Following a yearlong hiatus, Mayor Angel Taveras is relaunching the Innovation Investment Program, which made $50,000 investments in seed-stage companies in exchange for a promise they stay in the city for at least a year.
Specifics of the new program have yet to be finalized, but already there are strong indications it will be a broader program than the one first created in 2011 that primarily fed graduates of the Betaspring startup accelerator.
At a meeting of the Providence Economic Development Partnership board, which controls the U.S. Department of Housing and Urban Development money that funds the IIP, Taveras and board members expressed a near unanimous desire to open the money up to more companies outside Betaspring.
“We are not limited to Betaspring,” Taveras told the PEDP board, which he chairs. “There is nothing to stop us from working with other accelerators.”
Between the IIP’s launch in November 2011 and when it was suspended last April, the city made $50,000 convertible loans in 33 companies, according to Taveras, with 21 of them still active in Providence and 15 considered on a “high-growth trajectory.” Combined, the companies employ 58 full-time-equivalent employees and have attracted $5.3 million in private investment.
The investments came with a 4 percent interest rate and converted to an equity stake in the company if it buys back shares, is sold or goes public.
The city’s original guidelines for the IIP were to leverage startup investments by Betaspring, the Slater Technology Fund and Cherrystone Angel Group.
Of the 33 companies who have received city investments, 31 of them came through Betaspring.
One of the two non-Betaspring IIP investments, in Alektrona Corp., piggybacked a Slater investment and the other, in Maternova Inc., was an independent bet PEDP staff made through their own familiarity with the company.