This document summarizes a panel discussion on funding sources and incentives for investment in Connecticut. The panelists represented various state programs, a private investment firm, and a law/accounting firm. They discussed state tax credits, grants, loans, and equity investments available from Connecticut Innovations and the Department of Economic and Community Development. The private investment firm described their debt and equity investments in Connecticut companies. The law/accounting firm overviewed various state tax credits for businesses. The event concluded with announcements of upcoming networking events from the hosting organization.

1. Funding Sources and Incentives for
Investment in Connecticut
Moderator
Patrick O’Neill, P.E.
Director, Investments
Connecticut Innovations
Panelists
Dana R. Bucin, Esq. Claire R. Leonardi
Updike, Kelly & Spellacy Connecticut Innovations
William B. Claffey, Esq. John Strahley
Fiondella Milone & LaSaracina
Ironwood Capital

2. Funding Sources and
Incentives for Investment in
Connecticut
A Second Thursday Event
presented by
Crossroads Venture Group
January 10, 2013
University of Connecticut Health Center (UCHC)
Farmington

3. Funding Sources and Incentives for
Marketing at the ConnecticutLight
Investment in
Speed of
Welcome
Moderator
Patrick O’Neill, P.E.
Director, Investments
Connecticut Innovations

4. Funding Sources and Incentives for
Marketing at the ConnecticutLight
Investment in
Speed of
Panelist
Dana R. Bucin, Esq.
Updike, Kelly & Spellacy

5. Funding Sources and Incentives for
Marketing at the ConnecticutLight
Investment in
Speed of
Panelists
William B. Claffey, Esq.
Fiondella Milone & LaSaracina

6. Funding Sources in Connecticut – State Tax
Credits
 William B. Claffey, Director of State Tax,
Credits & Incentives
 Fiondella, Milone, & LaSaracina, LLP

7. 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

8. Funding Sources in Connecticut – State Tax
Credits
 Dispelling a Myth
– Is Connecticut bad for business?
– State Comparisons
 Connecticut Tax Advantages
– Apportionment
– Tax Credits / Incentives

9. Funding Sources in Connecticut – State Tax
Credits
 Tax Credits - Generally
– Investment Credits
– Operations Credits
– Hiring / Employment Credits
– Location Driven Credits
– Angel Investor Credit

10. 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?

11. Funding Sources in Connecticut – State Tax
Credits
 Helpful Resources
– Information Publication 2010(13)
– www.ct.gov/drs
– www.ct.gov/ecd
– www.fmlcpas.com

12. Funding Sources and Incentives for
Marketing at the ConnecticutLight
Investment in
Speed of
Panelists
Claire R. Leonardi
Connecticut Innovations

13. January 10, 2013

14. Investing in Connecticut
CI grows businesses and jobs in Connecticut by providing
innovative financing and strategic assistance.
Access to
Capital
Strong
Expertise Track
Record
Strategic
Talent Advisers Partners

15. 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

16. CI Financial Assistance
 Equity and Risk Capital Investments
 Debt Financing
 Small Business Innovation (SBI) Funding & Services

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. For more information:
www.ctinnovations.com
www.decd.org

24. Funding Sources and Incentives for
Marketing at the ConnecticutLight
Investment in
Speed of
Panelists
John Strahley
Ironwood Capital

25. Private Capital for Growing Businesses

26.  $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

27.  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

28.  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

29. Investment Experience – 12/31/2012
 $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

30. Ironwood Capital Connecticut
 Victor Budnick, Managing Director
◦ (860) 409-2108
◦ Budnick@ironwoodcap.com
 John Strahley, Managing Director
◦ (860) 409-2106
◦ Strahley@ironwoodcap.com
 Alex Levental, Director
◦ (860) 409-2109
◦ Levental@ironwoodcap.com
 Mike Benson, Senior Associate
◦ (860) 409-2115
◦ Benson@ironwoodcap.com

31. Funding Sources and Incentives for
Marketing at the ConnecticutLight
Investment in
Speed of
Upcoming CVG Events and Closing Remarks
Liddy Karter
Executive Director, Crossroads Venture Group
Managing Partner, Enhanced Capital Partners

32. THANK YOU CVG SPONSORS
Deal Lead
B Round

33. THANK YOU CVG SPONSORS
A Round
Venture Capital Sponsors
Professional Service Firms

34. Upcoming Events
February 12
A Guide to the Digital Media Market Ask about CVG’s 2013
University of Connecticut, Stamford
4:30 PM – 7:00 PM
Boardroom
Series
March 14
Navigating the FDA: Getting to Market
Anylan Center, Yale University, New Haven
4:30 PM – 7:00 PM

35. CVG 2013 Calendar
Offering 60 Events
Attendance to all Second Thursday
events is free for members.