April 30, 2012 | last updated June 1, 2012 2:11 pm

CI boosts investment efforts

As Claire Leonardi takes over a revamped Connecticut Innovations, she'll have an expanded economic development tool box to work with, probably the most comprehensive resource package the organization has ever had.

The October Jobs Bill passed by the state legislature allocated $125 million to Connecticut Innovations, which, in recent years, has funded its own operations with investment returns as state funding dried up.

But that is not the case anymore. Over the next five years, CI plans to invest $250 million.

"We are ramping up growth and doing more deals," Leonardi said.

Among the new initiatives is creating an Innovation Ecosystem that aims to encourage entrepreneurs to build new start-up companies in Connecticut. It will include accelerators and "entrepreneur clubhouses" that will help raise funds to invest in start-ups. It will also develop venture competitions, mentor networks, and talent matching services.

CI is also working on "innovation hubs'' that will develop approaches to help promising companies or ideas grow through mentorship, training, connections, commercialization assistance and a community of entrepreneurial peers.

On the investment side, the goal is for CI to hit $50 million a year in new investments. That would be a major jump from the company's recent experience.

In 2011, for example, CI financed about 40 deals for a total of $13.1 million.

Leonardi said the $50 million threshold likely won't be reached in year one, but the quasi-public agency is working to try to build that investment pipeline. Just because there is new funding doesn't necessarily mean there will be enough good, promising ideas or start-ups to finance.

Leonardi said the goal is to capture promising early stage opportunities and bring them to the commercialization stage. That is why the state's higher education institutions, like Yale and UConn, will play such a pivotal role in developing a strong tech sector in Connecticut.

At the same time, throwing money at random companies won't stretch out CI's fresh capital to make much of an economic impact. It's a fine line that must be walked.

"It's a matter of not compromising investment criteria and just being disciplined," Leonardi said.

The expanded investment programs include:

• $4 million per year for CI's pre-seed program, which offers loans to support the formation of new Connecticut technology companies;

• $22 million per year for seed stage and Series A investments, which help entrepreneurs grow existing businesses, and for follow-on investments in CI portfolio companies;

• $6.5 million per year for a newly developed loan program, which provides growth and working capital for technology companies;

• $7 million per year for the recruitment of emerging technology companies nationally and internationally. CI plans to work with the Department of Economic and Community Development (DECD) and other state agencies to design a relocation incentive package, similar to the governor's "First Five" initiative;

• $4 million per year to help Connecticut companies capture more of the federal Small Business Innovation Research (SBIR) funds each year, as well as increase industry partnerships and the state's technology talent pipeline;

• $4.8 million per year to establish technology business accelerator hubs, which will provide support services to startups, and to create a corporate technology transfer initiative.


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