It’s nice to see that Connecticut’s venture capital area is growing again. Three new funds are planning to make $130 Million in capital for small to medium-sized companies with high-growth potential.
The revised Insurance Reinvestment Tax Credit program provides incentives to insurance companies that invest in high-growth business through state-registered fund managers. These new funds are targeting companies of 250 employees or less and their business base is largely in Connecticut. The capital will be used to develop technology and use that economic development to focus on bioscience.
The fund companies are:
Enhanced Capital Connecticut, launched by Enhanced Capital Partners in New York, run by Liddy Karter. Her company “will identify and underwrite debt and equity investments of up to $3 Million in qualified firms-from seed stage to mature operations.” Her company is looking at “industries ranging from manufacturing, information technology, and healthcare, to business services and green technology.”
Advantage Capital Connecticut Partners, run by Ryan Brennan, managing partner, is based in Missouri and is in partnership with Ironwood Capital in Avon, also in partnership with Ironwood Capital in Avon. Advantage Capital has raised $72 million to invest in about 25 Connecticut companies. Advantage Capital and Ironwood Capital have already invested in eight Connecticut businesses. The draw to Connecticut is revised tax and credit program.
“We took notice … when the state passed the bill to attract money for small businesses,” Brennan said. He also said his group was trying to was $28 Million to start a new fund that he hopes “could be up and running by the end of the year.”
Stonehenge Capital Fund Connecticut started by Stonehenge Capital in Louisiana. Stonehenge Capital Fund Connecticut is run by Jared Talisman, Vice President. Stonehenge recently raised about $35 million. Their focus is in the Biotechnology, Enterprise Software fields in Connecticut.
There are some restrictions to the Insurance Reinvestment Tax Credit program. Twenty-five percent of investments must be made by fund managers and must be directed toward green technology, and three percent must go to pre-seed investments. The concern by industry leaders is that there may be a funding gap.
“That gap exists in part,” according to Liddy Karter, “because there has been a lack of investment opportunities in the state.”
Ryan Brennan said, “Many states are moving aggressively to make more risk capital available to companies, and he believes Connecticut is heading in the right direction.”
