Venture Capital Investments Rise Slightly in Connecticut
The Stamford Advocate, Stamford, Conn.
Aug. 9--Venture capital funding in Connecticut remained essentially flat during the second quarter, with venture investments rising just slightly compared with the first quarter.
Seven Connecticut companies, including two local businesses, raised $27.9 million in the second quarter, up from $24.1 million raised by venture-backed firms in the first quarter, according to a national MoneyTree Survey issued by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.
Second quarter funding was down significantly from the same quarter of last year, when $51.1 million was invested in 11 companies, the survey found. "With only $52 million raised to date this year, companies in Connecticut will need to have strong fundraising results in the second half of 2005 to achieve historical averages," said Owen Davis, co-chair of PricewaterhouseCoopers' venture capital/private equity practice in Connecticut and Westchester County.
Nationally, venture capitalists invested $2.4 billion during the quarter in 750 companies.
The largest investment made in Connecticut went to Kelson Physician Partners Inc., a Hartford-based pediatric healthcare company, which received $15 million. This was the company's 11th round of funding. The majority of funding went to late-stage and emerging-stage companies, according to the survey.
One of those companies was Norwalk-based Reconda International Corp., a provider of Web-based software products for WebSphere MQ messaging application development, testing and support. The three-year-old company raised $300,000 in its ninth round of funding. This is the second round the company received this fiscal year. It employs 25 people and has two commercial software products. Another local business, Stamford-based LifeOptions LLC, was the only venture-backed company in Connecticut to receive first-round funding. The company, a life settlement brokerage firm, received $1 million, said Chief Financial Officer Ted Pryor. The money will be used for working capital as the company, which was launched in May, looks to broaden its reach in the Northeast.
LifeOptions focuses on the secondary life insurance market by working with senior citizens and life insurance agents to sell unwanted life insurance policies to institutional investors.
"We put a lot of time into our business plan, both in terms of the description of the plan and in terms of the numerical analysis on what we could project," Pryor said. "It's a big market and we were able to convince our investors it was an underserved market -- at least in our region." "Life settlements are the fastest growing fixed asset class in the country today, so we saw a market opportunity," said Jim Pugliese, LifeOptions' president.
While start ups have been hard-pressed to capture venture capital dollars since the dot-com bust, that may change soon, said Matthew Littlewood, who follows venture investments in New England for PricewaterhouseCoopers. There was a growth in later-stage investing during the second quarter -- an indication that venture capitalists feel their investments are maturing and ready for exit. That will mean a flurry of acquisitions and initial public offerings in the region, which will give investors more cash and time to focus on start-ups again, Littlewood said.
Aug. 9--Venture capital funding in Connecticut remained essentially flat during the second quarter, with venture investments rising just slightly compared with the first quarter.
Seven Connecticut companies, including two local businesses, raised $27.9 million in the second quarter, up from $24.1 million raised by venture-backed firms in the first quarter, according to a national MoneyTree Survey issued by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.
Second quarter funding was down significantly from the same quarter of last year, when $51.1 million was invested in 11 companies, the survey found. "With only $52 million raised to date this year, companies in Connecticut will need to have strong fundraising results in the second half of 2005 to achieve historical averages," said Owen Davis, co-chair of PricewaterhouseCoopers' venture capital/private equity practice in Connecticut and Westchester County.
Nationally, venture capitalists invested $2.4 billion during the quarter in 750 companies.
The largest investment made in Connecticut went to Kelson Physician Partners Inc., a Hartford-based pediatric healthcare company, which received $15 million. This was the company's 11th round of funding. The majority of funding went to late-stage and emerging-stage companies, according to the survey.
One of those companies was Norwalk-based Reconda International Corp., a provider of Web-based software products for WebSphere MQ messaging application development, testing and support. The three-year-old company raised $300,000 in its ninth round of funding. This is the second round the company received this fiscal year. It employs 25 people and has two commercial software products. Another local business, Stamford-based LifeOptions LLC, was the only venture-backed company in Connecticut to receive first-round funding. The company, a life settlement brokerage firm, received $1 million, said Chief Financial Officer Ted Pryor. The money will be used for working capital as the company, which was launched in May, looks to broaden its reach in the Northeast.
LifeOptions focuses on the secondary life insurance market by working with senior citizens and life insurance agents to sell unwanted life insurance policies to institutional investors.
"We put a lot of time into our business plan, both in terms of the description of the plan and in terms of the numerical analysis on what we could project," Pryor said. "It's a big market and we were able to convince our investors it was an underserved market -- at least in our region." "Life settlements are the fastest growing fixed asset class in the country today, so we saw a market opportunity," said Jim Pugliese, LifeOptions' president.
While start ups have been hard-pressed to capture venture capital dollars since the dot-com bust, that may change soon, said Matthew Littlewood, who follows venture investments in New England for PricewaterhouseCoopers. There was a growth in later-stage investing during the second quarter -- an indication that venture capitalists feel their investments are maturing and ready for exit. That will mean a flurry of acquisitions and initial public offerings in the region, which will give investors more cash and time to focus on start-ups again, Littlewood said.
posted by Life Settlement Pro at 8:11 AM
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