Five Questions With: Thorne Sparkman

Thorne Sparkman is the managing director of Providence-based Slater Technology Fund, Rhode Island’s largest venture capital fund, where he is responsible for the firm’s investments across a range of sectors. He focuses on the earliest stage of company creation, often working with university-based teams in commercializing research.

Sparkman also oversees Slater’s event programming, which includes conferences, panel discussions, presentations, and networking events that the organization sponsors throughout the year to connect entrepreneurs and innovators to key businesspeople and resources.

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Sparkman started his career in technology at Time Warner in 1993, where he led the book group’s early efforts in online publishing and commerce on CompuServe and the web. He holds a master’s degree in business administration from the University of California, Berkeley’s Haas School of Business.

 

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PBN: How did Slater Technology Fund come into being?

SPARKMAN: The Slater Technology Fund was created to restore the vibrancy of Rhode Island’s economy to its past heights and hasten its transition from a manufacturing base to one based on technological innovation. It was the brainchild of the state’s Economic Policy Council, led by a dynamic group of corporate leaders, including Paul J. Choquette of Gilbane Inc., Tom Ryan of CVS Pharmacy and William Hatfield of Bank of America.

The council advocated for the formation of an organization that could provide focused resources to entrepreneurs and researchers in the state, accelerating the formation of tech startups based on innovations emanating from its universities and institutions. There was early momentum from the Rhode Island Center for Cellular Medicine at Brown University, which helped launch biotechnology firms.

The business leaders advocated for, and from 1997 until 2013 the General Assembly funded, a series of satellite “Slater Centers,” with independent boards of experts that made grants and seed investments. That seed-funding activity launched two decades ago continues today, based on a mixture of internally funded operations and investment capital from government sources and private investors.

PBN: How does it all work?

SPARKMAN: At the highest level, money always follows people and innovation. Slater looks for ideas, entrepreneurs and technologists in the general orbit of universities and other institutions in Rhode Island and beyond, paying particular attention to sectors where research grants and follow-on investors can fuel the companies we seed. We do this on a rolling basis and are always eager to meet people.

We dig in when we find local entrepreneurs attacking big problems with technology, and when we think we can add value, we tend to get involved with seed and pre-seed convertible debt investments with the risk capital we’ve received or recycled from government sources.

In addition to capital, we’re probably most valuable when we’re able to help grow the founding team or make other key introductions. When the stars align, we lead seed rounds that pull in other seed investors. To date, almost $700 million has come into the companies we seeded.

PBN: Which industries do Slater’s ventures generally fall into?

SPARKMAN: Honestly, we try to take our lead from founders who are tackling some of the world’s hardest problems, whether that’s Alzheimer’s or cancer or next-generation energy. We’re also influenced by the research strengths and funding at the research institutions. Over the years, we have funded a number of companies in financial tech, life sciences, software/design, energy, and ocean tech, and have been pretty eclectic. We strive to be open to things that come out of left field, since I think it helps to be opportunistic or contrarian sometimes.

The guardrails of this are that need to stay in markets that can support very large ventures, and venture investors who will be interested in the companies we seed, so that often means focusing on technology and life sciences.

PBN: What are some shining examples of Slater’s work?

SPARKMAN: We have funded a number of very great technology companies that have gone on to achieve significant successes. Some examples include:

  • Andera: Founded by Brown University graduate Charlie Knoll, this fintech company developed an online account opening application for the banking industry. At its height, Andera employed over 100 workers, generated tens of millions in revenues, and was a leader in the financial services technology field, with more than 500 financial institutions as customers. The company was acquired by Bottomline Technologies in 2014, returning multiples of the capital invested by Slater, which we have been reinvesting.
  • Nabsys: Started in 2005 using technology licensed by Brown University, Nabsys is pioneering electronic whole-genome mapping. Since inception, the company raised more than $50 million in venture capital and employed 50 high-wage workers.
  • VoltServer: Founded by serial entrepreneur Steve Eaves, VoltServer is a breakthrough company reinventing how electricity is distributed. VoltServer’s patented Digital Electricity solutions deliver power to challenging applications safely and inexpensively. VoltServer began shipping in early 2015 and is installed today powering 4G/LTE mobile services in many large sports stadiums, smart infrastructure in office towers and hotels, and vertical farming.
  • Aquanis: A startup in the white-hot space of wind energy, Aquanis is developing a proprietary smart blade technology that modifies air flow over wind-turbine blades, enabling them to react to changes in the wind instantaneously to diminish unwanted aerodynamic forces, which is the limiting factor in making them bigger. The technology has the potential to enable the production of ultra-large wind turbines, which would achieve the Department of Energy’s goal of quadrupling domestic wind power generating capacity by the year 2020. Aquanis recently won a $3.5 million grant from the U.S. Department of Energy to continue the development of technology that could increase the power output of wind turbines.

PBN: How bullish are you on the state of entrepreneurship in Rhode Island?

SPARKMAN: It’s a good time to be an entrepreneur in Rhode Island. There’s a lot of momentum around entrepreneurship – in the past year alone, we’ve seen the launch of MassChallenge Rhode Island, the development of the Cambridge Innovation Center, the advent of Venture Café Providence, and other important developments.

All this, along with the ongoing efforts of the Nelson Center for Entrepreneurship at Brown University, the Social Enterprise Greenhouse, the Clean Energy Council, among others, is helping to create the kind of vibrant environment in which innovation and entrepreneurial activity can thrive. The key to success is ensuring that these emerging entrepreneurial ventures have access to startup capital.

Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.