Venture forum let light shine on RI high tech

Potential investors, lawyers, state officials and other interested parties got a peek inside both new and established Ocean State high tech companies during the state’s first ever techno-centric venture forum. The June 4 Rhode Island Investment Forum was designed to showcase about 25 Rhode Island high tech businesses, which are in the early stages of development and seeking financing from private investors. It was one of the high tech highlights so far in 1999.

Event organizers from the Rhode Island Economic Development Corp. and the Rhode Island Technology Council said they were pleased with the turnout. It was held in Newport at the Doubletree Hotel, which features a lovely view of the ocean and Newport Bridge, to encourage private investors to make the scenic drive from Boston.

It appears the ploy worked since some 233 people registered for the event, according to David Croston, an EDC official assigned to help market Rhode Island’s high tech industry. State officials hope to make the venture forum an annual event, Croston said in an interview after the forum. The event also included a second track of programs, which highlighted research work being done at the Naval Undersea Warfare Center in Newport. NUWC’s program showcased work that is available to be developed for other industries.

“For a first-time event it was a resounding success,” Croston said. “To make it work we needed to bring down the firms from Boston – they came.”

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There were also investors there from New York and as far away as Maryland.

Some of the entrepreneurs who presented their company’s business plan have been in business for as long as six years and have received some investments funds already, but were looking for a second round of funding to continue to grow their businesses.

Christopher D. Graham, a partner in the Providence law firm of Edwards & Angell, said his partners decided to be one of the forum’s sponsors because they feel there is a need to hook up high tech entrepreneurs with investors. “It will allow entrepreneurs with great ideas to have access to capital,” he explained in an interview last month.

“We think there’s a lot of creative effort going on in Rhode Island; it’s just a well-kept secret,” Graham said.

Giulio DeConti Jr. and Peter Lauro, who are both Rhode Islanders and partners with the Boston law firm of Lahive & Cockfield, agreed the Ocean State’s technology industry would benefit from the investment forum.

“I think they should be doing more of this,” Lauro said of the event. “I think if you don’t offer a forum for a showcase of this type of business, it leaves the state.”

But the venture forum wasn’t the local high tech industry’s only highlight this year.

EDC also launched plans to begin promoting the software stock tax exemption, which took effect in January 1998 but is not yet widely known. State officials have decided to promote the tax incentive on billboards around the Route 495 and Route 128 loops of Massachusetts, in hope of catching the attention of high tech workers during their commute.

The tax incentive lets eligible employees from companies, which sign up for the benefit, avoid capital gains taxes on the money they earn from the sale of company stocks.

Rhode Island is the only state that allows such an exemption, which officials say is valuable because many software companies – especially startups with limited amounts of cash – use stock options to lure workers. In some cases, an employee’s options are worth more than his or her salary.

And in other news, a February employment trend report by CorpTech of Woburn, Mass., indicated more than 46 percent of New England’s “emerging technology manufacturers” plan to add new jobs this year. That could create about 2,675 new jobs in the region.

New England ranked fourth in job growth out of the 13 geographic regions surveyed by CorpTech.

The 113 Rhode Island companies that participated in the survey projected they would add 654 new jobs in 1999. That would be an 8.8 percent increase to the group’s current workforce of 8,088 workers. Of the Rhode Island businesses that responded to CorpTech’s survey, Internet and telecommunications firms reported the largest expected job growth.

The results showed an increase over the previous year’s survey, during which about 118 Rhode Island companies told CorpTech they had plans to add only 548 new jobs for a 5.3 percent growth rate. In January 1997 survey indicated that 101 companies planned only to add 332 job for a 4.2 percent increase.

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