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September 23, 2014

CT Innovations hits funding gap, delays programs

Pablo Robles Connecticut Innovations CEO Claire Leonardi.

Connecticut Innovations, the state’s quasi-public venture capital and lending arm, has put on hold its key investment and entrepreneurial programs until early next year because it doesn’t have the state funds to cover additional commitments, a spokeswoman confirmed Tuesday morning.

Lauren Carmody said that CI is running low on money because the Bond Commission has canceled several recent meetings, in which they were scheduled to allocate more funding for the state’s quasi-public venture capital. 

“It’s certainly something we’re not used to,” Carmody said.

The shortfall was first reported Monday evening by Kevin Rennie on his Daily Ructions blog.

Carmody said the shortfall has nothing to do with the performance of CI’s current investment portfolio.

She said CI has ramped up its investment under the state’s 2011 jobs bill, which contained a five-year authorization of $125 million for startup companies. Of the amount authorized, $105 million remains, she said. CI had hoped to get $50 million of that amount approved by the commission this month, but now will not, she said.

“The jobs bill tasked us to make investments in growing companies and that’s what we did,” she said. “We wouldn’t have gone out and doubled investments if it weren’t for jobs bill funding.”

She said CI has been in touch with the commission, with which it shares several board members, as well as Gov. Dannel Malloy, who chairs the commission.

But she couldn’t offer any insight as to why the Democrat-controlled commission has left CI in the lurch.

Asked if it had anything to do with the upcoming gubernatorial election, Carmody said she didn’t know.

CTNewsJunkie reported in July that the state had nearly borrowed enough to hit a $1.8-billion cap set by Malloy at the start of the year. The commission canceled six meetings in 2013 when nearing the cap, CTNewsJunkie reported in February.

Malloy spokeswoman Andrew Doba said in an email just after noon on Tuesday that CI has more than $20 million in cash on hand and will realize "significant revenues" in the coming weeks and months from non-bond sources.

"[CI] has always been careful about its future commitments of public investment resources, and now is no different," Doba wrote. "Governor Malloy has and will continue to support CI in its critical mission."

Asked specifically about the cancelled meetings, Doba said: "We schedule Bond Commission meetings as needed."

Carmody said CI is funding its existing commitments, including investments and loans already promised to companies. CI is also meeting payroll.

The agency, however, notified contractors for its CTNext program on Monday evening that there would be payment delays until January.

CTNext offers incubator and advisory services to startup companies.

An October award of CTNext startup grants, known as entrepreneur innovation awards, will go on as scheduled, Carmody said.

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Claire Leonardi: CT must build on CI's gains

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