PEDP approves revived Innovation Investment Program
THE PROVIDENCE ECONOMIC Development Partnership on Wednesday approved the revived Innovation Investment Program, with changes lowering the investment amount per company and stipulating that companies have to stay in Providence for at least two years instead of one year. Above, Angelo Pitassi Jr., founder of former Innovation Investment Program recipient HealthID Profile Inc.
PROVIDENCE – The city will re-launch its suspended startup investment program with smaller investments focused on only “high-growth” technology sector companies.
The Providence Economic Development Partnership Wednesday unanimously approved guidelines for a new version of the Innovation Investment Program that will make $35,000 investments in startups instead of the $50,000 loans made in the original program. The new investment program will also require recipients to stay in the city for at least two years instead of the one year required previously.
Unlike the original program, which was open only to co-investments with startup accelerator Betaspring, the venture capital nonprofit Slater Technology Fund and Cherrystone Angel Group, the new version will be open to any company with high-growth potential endorsed by a city-recognized “mentor.”
First launched in late 2011, the original IIP funded 33 companies, but was suspended after burning through $1.65 million, $650,000 more than intended. Thirty-one of the 33 companies receiving investments were from Betaspring, prompting city officials to open the program up to a wider variety of companies.
Mayor Angel Taveras committed $1 million to restart the program in his State of the City speech in January.
The PEDP board did not discuss additional terms of the new loans.
The previous IIP 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.