last month, “venture-backed companies outperformed the overall economy in terms of creating jobs and growing revenue.”  Here in Connecticut in 2008, venture-backed companies employed 141,539 people and pulled in $39 billion in revenue.

Mark Heesen, president of NVCA, postulates that one reason for the success of venture-backed companies is the guidance they receive from venture capital investors.

“Venture investors instill their portfolio companies with a number of key cultural practices and traits that keep them growing over the long term.  These include: an appreciation for continuous R&D, the habit of setting and reaching milestones, strong corporate governance practices, the ability to pivot in uncertain markets and adjust business plans when needed, and a global approach to operations.  These tenets drive companies during their formative years with venture backers and remain integral parts of their DNA long after – often enabling them to grow faster and longer than their non-venture counterparts.”  – Mark Heesen

The report, which is updated every two years, certainly makes a strong case for sustaining and strengthening venture capital investment activity here in Connecticut and across the nation. 

Read more about the economic impact of venture capital and venture-backed companies in NVCA’s Venture Impact report. 

Peter Longo
President and Executive Director

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Posted under Message from the President

Connecticut’s first comprehensive economic strategic plan, announced last week by Governor Rell, includes a number of recommendations that would expand Connecticut Innovations’ role, initiatives and resources, allowing us to further support the growth of the state’s technology community. This is good news for CI and the emerging companies we serve.

I would encourage you to review, in particular, pages 302 and 531-536 of the report, where CI-related recommendations are noted. 

While the plan has been publicly posted on the Department of Economic and Community Development’s website, Governor Rell is seeking additional input from business stakeholders and legislators and has directed DECD to hold a second round of public meetings. The second round of public meetings is being held because of the economic events that have taken place since the original input was gathered in 2007.

Check DECD’s website for a listing of dates and locations of the public meetings.    

Peter Longo
President and Executive Director

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Posted under Message from the President

If you are launching a business and operating on a limited budget, you may want to read this article.  A fellow investor recently brought it to my attention, noting that it contains some good advice.  I agree.  The article, which appeared in the May 2009 issue of Entrepreneur magazine, offers entrepreneurs who are unable to raise money tips on bootstrapping. 

Here is a link to the article, entitled “10 tips for successful bootstrapping.”

Peter Longo
President and Executive Director

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Posted under Message from the President

Oil Purification Systems (OPS) is on a roll. Not only was the company’s product recently dubbed the 2009 Best Available Environmental Technology, but Governor Rell and Connecticut Innovations announced this week that OPS has received CI’s first investment through the Connecticut Clean Tech Fund.

With this investment, the Connecticut Clean Tech Fund has now officially “lifted off.” We are delighted that such a deserving company is the first client of the fund. OPS boasts a remarkable engine oil cleaning technology and growing customer base.

There are a number of additional clean tech investment opportunities in our pipeline – and we are in the process of evaluating them. We are hopeful that many will warrant investments from the fund and bring to market worthwhile new innovations that conserve energy and resources, protect the environment or eliminate harmful waste.

Read more about the Connecticut Clean Tech Fund and this investment in OPS in press releases from the governor’s office and CI.

Peter Longo
President and Executive Director

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Posted under Message from the President