Funding Sources and Incentive for Investment in Connecticut - CVG Second Thursday, 1/10/13
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This document summarizes a panel discussion on funding sources and incentives for investment in Connecticut. The panelists represented various state programs, a private investment firm, and a law/accounting firm. They discussed state tax credits, grants, loans, and equity investments available from Connecticut Innovations and the Department of Economic and Community Development. The private investment firm described their debt and equity investments in Connecticut companies. The law/accounting firm overviewed various state tax credits for businesses. The event concluded with announcements of upcoming networking events from the hosting organization.
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Funding Sources and Incentive for Investment in Connecticut - CVG Second Thursday, 1/10/13
- 1. Funding Sources and Incentives for Investment in Connecticut Moderator Patrick O’Neill, P.E. Director, Investments Connecticut Innovations Panelists Dana R. Bucin, Esq. Claire R. Leonardi Updike, Kelly & Spellacy Connecticut Innovations William B. Claffey, Esq. John Strahley Fiondella Milone & LaSaracina Ironwood Capital
- 2. Funding Sources and Incentives for Investment in Connecticut A Second Thursday Event presented by Crossroads Venture Group January 10, 2013 University of Connecticut Health Center (UCHC) Farmington
- 3. Funding Sources and Incentives for Marketing at the ConnecticutLight Investment in Speed of Welcome Moderator Patrick O’Neill, P.E. Director, Investments Connecticut Innovations
- 4. Funding Sources and Incentives for Marketing at the ConnecticutLight Investment in Speed of Panelist Dana R. Bucin, Esq. Updike, Kelly & Spellacy
- 5. Funding Sources and Incentives for Marketing at the ConnecticutLight Investment in Speed of Panelists William B. Claffey, Esq. Fiondella Milone & LaSaracina
- 6. Funding Sources in Connecticut – State Tax Credits William B. Claffey, Director of State Tax, Credits & Incentives Fiondella, Milone, & LaSaracina, LLP
- 7. Funding Sources in Connecticut – State Tax Credits FML, LLP Firm Overview: – Regional accounting firm headquartered in Glastonbury with satellite offices in Stamford, New Haven and Bristol – Founded in 2002 when 3 founding partners broke away from a national firm; currently 8 partners – Strong focus on providing audit and tax services to high- growth venture capital back companies. – PCAOB registered with growing SEC practice – Strong Accounting and Tax Consulting Services
- 8. Funding Sources in Connecticut – State Tax Credits Dispelling a Myth – Is Connecticut bad for business? – State Comparisons Connecticut Tax Advantages – Apportionment – Tax Credits / Incentives
- 9. Funding Sources in Connecticut – State Tax Credits Tax Credits - Generally – Investment Credits – Operations Credits – Hiring / Employment Credits – Location Driven Credits – Angel Investor Credit
- 10. Funding Sources in Connecticut – State Tax Credits Tax Credits – What if I can’t use them? – Refundable Credits – Transferable Credits – Value to the financial statements Dealing with DRS/DECD Questions?
- 11. Funding Sources in Connecticut – State Tax Credits Helpful Resources – Information Publication 2010(13) – www.ct.gov/drs – www.ct.gov/ecd – www.fmlcpas.com
- 12. Funding Sources and Incentives for Marketing at the ConnecticutLight Investment in Speed of Panelists Claire R. Leonardi Connecticut Innovations
- 13. January 10, 2013
- 14. Investing in Connecticut CI grows businesses and jobs in Connecticut by providing innovative financing and strategic assistance. Access to Capital Strong Expertise Track Record Strategic Talent Advisers Partners
- 15. CI brings together best practices to grow innovative businesses Support high-growth small businesses – financing, active engagement, connections Help existing businesses innovate to grow and sustain market position Foster an entrepreneurial environment Leverage outside support Promote collaboration Historically self-sustaining VC program -- 18%+ gross IRR; invested $210 million; leveraged over $1 billion in private capital Loans -- $750 M loans; leveraged with $1.9 B from private- sector partners 15
- 16. CI Financial Assistance Equity and Risk Capital Investments Debt Financing Small Business Innovation (SBI) Funding & Services
- 17. Equity and Risk Capital Startup Support □ TechStart Fund □ Pre-Seed Fund □ Seed Investment Fund Eli Whitney Fund – flagship fund Venture & Mezzanine Debt Fund Bioscience Facilities Fund Connecticut Clean Tech Fund
