Connecticut hopes to grow a significant cluster of high-tech companies in fields such as fuel cells, advanced manufacturing and medical devices. But one of the stumbling blocks can be finding cash to develop new and unproven ideas. WNPR’s Harriet Jones looks at efforts to fill the funding gap for emerging technologies.
Jolinda Lambert is the CEO of a company called Innovatient Solutions that’s just about 18 months old.
“So when the patient first comes into the hospital and we do an initial orientation of the room…..”
Lambert, a former nurse, collaborated with IT specialists to develop a system that helps educate hospital patients and connect them to their care team. It’s software that utilizes the patient’s TV as, among other things, an intelligent call light.
“We send this message to the right person the first time. So if they need blankets, that can go to the nursing assistant, whereas if they’re in pain that needs to go to the nurse. Not only is it more efficient for the hospital, it’s better responsiveness to the patient.”
Patients can see their daily schedule on screen, order meals, view entertainment, connect with their loved ones at home, learn about their condition and also list questions that they’d like to ask their doctors.
“We know that physicians don’t spend a lot of time at the bedside with the patient, so if we can educate the patient before the physician shows up, then they’re going to have a more meaningful conversation. And at the end of the day hospitals are being penalized financially for readmission rates and patient satisfaction and a way to really promote those things is to engage the patient.”
The system is just about to go live in two test hospitals, but getting it this far has required funding of more than a million dollars. This isn’t the kind of company that can go out and get a conventional bank loan. Most banks won’t bet on a company that has no proven revenues. Lambert says she also wanted the input that would come from venture capital.
"They give you feedback on the application. You try and bring in people who are giong to help you move the company forward as well, and I think if we had gone the bank, financial institution route, some of those partnerships might not have been there in the same manner."
One of the funds that has invested in Innovatient is Enhanced Capital Partners, which has its Connecticut office in Old Lyme. Managing Director Liddy Karter when the fund invests in a company, it doesn’t just write the check and walk away.
“We’ll be taking on this company as a partnership until they don’t need capital anymore, typically. That doesn’t always mean we’re on their board of directors by any means, but it means that we’re there if they need advice or if they have a question or if there’s something specific we can do for them, we’re right on it.”
Karter’s fund is a kind of bridge for emerging companies between angel investors, typically individuals who lend relatively small amounts to truly unproven start-ups, and venture capitalists who raise money from investors and usually do deals of several million dollars, taking slightly more established companies to the next level.
“If we can begin to think of it as priming the pump – creating enough great companies here that are ready for their next round of capital, and we can show them to the venture investors who are in fact right down the road.”
But there’s the rub, says Karter. Connecticut is home to lots of venture capitalists, 86 different firms at last count, but not very many of them spend their money here.
“We’re fourth in terms of venture capital under management, but we’re fourteenth in terms of investments here.”
Connecticut’s venture capitalists in other words, look outside the state for deals. Part of the problem, according to Karter and others is networking. Connecticut doesn’t do enough to bring venture capitalists together with companies they might be interested in. The Connecticut Venture Group is one of the organizations trying to close the gap with networking events like this one last month at Yale’s law school, bringing together ideas with the capital to support them. Matthew Nemerson of the Connecticut Technology Council says there are other efforts afoot.
“To get leading venture capitalists who happen to be in Connecticut together once a month in an off-the-record lunch, and just swap stories about what deals they’re looking at, and just get to know each other to create a Connecticut culture of venture capital.”
Nemerson hopes that these efforts and those by Yale and UConn to incubate early stage technology companies can lead to a steady growth of funding deals in the state.
For WNPR, I'm Harriet Jones.