PROVIDENCE – Rhode Island’s venture development efforts will get $12 million in federal funding via a new agreement between R.I. Commerce Corp. and the Slater Technology Fund.
Under the agreement, reached in September and announced this week, Slater will manage and allocate $12 million out of a total $31.5 million in State Small Business Credit Initiative funding awarded to R.I. Commerce.
Slater, the state’s most active venture capital firm, “will use the funding to help dynamic companies access venture capital to grow quickly in Rhode Island,” the firm said in an announcement.
Two other venture capital firms, which Commerce has yet to announce, will manage the remaining $19.5 million in SSBCI funding.
“The real impact here is not what it means for Slater,” said Thorne Sparkman, the firm’s managing director. “It’s what it means for Rhode Island’s youngest companies — the ones that are just getting started.”
And with the Ocean State ramping up its efforts to support startups and larger companies in the biotech and life science sectors – with projects including the ongoing construction of a 212,000 square-feet, seven story building to house a state health lab, lab space for Brown University and other biotech initiatives – the federal funding comes at an ideal time, Sparkman said.
“Right now, we’re on the cusp of having there be all kinds of wet lab infrastructure increases,” Sparkman said, “so you can think of it as being phase two of what started with the CIC … It couldn’t have come at a better time for Rhode Island entrepreneurs, especially in life sciences.”
Slater entered a similar contract with Commerce in 2012, managing $9 million in SSBCI capital that the fund invested into 26 companies though 2021. Those initial investments resulted in $240 million in follow-on private capital from private investors ad non-dilutive sources, Slater says, and five liquidity events totaling $7.3 million.
Sparkman expects that Slater will close on at least two deals by Christmas, and that the funding can reach 30 or more companies over the next five years.
Most investments will go to companies Slater previously hasn’t worked with, Sparkman said, though some ventures already working with the fund could qualify for reinvestment.
In a statement, R.I. Commerce Secretary Elizabeth Tanner said that the funding will mitigate “limited access to capital, including venture capital,” which she called “a major barrier to [business’] growth and long-term success” and “elements critical to our state’s economy.”
The funding will “assist [businesses] in expanding, creating high-quality jobs and contributing positively to the economic growth of our state,” Tanner continued.
Jacquelyn Voghel is a PBN staff writer. You may reach her at Voghel@PBN.com.