Tech Companies to Watch

Nine Entrepreneurial Teams Selected to Participate in TechStart Fund Accelerator Pilot Program

Teams to receive total of $225,000 to help create and launch new technology businesses

Connecticut Innovations (CI), the state’s quasi-public authority responsible for technology-based economic development, today announced that it has selected nine entrepreneurial teams to receive $25,000 each in financial assistance from the TechStart Fund and participate in the fund’s 10-week accelerator pilot program. The winning teams were selected from a pool of 33 applicants. Five of the winning teams involve current students or recent graduates of Connecticut universities including Quinnipiac, UConn and Yale. One team includes a 14-year-old entrepreneur and two are licensing technologies from universities (Columbia and Yale).

Teams Selected:

Applivate (New Haven) 
Dealizio (Niantic)
eBrevia (Stamford)
MeritBooster (New Haven)
My Luck Club (New Canaan) 
Red Ox Technologies (New Haven) 
Scaled Liquid Systems (New Haven) 
Seldera (New Haven)Snippet (Hamden)

Launched in January, CI’s TechStart Fund was created to spur technology innovation and business formation by providing initial capital of $25,000 to entrepreneurial teams. The intent of the funding is to allow startups to pursue the viability of a technology concept or business and determine whether additional funding might be obtained to launch a business.

The initial nine teams selected for funding will participate in a 10-week TechStart accelerator pilot program commencing March 5. The program will provide the teams with mentors, professional resources and guidance in launching a new business. At the conclusion of the program, each team should be ready to launch a company and will be provided with the opportunity, in mid-May, to make a pitch to a group of investors. 

“The interest in our new TechStart Fund has been overwhelming,” said Claire Leonardi, chief executive officer and executive director of CI. “We are excited that so many entrepreneurial teams applied to the fund and are pleased to support such a diverse group of new ventures. By combining funding with concentrated and focused guidance, we will ensure that these teams have the best chance to turn their new business concepts into successful tech-based companies – Connecticut’s companies of the future.”

About Connecticut Innovations Inc.
Connecticut Innovations (CI) is a quasi-public organization dedicated to driving a vibrant, entrepreneurial, technology-based economy in Connecticut. CI stimulates high-tech growth by investing in early-stage Connecticut technology companies, university/industry research collaborations and technology transfer and collaborating with government, business, nonprofit and academic organizations to advance technology growth and promote public policies consistent with CI’s mission. For more information on CI, please visit www.ctinnovations.com.  

 

CT Angel Investor Tax Credit, FAQ's for Businesses & Investors (Update!)

Click Here for an Up-to-Date List of Qualified Connecticut Companies

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The forms:
Qualified Connecticut Business Application ($250- non-refundable fee to apply)

Angel Investor Certification/Request for Tax Credit Reservation Form 

What is the Connecticut Angel Investor Tax Credit?

Included in the recently passed Bill 5435, Public Act No. 10-75, is the Angel Investor Tax Credit.  It allows angel investors who invest at least $100,000 in a Connecticut start-up business in approved sectors to receive an income tax credit equaling 25% of their investment. 

Who administers the Angel Investor Tax Credit?

Connecticut Innovations Inc. administers the tax credit under the guidelines put forth in Public Act No. 10-75.

Who qualifies as an Angel Investor?

An angel investor is an "accredited investor" under Security and Exchange Commission (SEC) guidelines. A group or network of such investors also qualifies.

The following do not qualify as angel investors:

• Investors who control more than 50% of the company receiving the investment
• A venture capital company
• "Any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are a part of its normal course of business"

What businesses qualify for angel investment?

The business must:

• Engage in bioscience, advanced materials, photonics, information technology, clean technology, or an emerging technology, as determined by the Department of Economic and Community Development (DECD) commissioner.
• Have its principal place of business in Connecticut.
• Have gross revenues under $1,000,000 in its most recent income year.
• Have fewer than 25 employees, at least 75% of which must be Connecticut residents.
• Have operated in Connecticut for less than 7 consecutive years.
• Have received less than $2,000,000 in eligible angel investments.
• Be primarily owned by the business' managers and their families.
• Have been identified by Connecticut Innovations (CI) as eligible for angel investment.

