As entrepreneurs and financiers thumb through new opportunities under the federal JOBS Act ”“ and as Congress introduced a new bill dubbed Startup Act 2.0 ”“ Connecticut has unleashed a flood of new funding promised by Gov. Dannel P. Malloy under his own jobs bill last fall.
Near the end of May, Startup Connecticut co-founder Danny Briere said the state was on the cusp of releasing new funding via Connecticut Innovations, intended to jumpstart technology startups, and that “things will start to happen.”
Startup Connecticut convened a panel discussion late last month at the new Stamford Innovation Center startup incubator, with U.S. Rep. Jim Himes on hand to field questions about the new JOBS Act, which among other measures allows for crowdfunding of startups outside the realm of venture capital. A proposed Startup Act 2.0 would create a research and development tax credit for startups, worth up to $250,000 or 20 percent of W-2 wages.
Malloy is channeling state funding to the market via Connecticut Innovations, a quasi-state entity, while looking to boost services for entrepreneurs through a budding network of business incubators to include the Stamford Innovation Center.
At the JOBS Act panel, one venture capitalist voiced support for the state”™s renewed push on entrepreneurship, but questioned the strategy of parsing out funding through a state-backed entity like Connecticut Innovations.
“Other states like Indiana, Illinois and others have matching programs,” said Geoff Schneider, founder and managing partner of Cava Capital in Wilton. “They took the $250 million that we just took in essence for Connecticut Innovations, and they spread it out across other managers. They said, ”˜Look, we”™re not going to be in the business of sourcing deals and we”™re not going to be in the business of (choosing) which deals to do. What we want to do is make sure we believe in (venture capitalists) and do the due diligence on you, the firm. If you do the deal, we will match that deal ”“ no questions asked, up to a certain level.”™
“I don”™t get paid for that, and I don”™t make any money on that,” Schneider said. “But it brings (in) capital, and that”™s a huge, huge way to get things flowing.”
Still, Schneider supported Connecticut”™s overall efforts, saying the seeds were planted more than a decade ago for what has become a dynamic digital media startup environment in New York City, which the Stamford Innovation Center and others hope to replicate here.
Several in attendance said Connecticut still struggles with a sleepy reputation, however, in comparison with the far larger startup communities in Boston and New York City.
Leonora Valvo, CEO of the Norwalk-based event software startup etouches, said the state badly needs the buzz that the state is looking to foster.
“The feedback we get from these kids is that it doesn”™t occur to them that the kinds of business like etouches and others are here,” Valvo said. “The reality is they don”™t think of (Connecticut) as an incubator of startups and opportunity.”
