Innovation Destination Hartford met with Matt McCooe, who became Chief Executive Officer at Connecticut Innovations in 2015, and Lauren Carmody, Director of Marketing and Communications, to talk about the many ways CI provides ongoing support for innovative, growing companies throughout Connecticut.
IDH: Tell us about Connecticut Innovations and what you enjoy about your involvement with the organization.
McCOOE: CI’s active portfolio includes 100+ companies with 1,200 employees and we have $30–$40 million per year to invest across the state. There’s a lot of work to be done to help Connecticut get its slope of innovation heading upward.
I’ve always loved startups and I’ve always been fairly ambitious, going after big, significant opportunities wherever I find them. The chance to do what I love—venture capital—and also have a meaningful, societal impact was really compelling for me.
IDH: How is Connecticut Innovations working to improve economic growth in Connecticut?
CARMODY: There are many ways we’re trying to spread our tentacles to help grow the overall innovation ecosystem. A lot of what we do is trying to get new businesses from A to B. We start with them at an early stage. We invest at a time that is pivotal in their growth and then we allow them to get to that next level. We do it through investments—which covers what we do on the venture capital side—then, through CTNext we help with grants, partnerships, and other services.
The CI programs have had a tremendous impact on our state so we’re looking to double down on those efforts and put a little bit more out there to help it grow.
IDH: Can we talk about some of the programs? Let’s start with VentureClash.
CARMODY: VentureClash is Connecticut’s $5 million global venture challenge. The program is truly one of Matt’s brainchildren. He said: We need to expand our efforts, we need to go global, we need to try to find and attract companies here in Connecticut that will have the opportunity to grow.
We spend a lot of time taking care of our current portfolio in Connecticut and supporting the companies here. Matt had this global vision—which was so smart—to say let’s take a look outside to grow our portfolio.
VentureClash is the result of that. It’s a way for us to take our megaphone to a global stage. We’ve done a great job of promoting CI within the state and showing people what we’re able to do. CI is one of the most active early-stage investors in the country. We want to ensure that people know about us globally as well. We have a lot to offer.
This year VentureClash is focused on two industries, digital health and fintech. The companies applying must be in business for at least a year and they must have an active product, so we want them to be past the idea stage. They must have a product they’re testing in beta or with paid customers. Those are the main eligibility requirements.
IDH: And they must have a presence in Connecticut, right?
CARMODY: They have to create and maintain a presence in Connecticut. That’s at the core of what we do at CI. If you’re looking to create a presence in Connecticut, you can do that through this challenge. You can set up a small operation center and establish a beachhead here in Connecticut.
Internationally, I think people are looking to do that. Connecticut happens to be a really good place for those two industries, digital health and fintech, there are definitely companies, partners, and mentors in the state that will be able to help grow those companies.
McCOOE: The impact we’re seeking is to bring more innovation to Connecticut. We want more than homegrown ideas; we want cross pollination from other countries, other cities. The ultimate impact is to stir the pot, create more innovation in our state, bring in good high-paying jobs, and create a more dynamic economy. It’s pretty well understood that the small companies are the ones that are bringing a lot of today’s job growth to Connecticut.
We’re asking the corporate partners we are trying to bring into VentureClash to not just be financial contributors, but to help us define some of the challenges small businesses are facing. Let us be a technology scout to help find tech companies addressing those challenges and then, if we find a company meeting the need, we want the corporate sponsor to do a beta test. We want them to pilot their products. We want them to use the products that we bring to Connecticut because that’s what is going to anchor these companies. It’s going to give them a reason to come to Connecticut, a reason to stay, and the ability to grow in the U.S. market.
If the VentureClash winners can get their first customer here in Connecticut, they will stay here. They can use this as the beachhead from which they do their U.S. expansion. There is no reason why it can’t be Connecticut versus New York or Boston. In fact, we’ve got some advantages over those two cities.
IDH: Tell us about CI’s EdTech Cluster.
McCOOE: I’m excited about this program. Connecticut has some of the best schools in America—not just K through 12, but also higher education. If we can give an edtech company access to customers and help them tap into places like the University of Connecticut, Yale University, Quinnipiac University, Wesleyan University or Trinity College—and all of the other good schools we have here at the higher-ed level, that’s valuable because while early-stage companies need money, what they really need are customers.
Getting that first customer win is difficult. So we are trying to play a role here at CI and CTNext where we build relationships with school systems and facilitate an introduction between the edtech companies and the schools.
What we are going to accomplish in the process is manifold. We want to support the existing edtech companies in Connecticut. We also want to recruit companies to come to Connecticut by giving them a reason to come here.
We’re going to offer pilot programs. School systems and growth-stage companies will be able to apply for a grant from CTNext that will enable them to buy curriculum planning software or coaching tools from early-stage edtech companies. The state will pay the company so we can offer those products and services to school systems at a complimentary rate. So the company is getting paid; they can grow jobs and do what they need to do to succeed.