Are there limitations on the credit amount?

Angel Investors may not receive a credit larger than $250,000.  The credit cannot exceed the total income tax owed by the investor for that year.  Furthermore, the Commissioner of Revenue Services may not reserve an aggregate amount of tax credits for all investors that exceeds $6,000,000 per year for fiscal years 2011 and 2012 and $3,000,000 for every subsequent year until fiscal year 2019 when authorization for the tax credit expires.

Are there limitations on what can be done with the credit?

The credits cannot be transferred to other taxpayers. 

How does a business apply to receive investment credits?

CI maintains a list of business that have applied and have been approved by CI to receive investments. The bill requires that CI's executive director compiles the list, which categorizes businesses by the amount of cash investment sought and the type of qualified securities they offer, monthly.  The list is then made available to angel investors.  In order to apply for inclusion on this list, a business must provide the following:

1. Its name and a copy of its organizational documents.
2. A business plan describing the business and its management, product, market, and financial plans.
3. A description of its innovative and proprietary technology, product, or service.
4. A statement of its potential economic impact, including the number, types, and location of jobs it expects to create.
5. A description of the qualified securities it offers, their cost, and the amount of cash investment sought.
6. The amount, timing, and projected use of the proceeds from the sale of these securities.
7. Any other information CI may require.

How does an investor access the credits?

 An investor must first apply to CI to reserve tax credits.  At this time the investor must identify the business to be invested in and the amount that is planning on being invested.

When can the credit be claimed?

Investors must claim the credit in the same year that he or she invested the funds; however, unused credits may be carried forward for up to 5 years.

For complete information:

See the full Public Act No.10-75 text.

See the Bill 5435 analysis.

See Connecticut Innovations Inc. (CI)  

To apply for the tax credit as an investor, or to get your company approved for investor credits, visit: www.ctangeltaxcredit.com.  From this site, a business may apply to become a “qualified business” thereby establishing it as eligible to receive angel investments.  Angel Investors may complete the Angel Investor Certification/ Request for Tax Credit Reservation Form available on the Web site in order to make eligible investments in qualified businesses.

For additional information about the Angel Investor Tax Credit Program please contact Stepheni Harpin, Investment Analyst at [email protected]

 

$1 Million TechStart Fund Launched to Spur Technology Innovation and Business Formation

Connecticut Innovations (CI), the state’s quasi-public authority responsible for technology-based economic development, today announced that it has launched the TechStart Fund, which was created to spur technology innovation and business formation at an early stage. The TechStart Fund is one of several new initiatives slated to be launched under CI’s recently announced plan to deploy $250 million over the next five years.

The TechStart Fund provides initial capital so that startup teams can determine the viability of a technology business and whether funding would be available to launch the new business. Supporting the TechStart Fund is a 10-week pilot program during which teams approved for funding will be provided with mentors and professional resources offering strategic guidance in launching a new business.

“We look forward to working with a wide range of high-tech entrepreneurs under the TechStart Fund,” said Peter Longo, president and executive director of CI. “We’ve had great success in supporting student-led ventures in recent years and hope to encourage more students, as well as other entrepreneurs, to test the waters with new business concepts through TechStart.”

The pilot program supporting the TechStart-funded teams will be directed by CTech@Science Park at Yale in New Haven and begin in March 2012. The application deadline for that initiative is February 22, 2012.

At the conclusion of the program, participating teams should be ready to make a pitch to investors and launch a company.

Longo added, “The TechStart Fund will complement and support programs to be offered under the state’s exciting, new Innovation Ecosystem initiative. Entrepreneurial teams participating in any technology business accelerators started within the ecosystem’s innovation hubs will have the opportunity to obtain critical startup funding through the TechStart Fund. In many cases, this will be the very first funding received by these emerging ventures.”
 

About Connecticut Innovations Inc.
Connecticut Innovations (CI) is a quasi-public organization dedicated to driving a vibrant, entrepreneurial, technology-based economy in Connecticut. CI stimulates high-tech growth by investing in early-stage Connecticut technology companies, university/industry research collaborations and technology transfer and collaborating with government, business, nonprofit and academic organizations to advance technology growth and promote public policies consistent with CI’s mission. For more information on CI, please visit www.ctinnovations.com.  