- 18. Small Business Innovation Supporting innovation, promoting collaboration and fostering an entrepreneurial environment in Connecticut through a variety of exciting initiatives: Business counseling and strategic evaluation Guidance on finding and obtaining resources and creating collaborative partnerships Talent development and retention 18
- 19. Other Tech Initiatives CTech - technology business incubators Angel Investor Tax Credit Program Innovation Ecosystem Connecticut Stem Cell Research Program The Jackson Laboratory facility at UConn Health Center
- 20. Debt Financing Financing from $25,000 to $5 million Initiatives: □ Direct loans □ Loan Guarantee Program □ Participation loans □ URBANK Capital Access Program □ Information technology financing □ Brownfields redevelopment financing Financing support through collaborations with network of lending institutions statewide
- 21. DECD Financial Assistance First Five Program □ Large scale projects □ Requires creation of 200 full-time jobs over 2 years or investment of more than $25 million plus 200 jobs over 5 years Direct loans □ Low interest and flexible □ May include forgiveness for reaching predetermined job creation goals Tax credit programs □ Job Expansion Tax Credit □ Urban and Industrial Site Reinvestment Credit □ Film Production and Digital Media Tax Credit □ Enterprise Zone Program □ Sales and Use Tax Exemption □ Municipal Property Tax Abatement
- 22. Small Business Express Program Goal and requirements □ To provide capital to “Main Street” businesses with < 100 employees to help create jobs □ Must be a CT company that has been in operation at least 1 yr Types of assistance □ Revolving loan fund ($10,000 to $100,000) □ Matching grant program ($10,000 to $100,000) □ Job creation loan fund ($10,000 to $300,000) Uses: machinery and equipment, construction, leasehold improvements, training, working capital and other business related expenses Terms □ Up to 4% interest and maximum 10-year term □ DECD determines loan terms, conditions, and collateral requirements in a manner that prioritizes job creations
- 23. For more information: www.ctinnovations.com www.decd.org
- 24. Funding Sources and Incentives for Marketing at the ConnecticutLight Investment in Speed of Panelists John Strahley Ironwood Capital
- 25. Private Capital for Growing Businesses
- 26. $93.0 million unit of Ironwood Capital, a 25-year old, $600+ million investment manager based in Avon, Connecticut All investment capital provided by insurance companies doing business in Connecticut; formed as a Connecticut Insurance Reinvestment Fund Focused on and experienced in making a broad range of debt and equity investments in early-stage through mature Connecticut companies
- 27. Business must be based in Connecticut Must have fewer than 250 employees Must have less than $10 million of net income 80% of the employees must be Connecticut residents Strong growth potential Ability to service debt Identified exit strategy
- 28. We invest between $1 - $10 million of capital in later-stage growth and cash flowing companies to: ◦ Support organic growth ◦ Make acquisitions ◦ Augment existing capital providers ◦ Refinance existing debt We can provide more flexible terms and conditions than many traditional sources of capital: ◦ Fixed and variable interest rates ◦ Flexible amortization tailored to meet business needs ◦ Streamlined process ◦ Pragmatic underwriting
- 29. Investment Experience – 12/31/2012 $48 million invested in 24 Connecticut companies Investment types: ◦ 80% Debt ◦ 20% Expansion Equity & PreSeed Investments Broad Industry Representation: ◦ Manufacturing ◦ Information technology ◦ Business Services ◦ Environmental Services ◦ Green Tech and Clean Tech
- 30. Ironwood Capital Connecticut Victor Budnick, Managing Director ◦ (860) 409-2108 ◦ Budnick@ironwoodcap.com John Strahley, Managing Director ◦ (860) 409-2106 ◦ Strahley@ironwoodcap.com Alex Levental, Director ◦ (860) 409-2109 ◦ Levental@ironwoodcap.com Mike Benson, Senior Associate ◦ (860) 409-2115 ◦ Benson@ironwoodcap.com
- 31. Funding Sources and Incentives for Marketing at the ConnecticutLight Investment in Speed of Upcoming CVG Events and Closing Remarks Liddy Karter Executive Director, Crossroads Venture Group Managing Partner, Enhanced Capital Partners
- 32. THANK YOU CVG SPONSORS Deal Lead B Round
- 33. THANK YOU CVG SPONSORS A Round Venture Capital Sponsors Professional Service Firms
- 34. Upcoming Events February 12 A Guide to the Digital Media Market Ask about CVG’s 2013 University of Connecticut, Stamford 4:30 PM – 7:00 PM Boardroom Series March 14 Navigating the FDA: Getting to Market Anylan Center, Yale University, New Haven 4:30 PM – 7:00 PM
- 35. CVG 2013 Calendar Offering 60 Events Attendance to all Second Thursday events is free for members.