August 15, 2023
Small businesses employ nearly 50% of Connecticut’s workforce and make up 99.4% of all business establishments throughout the state. Still, many are struggling under current economic conditions. A 2022 Connecticut Business and Industry Association (CBIA) poll found that 89% of small business owners have seen an increase in the cost of doing business, 85% have found difficulty finding and/or retaining employees, and 83% were impacted by supply chain disruptions.
So, how do we address economic issues facing small businesses? Since 2011, the InvestCT program has been a lifeline for entrepreneurs unable to attract traditional forms of capital—delivering solutions to stimulate business expansion and job creation across a wide spectrum. In fact, according to the Connecticut Department of Economic Community Development, the program created more than 5,000 jobs between 2011 and 2022.
Moreover, the program has been instrumental in funneling financing to targeted municipalities that have historically lacked investment, GreenTech, cybersecurity and pre-seed businesses looking to get their start in the state. By helping Connecticut businesses add jobs, purchase equipment, and increase economic activity, InvestCT has had a significant positive impact on the state—and the proof is in the stories behind the businesses that have been supported by the program.
Creating Quality Jobs
Air Temp Mechanical Services is a full-service HVAC contractor based in Southington that received funding under the InvestCT program. The company’s jobs require no specific education requirement, making jobs highly accessible to those who may have faced education barriers. There are plenty of opportunities for growth, too—Air Temp offers powerflame training as well as apprenticeship programs that provide employees with the skillsets and knowledge to be successful in an HVAC contracting career.
Similarly, Habco Industries, which serves the commercial and defense aerospace industry, has seen a nearly 300% spike in jobs in the last eight years. Its salaries, at three times the county livable wage, are highly competitive.
Stimulating Innovation
These targeted investments have also strengthened Connecticut’s competitiveness as an innovator and developer. Cybrexa Therapeutics, a biotech company working to develop new applications for existing cancer treatments, has become a leader in oncology innovation. Advantage Capital’s investment, through InvestCT, provided Cybrexa with the capital it needed to further develop DNA incubation technologies and move into clinical trials. The firm’s innovative contributions to the biotech industry have potential to revolutionize cancer treatments and make Connecticut a leader in the field.
IsoPlexis, a preeminent life science company, is a leader in the biotechnology industry. Since our initial investment, the company successfully developed and launched its initial product, playing a large role in Connecticut’s competitiveness in this high-growth, high-pay sector. Connecticut now ranks No. 4 in Bioscience Venture Capital funding, No. 3 in Bioscience patent activity, and No. 4 in innovation.
Creating Lasting Economic Growth
Since 2015, the amount of reinvestment tax credits available through InvestCT increased from $200 million to $350 million, and the number of venture capital investments increased to 150 from around 100. InvestCT and has played a significant role in Connecticut’s position as a small business leader and innovator.
Still, there is always room for growth. Many Connecticut businesses are facing barriers to growth and limited access to capital—in 2021, 59 bank branches closed across the state, and many companies are set to downsize amid higher interest rates and recession fears. In light of these struggles, it’s important that Connecticut maintains and expands economic programs that incentivize innovation, growth, and access to capital—and InvestCT is a proven and effective tool to get that done.
Want to learn more about InvestCT, Advantage Capital’s participation and if your business can benefit from the program? Visit our website here.
Advantage Capital is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. This document has been prepared for informational purposes. Any offer to sell or solicitation of an offer to purchase any security or investment product (including any interest in any fund or investment vehicle managed directly or indirectly by Advantage Capital) will be made only to qualified prospective investors pursuant to separate and definitive offering and subscription documents in accordance with applicable federal and state securities laws. Only such definitive offering materials may be relied upon in connection with any decision to invest in a fund advised by Advantage Capital, and all such materials, including any material risks associated with the investment as provided therein, should be carefully read in their entirety. Advantage Capital is an equal opportunity provider.
The portfolio companies referenced herein represent a small sample of Advantage Capital’s investments that were selected solely to illustrate the firm’s experience making similar investments to those within the Fund’s investment strategy, including industry sectors and investment instruments. The profitability of any single investment was not a factor in the selection process. Nothing in this document should be an implication or statement that investments previously made by Advantage Capital were or are successful, or that past performance is any indication of future performance. All investments involve risk and unless otherwise stated, are not guaranteed.