 

Connecticut Innovations Announces Approval of Plan to Deploy $250 Million in New Funding

CI to Expand Programs for Entrepreneurs and Recruit Out-of-State Startups

Connecticut Innovations (CI), the state’s quasi-public authority responsible for technology-based economic development, today announced board approval of a plan to deploy $50 million per year, over five years, consisting of $25 million per year from the state of Connecticut, along with a matching $25 million per year over the same period from CI itself. The plan calls for CI to recruit early-stage, high-potential companies from other states, leverage its knowledge of the technology industry and investment community to attract outside investment to match CI funds, and utilize its expertise to expand existing initiatives and launch new initiatives to invigorate Connecticut’s emerging technology sector, bolstering further CI’s record of success.

$125 million in new funding from the state was included in Governor Malloy’s jobs bill, which was signed into law in October 2011. CI’s plan is to match this state funding for each of the next five years with its existing cash and funding from its investment returns.

“Connecticut Innovations has a proven ability to accurately assess the needs of entrepreneurs, and to respond to those needs with programs that reflect today’s economic challenges and opportunities. CI’s capabilities are essential to the success of the technology sector in Connecticut,” said Governor Dannel P. Malloy. “Adding to their tool kit and providing more funding will allow the organization to accelerate its success in creating jobs and growing Connecticut’s economy.”

Included in the plan is:

• $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 aggressive 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.*  

“This new funding will allow CI to continue to spur new innovation and startup business in the state as well as step up our recruitment of out-of-state companies to Connecticut,” said Catherine Smith, DECD commissioner and CI chair. “We’re excited about these new initiatives and we’re eager to get the program underway.”

In the past three years alone, CI investments have leveraged $74 million in private capital investments for Connecticut companies. Through the Small Business Research Innovation (SBIR) program, small Connecticut technology firms captured $35-$38 million per year in federal funding in recent years and have generated $20+ million more per year in revenues directly attributed to those awards. CI’s investments add, on average, 1,600 Connecticut jobs per year.

*Revised as of January 12, 2012


 

About Connecticut Innovations Inc. 
Connecticut Innovations (CI) is a quasi-public organization dedicated to driving a vibrant, entrepreneurial, technology-based economy in Connecticut. CI stimulates high-tech growth by investing in early-stage Connecticut technology companies, university/industry research collaborations and technology transfer and collaborating with government, business, nonprofit and academic organizations to advance technology growth and promote public policies consistent with CI’s mission. For more information on CI, please visit www.ctinnovations.com.        

Ownership of IP is a Key Strategy of Innovative Firms, According to WIPO

Ownership of intellectual property (IP) rights has become central to the strategies of innovating firms worldwide, according to The Changing Face of Innovation, a new report from the World Intellectual Property Organization (WIPO). Researchers contend that rapidly growing global investments in innovation and the globalization of economic activities are key drivers of this trend. Between 1980 and 2009, global patents rose from 800,000 applications to 1.8 million. During this time, international royalty and licensing fee revenue increased from $2.8 billion in 1970 to $27 billion in 1990, and to approximately $180 billion in 2009 outpacing global gross domestic product (GDP). These results have led to the emergence of new market intermediates (e.g., IP clearinghouses and brokerages). The researchers also contend that this trend will move IP policy to the forefront of innovation policy.

Evidence indicates that knowledge markets enable firms to specialize, allowing them to be more innovative and efficient at the same time, according to the report. However, globalization of the knowledge market also places a greater emphasis on innovative firms to decide which knowledge to control and safeguard from domestic and international competitors and which to share for the purpose of increasing the general knowledge base. Rapid innovation in select sectors (e.g., telecommunications, software and audiovisual technology) has led to significant increases in the number of patent applications of complex technologies — technologies consisting of many separately patentable inventions where patent ownership is often widespread.

To keep up with this growing trend, well-functioning patent institutions have become a cornerstone of successful innovation systems. They must perform several tasks including ensuring the quality of patents granted and providing balanced dispute resolution. However, they are facing increasing pressure due to the significant number of applications they receive each year. This has lead to a significant number of national patent offices facing severe backlogs. In 2010, the number of unprocessed applications worldwide stood at 5.2 million.

