For decades, CI has witnessed the positive change that comes from seeding early-stage companies whose innovations improve lives around the world. Among other breakthroughs, CI-backed companies have cured rare diseases, pioneered lifesaving medical devices, simplified business processes, and more. They’ve also generated healthy returns for the state and high-paying jobs for Connecticut residents. Now, the state’s venture capital arm has a new goal—to prioritize underrepresented founders—and it has earmarked $50 million to make it happen.
Managed by Alison Malloy, managing director of investments at CI and a successful entrepreneur in her own right, the Future Fund will invest from $250,000 to $1.5 million in venture-backable startups with diverse founders and teams that demonstrate significant growth potential. The fund is largely sector agnostic, though Malloy said she is particularly interested in companies focused on fintech, proptech, healthtech, insurtech, AI and consumer packaged goods. The state has a robust ecosystem in these industries, including considerable talent and mature companies, which CI draws upon to accelerate startup growth.
To maximize the state’s return on its investment, the fund will prioritize companies that have customers and proven traction.
Diversity in focus
Although CI has always evaluated management team strength as part of its due diligence process, diversity was never a formal consideration. Recognizing that diverse teams produce better outcomes, the Future Fund aims to change that. “Over the past 10 years, there’s been an increase in VC funding for women here in Connecticut, which is a great start, but it’s not enough,” Malloy said. “The fund supports founders who consider themselves underrepresented. That’s the part of the ecosystem the Future Fund is trying to capture.”
“There’s a lot of money out there for founders with great ideas,” Malloy added. “Supporting visionary founders, especially underrepresented founders from diverse backgrounds, will strengthen our innovation ecosystem, lead to additional job opportunities in Connecticut, benefit communities that might not otherwise receive VC funding, and help create generational wealth.”
While the fund is too new to have success stories just yet, the portfolio is quickly growing, including investments in the following companies: 2045 Studio, Dream Payments, Ellis Brooklyn, Hally Hair, Intellihealth and Matrix Rental Solutions. Malloy’s team is also largely focused on building a strong pipeline. “We want to find the next unicorn in Connecticut,” she said. “We’re looking for high-growth, venture-backable companies with disruptive, proven technology, strong traction, and strong moats.”
The goals of the Future Fund, like all CI’s funds, are twofold: To generate a return on investment that CI can then funnel into additional high-potential companies, and to create meaningful jobs in the state. CEO Matt McCooe said he couldn’t think of anyone better to lead the effort. “It’s difficult for any founder to raise money, and it’s especially difficult for first-time founders and for women and minorities,” he said. “You have to search widely to find CEOs of venture-backed companies who have led successful exits in Connecticut. Alison not only was able to raise money, but she also sold her company to a large multinational in 2016. She went through the Springboard Enterprise program; she was Golden Seeds’ first investment and its first exit, and one of AIF’s first investments as well. Two years ago, she co-founded Tidal River to help accredited women investors source and vet deals. Her network is deep and wide, and she’s spent the past seven years helping other underrepresented entrepreneurs. Having her dedicate her time to finding and vetting companies with diverse founders, talent and ideas will mean we’ll soon have a rich portfolio of new companies that can grow quickly, make a global impact and help cement Connecticut’s reputation as a leading tech hub.”
Malloy added, “I know and understand the challenges and the process of fundraising because I went through it myself. CI is ready to provide capital and strategic support, especially introductions to partners in our ecosystem who can help position the startup for acceleration and prepare it for additional funding. We have a strong network of innovators and investors who recognize the positive impact diversity has on outcomes, and we’re excited to help launch the next generation of great companies in Connecticut.”
Interested entrepreneurs can apply on CI’s website.