Investors Meet In New Haven With CT Tech Companies

Angel investors from across the Northeast gathered in New Haven Thursday to meet with promising tech companies in need of their dollars. Connecticut recently enacted a tax credit for these high-risk investors, and advocates say as many as 30 deals are now in the pipeline in the state because of that backing. WNPR’s Harriet Jones reports.

The recession proved very tough for entrepreneurs and start-up businesses. Unproven ideas are always a risky proposition for investors, and capital seemingly vanished in the wake of the financial crisis. Trade group the Connecticut Technology Council assembled a hundred emerging companies at the Omni Hotel to make their pitches to the assembled angels. Council president Matthew Nemerson.

“They’re in new media, they’re in software, they’re in IT services, they’re in biotech, there are devices for manufacturing, there’s medical devices for drug delivery. Connecticut comes from an incredibly diverse and rich tradition of many different industries, so when you think about innovation, it’s going to have that same spread of diversity.”

Nemerson was a key proponent of an angel tax credit, finally enacted by Connecticut legislators in July. The state put aside $6 million to give a 25% tax credit to investors who sink at least $100,000 into local companies. Angel Liddy Karter runs Iron Ventures, a New Haven-based investment firm that seeks out technology companies. She’s also a member of the Connecticut-based Angel Investor Forum and the National Angel Capital Association. She says the tax credit is helping to keep Connecticut dollars at home.

“We’ve seen in Connecticut more angels interested in Connecticut deals. Before, they were looking all over. We’re not far from New York or Rhode Island and Massachusetts, but now people are saying they’d rather invest in Connecticut. And investors from other states are coming to Connecticut looking for ways to work into our deals as well.”

Joel Douglas’s Groton-based company E-Gen is developing technology to harness the hydro power of wastewater outflows. He says in the past it has been tough to get development funding, but he believes the conference itself is proof that things are changing.

“There’s more investors. If you look at the room, there are more investors that are interested in investing. The tax credit is going to help build jobs in Connecticut, it really will.”

Around 20 states currently offer an tax credit to attract angel investors. Entrepreneurs in Connecticut hope that enough concrete deals emerge in coming months to prove that the state has managed at least level to the playing field.

For WNPR, I'm Harriet Jones.