The report highlights several different national policies to harness public research for innovation, including polices to incentivize patenting and commercialization of products by university and public research organizations (PROs). These programs have seen significant results over the past several decades. University and PRO filings under the WIPO's Patent Cooperation Treaty (PCT) have grown from almost zero in the 1980s to more than 15,000 in 2010 with most of the growth coming from advanced economies (e.g., Germany, France, Japan and the U.S.). The report concludes that policy reforms aimed at promoting patent-based university technology transfer have multifaceted effects on research institutions, firms, the science system and national economies.

Highlights from the rest of the report's finding include:

• Global R&D expenditures almost doubled in real terms from 1993 to 2009;
• Clear evidence that innovation is increasingly international with increases in the share of peer-reviewed articles with international co-authorship and a rising share of patents from international collaborators;
• Evidence to support the idea that innovation has become more collaborative and open; and,
• Evidence showing that society usually benefits from research collaboration due to enahanced efficiency and effectiveness of the innovation process.

WIPO also released its World Intellectual Property Indicators 2011, a report that contains detailed statistical information on national and international IP filing data. IP filings worldwide rebounded strongly in 2010 after a considerable decline in 2009, according to the report. During that period, the recovery in IP filings was stronger than the overall economic recovery. While global GDP grew by 5.1 percent, patent filings grew by 7.2 percent in 2010. Data shows that China and the U.S. accounted for nearly four-fifths of worldwide growth in patent filings. After two years of near zero growth, the U.S. patent office saw 7.5 percent growth in 2010 and received the largest total number of applications worldwide (490,226). Mirroring wider economic trends, the patent office of China (391,177 filings) overtook the office of Japan (344,598 filings) to become the second largest recipient of patent applications.

The report also analyzes the numbers of filings by resident applicants. During this time, Chinese residents overtook Japanese residents by 2,985 applications to become the most active patent filers in 2010. Residents of Japan (172,945 applications) and the U.S. (178,355 applications) filed the largest number of patent applications outside their own country. Residents of Canada, Israel, the Netherlands and Switzerland filed more than 80 percent of their total applications abroad. Read the report...

Attributed to: State Science and Technology Institute

Tech Companies: Line up your Spring and Summer interns now!

CTC has had great luck with interns from area universities and technical high schools.  Hiring an intern can provide your company with a cost effective means of completing projects along with a boost of ideas and energy that can benefit your entire company!  

How to find interns:

Visit Internhere.com - a service of the Hartford-Springfield Economic Partnership aimed at connecting students with internship opportunities.   They offer both High School and College intern matching, statewide.  Create a profile and watch the terrific applications come in!  

For Hartford Area Interns: Pathways to Technology Magnet High School is looking for (primarily summer) openings for their very tech savvy high schoolstudents.  Contact Kim Bennett, Internship Coordinator at 860-695-9495 or [email protected]  

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About Pathways:
Pathways to Technology Magnet High School is one of hundreds of Academy programs established in high schools across the country by the National Academy Foundation (NAF). NAF’s mission is to sustain a national network of career academies to support  the development of our students toward personal and professional success in high school, in higher education and throughout their careers. It is an Academy of Information Technology (AOIT) and some of our classes include Programming, Computer Information Systems and Networks, Web Design, Film/Video, and Sound Production.  

The IT program consists of a rigorous academic curriculum taken over three or four years of high school, and includes a student internship, after the end of the junior year. Our academy approach focuses on long-term goals and successfully bridges the gap between the classroom and the workplace.

From Kimberly Bennett, College/Career Specialist and Internship Coordinator:

We are seeking meaningful internships for our students where they can take the knowledge and skills they have learned in the classroom and apply it to the work environment.  Through my contact with employers, we have been told by some supervisors that our students are even more prepared than college interns!  As previously stated, we are seeking meaningful internship opportunities for our students to gain real world experience.  I have attached our Internship Brochure for Employers.

