The new year will mean new money for bioscience entrepreneurs in the state, and the quasi-public agency Connecticut Innovations holds the $200 million purse strings.
But Claire Leonardi, the agency's executive director, said she didn't expect any money to be released until March at earliest because of a complicated vetting process designed to ensure that only the best ideas get funding. The first two years of the fund will offer $10 million in annual state investments, while the following two years ups the ante to $15 million and each of the final six years includes $25 million in funding.
Applications for funding will be accepted starting Jan. 2.
"The whole focus of this fund is commercialization," Leonardi said during a half-hour phone interview.
Leonardi, who visited New London last month and met with local entrepreneurs and economic-development officials at the Science & Technology Magnet High School of Southeastern Connecticut, has spent the past few months assembling an advisory committee for the 10-year Bioscience Innovation Fund approved by the legislature earlier this year. Members include Charles Lee, scientific director of The Jackson Laboratory for Genomic Medicine in Farmington, and others represent a cross-section of disciplines, including biomedical devices, advanced research, therapeutic medicine and hospital practitioners.
"Clearly, the science will cross over into many different disciplines," Leonardi said. "The number of inquiries we have gotten has been pretty overwhelming."
Leonardi said she expects the bioscience fund to attract both in-state and out-of-state entrepreneurs. But a business or researcher must be located in Connecticut to access the funds.
"Money is tough to find throughout the country," she said. "Having funding that's available if they have a good idea makes people think about coming here."
But Connecticut Innovations isn't giving away money indiscriminately, she emphasized.
"We don't want to duplicate anything that anyone else does," she said. "We are very much going to look to leverage other funders."
Connecticut Innovations will offer grants, loans, equity investments and loan guarantees to dozens of companies and research institutions over the next few years. The agency has no minimum incentive payment, but Leonardi said a "soft cap" of $500,000 would be the maximum investment.
"If an idea is really big, we could potentially go over that," she added.
Money will be given in companies' early start-up stage sometimes known as "the valley of death," when development costs are at their highest and no revenues are coming in. Private venture capitalists don't usually invest their money until new ideas are "de-risked" by proving that they work, which means entrepreneurs often have to count on credit cards, personal savings, research grants and family and friends to get innovative products off the ground.
Applications for state money will be taken on a rolling basis, and some of the applicants will be weeded out in-house. Ideas that look the most promising, she added, will undergo out-of-state peer review, with the most promising work being forwarded to the 13-member bioscience fund advisory committee.
"We really want to push the time frame," Leonardi said. "We're anxious to get some of this money moving."
One of the criteria for companies gaining funding is the possibility of Connecticut Innovations recouping some of its investment money. They might take an equity stake in a business, for instance, or gain a portion of the intellectual property rights associated with a certain process or have a royalty agreement that gives the agency a stake in sales.
Money the agency makes on its investments can then be recycled through the bioscience fund, meaning the $200 million investment could grow as time goes on. Votes on the funding of companies or universities approved by Connecticut Innovations will be made public, but ideas that do not make it through the process will not be revealed.
"We need to protect people's proprietary information," Leonardi said.
In addition to funding, Leonardi said her agency might be involved in helping scientists find teams with the capability to execute their ideas. Connecticut Innovations also might help arrange handoffs from university researchers not interested in commercializing their ideas to investors with the expertise and capital to bring a product to market.
Leonardi said her main aim is to fund people with great ideas, wherever they may come from. There is no intention, she said, to target certain segments of the state for the lion's share of funding.
"I think some people thought this was just funding for UConn and Yale," Leonardi said.
But she said Connecticut Innovations is seeking a broader reach. It is part of a larger economic strategy that includes the state's $864 million Bioscience Connecticut initiative, as well as its $291 million Jackson Lab build-out and $2 billion boost to spur science, technology, engineering and math programs at the University of Connecticut.
The SECT Tech program out of UConn-Avery Point in Groton is one new pathway for local scientists to get business advice to advance their ideas. And the Bioscience Clubhouse, supported by Connecticut Innovations and other public and private organizations, adds a networking component.
"Southeastern Connecticut is a hot spot of intellectual talent, but a lot of people don't feel connected to each other," Leonardi said. "I think we can begin to connect those dots."