The state venture capital industry is demonstrating signs of life. In the last few months, three new funds have sprung. The plans were to provide additional capital and finances to small and medium enterprises with a possibility of a higher growth rate.
The new funds have been formed courtesy of the revised Insurance Reinvestment Tax Credit Program that was ratified by legislators last year. The specific laws propose higher incentives to insurance firms investing in companies with a higher probability of growth. The new fund’s targets businesses that have less than 250 employees. Most of the companies that will benefit from this program have their workforce primarily residing in Connecticut.
Most businesses in Connecticut have significantly welcomed the move. The business community in this place has profoundly lacked a robust and an early investment base. The stakes are even higher for the Connecticut economic development goals of ensuring an easier growth of bioscience. It is the view of many investors that bioscience will play a significant role in boosting growth and development of the industries.
According to Liddy Karter, the gesture will do more in driving more investment funds to the hands of Connecticut businesses. Liddy Karter is a managing director at Enhanced Capital Connecticut, one of the recently started funds. Her organization has raised over $30 million in two different investment pools.
Karter says that her fund will be very beneficial to upcoming investors and business owners. The primary purpose of the fund being underwriting of debts and equity investments to a tune of $3 million in various qualified firms. The investment will be made stage wise from start to completion. The organization is looking for industries that range from information technology, healthcare, green technology, business technology and healthcare.
In addition to Advantage Capital under leadership of Ryan Brennan, Enhanced Capital has finally finalized a deal with its first business, the New Haven-based software analytics company, the Hadapt Inc. The firm operates in Science Park, New Haven.
The rationale behind these funds is to enhance and facilitate the growth of companies and industries. If the businesses are not in a position to acquire the much-needed resources, then they will neither grow nor move out of the state. And the interesting part, Karter feels that there is enough venture capital in Connecticut. The only challenge is that most people with the money are not willing to invest in Connecticut. A gap still exists in the market due to unavailability of funds, while the venture capital may not completely cure the problem, it will provide much-needed capital to small organizations.