Pathways to Technology Magnet High School, 184 Windsor Ave, Windsor, CT 
Kim Bennett, Internship Coordinator at 860-695-9495 or [email protected]   

NIST Creates Office for the Advanced Manufacturing Partnership

This week, the National Institute of Standards and Technology (NIST) established a new office to coordinate the Advanced Manufacturing Partnership (AMP), an initiative created by the White House in June 2011 to facilitate advanced manufacturing collaborations among industry, academia and government partners. The National Program Office for AMP involves all federal agencies related to manufacturing, including the new Office of Manufacturing Policy of the National Economic Council. Read the details...

Atrributed to: State Science and Technology Institute

Congress Approves Six-Year SBIR Reauthorization

After 14 short-term continuing resolutions and years of negotiations, the federal Small Business Innovation Research (SBIR) and Small Business Technology Tranfer (STTR) programs have been reauthorized through 2017. The legislation changes a number of features of SBIR/STTR, including making it possible for companies that are majority-owned by venture capital firms to receive awards. President Obama is expected to sign the bill in the near future.

Last week, the House of Representatives passed the National Defense Authorization (HR 1540) conference report, which had incorporated the SBIR reauthorization. The six-year term of the conference agreement was a compromise between the three-year reauthorization approved by the House in April and the eight-year term passed by the Senate earlier this month. Funding for awards will increase gradually over the six-year period. Federal science agency set-asides for SBIR will increase from 2.5 percent of their budget in the first year to 3.2 percent by 2017. STTR set-asides will grow from 0.3 percent to 0.45 percent.

The increase in agency set-asides will contribute to a significant boost in the size of awards. Phase I SBIR and STTR awards will increase from $100,000 to $150,000. Phase II will increase from $750,000 to $1 million. Up to 25 percent of the awards made by the National Institutes of Health, the Department of Energy and the National Science Foundation can be invested in companies that are majority-owned by venture capital firms, including hedge funds or other private equity firms. Other agencies can make up to 15 percent of their awards in venture firm-controlled companies.

A new pilot program will allow agencies to use three percent of SBIR funds for administration, oversight and outreach. This program helps carry out required data collection on awards and investigate abuses. It also will be used to encourage participation of companies in states that receive few awards.

Once signed by the President, the Small Business Administration will have 180 days to implement the revised rules, during which time the public will have a change to offer comments and recommendations.

Read HR 1540 and check its status at: http://thomas.loc.gov/cgi-bin/bdquery/z?d112:h.r.01540:

Attributed to: State Science and Technology Instiute

 

About “crowdfunding” legislation – The Democratizing Access to Capital Act: Creating A Nation of Venture Capitalists Through Crowdfunding

Crowdfunding "would allow small companies to offer shares of stock directly to ordinary investors through established and vetted peer-to-peer platforms. “Crowdfunding” is just a new term for an old idea: offering small-dollar investors the chance to invest in new ideas."
Great article in Wired by Sen. Scott Brown: http://www.wired.com/epicenter/2011/11/scott-brown-next-steve-jobs/all/1

Startup America Partnership Announces Online Services for Entrepreneurs

Startup America, the nationwide, White House-endorsed entrepreneurship initiative, officially began operations on 9/13.

Young companies may now register to receive support services from more than 25 private partners. Offerings include free and discounted software packages, professional network memberships and market data.

Read the full press release

Visit the site, http://www.startupamerica.org...

Eligible companies will be designated as a Startup, Rampup or Speedup based on the following criteria:

· Startup: Young companies currently in product/service development formed after January 1, 2006 with two or more employees.

· Rampup: Growing companies with at least five employees that are focused on customer acquisition that have a product or service being utilized by customers.

· Speedup: Hyper-growth businesses with over 25 employees whose expansion is being driven by customer demand and new markets.

Once approved, each Startup America Firm will have access to a personalized dashboard called “My Success Kit,” with which they can manage the resources they choose to take advantage of.

The resources fall into five key areas that entrepreneurs find critical to success: Talent, Services, Expertise, Customers and Capital. As part of the platform launch, the web site now also includes a searchable resource directory that firms can use to find the most relevant offerings based on their specific needs, stage of growth, and location.

 

Redistributed with permission from State Science & Technology Institute,Westerville, OH, www.SSTI.org