Successful schools can continue to excel because they’re getting access to cutting-edge, STEM-based learning programs. Schools that are not doing so well, those that simply can’t afford these programs because there’s not enough funding or the parents aren’t in a position to pay for them, will also get access the programs. We’re trying to close the achievement gap for those schools that falling behind.
CI tries to identify Connecticut’s strengths, build on those strengths, and develop programs whereby we give people a reason to come to live and work here.
IDH: Are there any other programs you want to touch on?
CARMODY: We have so many. Through our innovation programming we offer the Technology Talent Bridge Internship (TTBI). The goal is to help small businesses in Connecticut get the assistance they need for short periods of time through interns who, many times, become full-time employees.
The interns go into these companies and they end up staying. So that accomplishes a few things. We keep our young people here and working in Connecticut. We give small businesses additional resources at the time when they most need them. The program also helps strengthen our ties to the universities and keeps our finger on the pulse there. So it’s a win-win-win.
McCOOE: A lot of SB1 [an act concerning innovation, entrepreneurship, and Connecticut’s economic future] is about that too. A lot of the thinking was: How do we keep millennials here in Connecticut? And how do we keep our cities growing?
IDH: Can we talk about SB1? How have you been involved with the act?
McCOOE: We worked extremely closely with Senator John Fonfara and his office in the spring. The bill evolved over time. It was a great collaborative effort between CI and Senator Fonfara’s office. They were listening and they were pulling the best ideas out of the people they were speaking to around the state. They really did their homework. They went out and they spoke to hundreds of people. They said: We are interested in venture capital. We said: Call and talk to these VCs. And they made the calls.
It was gratifying for me going through the political process for the first time, seeing how legislation gets created and passed, and seeing the hard-working people in the legislature. It was fantastic. And I think CI played a role in shaping the ultimate direction of what came into SB1.
It’s a major undertaking for our little organization. We’re not trying to expand CI or CTNext. We’re thinking about how we can strategically deploy our existing resources, take advantage of the private sector, and work with people outside government so they take a leadership position.
IDH: Speaking of leadership, CTNext is building an Advisory Board.
McCOOE: Yes. The Board of CTNext is going to be filled with serial entrepreneurs. We’re going to put a lot on them. We’re going to put a lot on the different communities. There are funding and planning grants to help make Connecticut’s cities more innovative places to live and attract and keep the best people and the best companies. But the cities have to do the work.
And then the advisory board has to be the ones who help adjudicate the cities and the companies we select in our new grant programs. CTNext wants to be the facilitator and the convener, but we want the community to own it from day one.
So it’s about helping plant these gardens and helping foster the growth rather than being the gardeners ourselves. And I think that’s been a big part of what CI has been trying to do—be less bureaucratic and more of a facilitator/convener. We want Connecticut’s residents to feel a sense of ownership of all of our programs so they will come in and help us be successful. Our local talent is by far CI’s greatest asset, we are finding new ways to tap into our talent pool.
IDH: That’s important.
McCOOE: Two other things I want to touch on. One is we collaborated on a grant to the federal Economic Development Administration. UConn won and the effort is now led by Kathy Rocha, Managing Director of UConn’s Entrepreneurship and Innovation Consortium and Dr. Hadi Bozorgmanesh, Professor of Practice at UConn’s School of Engineering. They have set up a new center to help existing established companies get access to innovation and technology resident at UConn.
There’s a second piece on the federal side. CTNext offers grants to support federal Small Business Innovation Research (SBIR) projects. It’s a great way to get proof of concept and a company up and running. Companies that want to apply for SBIR grants can work with us to learn how to write the grant and discuss what kinds of relationships they need to build to have a winning grant.
If the company wins a federal grant, very often it’s not enough money to finish the product or to have anything meaningful at the end. If CI believes in the company’s market potential, we can invest pre-seed funds to support their efforts. In this way, we leverage federal resources, and we stretch each other’s dollars further.
IDH: What other efforts is Connecticut Innovations making to contribute to success in Connecticut?
McCOOE: We’ve started a series of entrepreneur dinners around the state. It was the Commissioner Smith’s (of the Connecticut Department of Economic and Community Development) idea. We are trying to get entrepreneurs to talk to us in the public sector and tell us what they want, what they need, and how we can do more to support them.
We are trying to bring people together. We are connecting people so they can help each other and we’re making mutually beneficial introductions.
CARMODY: That could make a difference for a company.
McCOOE: It could make a huge difference. It’s the difference between success and failure. You can be the most innovative company in the world but if no one knows about you, then you’re dead in the water. In Connecticut, we have people with great networks and relationships and we’re trying to encourage them to share them with our new entrepreneurs. And it’s working.
Learn more about Connecticut Innovations’ programs and initiatives by visiting http://ctinnovations.com.