It took several years for the Rhode Island Economic Policy Council to get its technology-financing machine – the Samuel Slater Technology Fund – up and running. Now, Executive Director Christopher "Kip" Bergstrom hopes the state won’t skimp on the fuel needed to keep the machine pumping on all cylinders.
Under Gov. Lincoln Almond’s budget proposal for fiscal 2003, submitted Feb. 13, the Slater budget remains flat at $3 million for the fifth straight year. The amount is $1 million less than the center has requested and $2 million short of the level Bergstrom ultimately would like.
In light of the state’s projected $322 million budget gap, however, Bergstrom acknowledged that Almond’s proposal was not surprising.
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"Given the forecast the governor had to work with, he probably didn’t have much of a choice," Bergstrom said.
In its early years, the fund’s $3 million budget was plenty: the Slater Center couldn’t even spend all the money, because it didn’t have the necessary resources to seek out a large number of good tech investments, Bergstrom said. Instead, the center built up a reserve, waiting patiently while it found the necessary expertise to find promising deals.
Now that system is set up, and opportunities abound.
"We have the mining operation in place," Bergstrom said. "We’re out there talking to the scientists and the engineers at the schools, finding promising ideas."
The center has been able to carry over that built up budget reserve, allowing it to spend a projected $4 million in fiscal 2002, which ends June 30. Bergstrom said the Slater Center should be able to do the same for fiscal 2003.
Roughly two-thirds of the Slater Fund is invested directly into technology startups. The rest is spent on consulting and mentoring – services that Bergstrom says are more valuable even than the direct funding, because the center directors are conduits to the world of venture capital for young startups.
Now that the center’s structure is in place, any additional money beyond the $3 million goes straight into direct investments, Bergstrom said. The average direct investment is about $100,000, so an additional $1 million would help fund 10 fledgling Rhode Island tech companies, he added.
What makes the prospect for additional funding all the more tantalizing is that the Slater Center’s first success stories have begun to surface over the last two years. Four Slater-funded startups – all biomedical firms – have gone on to raise at least $50 million each in venture capital funding.
Why all biomedical? Because the Slater Center for Biomedical Technology was the first of the six centers to be developed, "its seeds are the first to sprout," Bergstrom said. It often takes three or more years before seed money evolves into an initial round of venture-capital financing, he said.
As the state’s revenue scenario shapes up in coming months, Bergstrom said the council will "try to persuade the General Assembly to budget some amount above the $3 million mark, if it turns out that there’s some wiggle room in the spring revenue forecast."
State Sen. William A. Walaska, a Warwick Democrat, vice chairman of the Senate Corporations Committee and a board member of the Economic Policy Council, said he plans to meet with legislative leaders to see if more money can be squeezed out of the state budget for the Slater Fund.
"It’s going to be difficult," Walaska said. "We’ll certainly work to keep the $3 million at all costs, and maybe we can get a little more."
Walaska said the Slater budget should be viewed in a different light than other budget requests, because the fund is as an investment with the potential for significant returns in the form of jobs and revenue for the state.
"We get (funding) requests from everybody, from senior centers to these centers of excellence," Walaska said. "The difference is that the centers of excellence eventually will pay for the senior centers. It’s an important investment."
He said he plans to meet in coming weeks with Senate Majority Leader William V. Irons, a Democrat from East Providence, and Sen. Frank T. Caprio, a Providence Democrat, and the Senate Finance Committee chairman, to discuss the Slater budget.
