Pauline Murphy, CI’s senior managing director of investments, gave us insight into the types of companies that get her team’s attention these days, along with the tech they’re excited about for 2021 and beyond.
Thanks for talking with us, Pauline. Before we dive into CI, let’s talk a little about Connecticut. Why do you like the state as a place to grow a business?
Pauline Murphy: Connecticut is a small state, but it has a strong entrepreneurial ecosystem. Our considerable focus on supporting and encouraging angel investors, innovation and collaboration between businesses and organizations like Jackson Labs and our network of universities, including Yale and UConn, and more recently, Sacred Heart, Fairfield and many others, is one of our greatest strengths. You get a lot of support here from many different angles—all important considerations for a business as it scales.
How difficult is it to raise venture capital in Connecticut?
PM: There are no bigger challenges here than in any other area. Good companies attract capital regardless of their location, and we have plenty of VCs outside of Connecticut who are investing in Connecticut companies. Since the pandemic, Connecticut is especially attractive due to its location. People are leaving bigger cities like New York or Boston, and Connecticut is conveniently located between the two.
CI focuses on high-tech industries, including insurtech, fintech and Industry 4.0, to name a few. Are these still areas your team is interested in?
PM: Yes, and we’re also interested in, and seeing a lot of, pitches for diagnostics and therapeutics. Also, lots of platforms for managing data, telehealth and digital health. Cybersecurity continues to be a hot area, too. You hear all the time about big data, and big data breaches, so innovations around preventing cybercrime are definitely of interest.
What do you see as the next big investment opportunity?
PM: Speaking broadly, we’re thinking about how we’ll operate in a post-COVID world. We’re interested in technology that helps with work, school, health … so innovations that help facilitate remote work, including remote onboarding, along with digital education, and then telemedicine visits and elder tech, are exciting right now. With the new administration’s focus on climate change, we’re also focusing more on green and clean tech. At the municipal and local level, where people have historically been slow to adopt new technology, we’ll see an emerging commitment to becoming more responsive, and that will most definitely be facilitated by technology. Anything that helps improve local government response is something we’re interested in taking a closer look at.
How has COVID impacted the types of investments you’re looking to make? Anything besides what we already talked about?
PM: Yes. Companies that have strong syndicates and at least 18 to 24 months of runway are attractive because they’ll be able to carry on regardless of what happens in the short term. They’ll definitely have an advantage.
What is the most important thing a startup can do to prepare for a meeting with you?
PM: They should be able to tell their story in a cohesive manner and demonstrate they’ve thought through their pitch.
What’s the biggest mistake entrepreneurs make when they’re raising funding?
PM: There are two: Not raising enough money and worrying too much about dilution.
Anything else I forgot to ask that is important for entrepreneurs to know?
PM: CI is big on diversity and always has been. We prefer it when our founders, their management team and their board include a mix of cultures, races, ages and genders whenever possible. We’ve seen time and again that broader, more inclusive perspectives lead to much better business outcomes.
Thanks, Pauline! Interesting stuff.
PM: My pleasure.