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Panelists
Dana R. Bucin, Esq. Updike, Kelly & Spellacy
William B. Claffey, Esq. Fiondella Milone & LaSaracina
Funding Sources and Incentives for Investment in Connecticut
Claire R. Leonardi Connecticut Innovations
John Strahley Ironwood Capital
Moderator
Patrick O’Neill, P.E. Director, Investments
Connecticut Innovations
A Second Thursday Event presented by
Crossroads Venture Group
University of Connecticut Health Center (UCHC) Farmington
January 10, 2013
Funding Sources and Incentives for Investment in
Connecticut
Moderator
Patrick O’Neill, P.E. Director, Investments
Connecticut Innovations
Marketing at the Speed of Light
Welcome
Funding Sources and Incentives for Investment in Connecticut
Panelist
Dana R. Bucin, Esq. Updike, Kelly & Spellacy
Marketing at the Speed of Light Funding Sources and Incentives for Investment in Connecticut
Panelists
William B. Claffey, Esq. Fiondella Milone & LaSaracina
Marketing at the Speed of Light Funding Sources and Incentives for Investment in Connecticut
Funding Sources in Connecticut – State Tax Credits
William B. Claffey, Director of State Tax, Credits & Incentives
Fiondella, Milone, & LaSaracina, LLP
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
Funding Sources in Connecticut – State Tax Credits
Dispelling a Myth
– Is Connecticut bad for business?
– State Comparisons
Connecticut Tax Advantages
– Apportionment
– Tax Credits / Incentives
Funding Sources in Connecticut – State Tax Credits
Tax Credits - Generally
– Investment Credits
– Operations Credits
– Hiring / Employment Credits
– Location Driven Credits
– Angel Investor Credit
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?
Funding Sources in Connecticut – State Tax Credits
Helpful Resources
– Information Publication 2010(13)
– www.ct.gov/drs
– www.ct.gov/ecd
– www.fmlcpas.com
Panelists
Claire R. Leonardi Connecticut Innovations
Marketing at the Speed of Light Funding Sources and Incentives for Investment in Connecticut
January 10, 2013
Investing in Connecticut
CI grows businesses and jobs in Connecticut by providing innovative financing and strategic assistance.
Strong Track
Record Expertise
Access to Capital
Talent Advisers Strategic Partners
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
CI Financial Assistance
Equity and Risk Capital Investments
Debt Financing
Small Business Innovation (SBI) Funding & Services
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
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
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
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
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
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
For more information:
www.ctinnovations.com
www.decd.org
Panelists
John Strahley Ironwood Capital
Marketing at the Speed of Light Funding Sources and Incentives for Investment in Connecticut
Private Capital for Growing Businesses
$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
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
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
$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
Investment Experience – 12/31/2012
Victor Budnick, Managing Director
◦ (860) 409-2108
John Strahley, Managing Director
◦ (860) 409-2106
Alex Levental, Director
◦ (860) 409-2109
Mike Benson, Senior Associate
◦ (860) 409-2115
Ironwood Capital Connecticut
Upcoming CVG Events and Closing Remarks
Liddy Karter Executive Director, Crossroads Venture Group
Managing Partner, Enhanced Capital Partners
Marketing at the Speed of Light Funding Sources and Incentives for Investment in Connecticut
THANK YOU CVG SPONSORS
Deal Lead
B Round
THANK YOU CVG SPONSORS
A Round
Venture Capital Sponsors
Professional Service Firms
A Guide to the Digital Media Market University of Connecticut, Stamford 4:30 PM – 7:00 PM
Upcoming Events
February 12
Navigating the FDA: Getting to Market Anylan Center, Yale University, New Haven 4:30 PM – 7:00 PM
March 14
Ask about CVG’s 2013
Boardroom Series
\
CVG 2013 Calendar Offering 60 Events
Attendance to all Second Thursday
events is free for members.
