But taxes, regulatory environment remain drags on growth

 

WALLINGFORD — Connecticut’s fastest-growing technology companies are bullish on the future. So found an annual survey of CEOs from this year’s Marcum Tech Top 40 companies, by the Connecticut Technology Council (CTC) and Marcum, LLP.  Results were revealed at the 2014 awards ceremony at the Oakdale Theatre in Wallingford.

More than three out of four companies (77 percent) expect to continue growing at their current fast pace. They credit their success to 1) workforce, 2) products, 3) intellectual property and 4) business strategy.

Thirty-one of the 40 finalists (78 percent) point to quality of life as Connecticut’s key attraction as a business domicile, while the other nine companies (23 percent) say location is what they most appreciate.

When asked their key worries about the future, finalists named:

• Availability of talent

• Government regulations

• The possibility of another economic slowdown

• Geographic limitations

• Foreign competition

 

In addition, given the opportunity, finalist CEOs said would ask Gov. Dannel P. Malloy to reduce the corporate tax burden and to provide more direct incentives to technology companies.

“This year’s survey findings underscore the great success Connecticut’s technology sector is experiencing and the challenges facing the state’s fastest growing tech companies,” said Bruce Carlson, CTC’s President & CEO (see related story, page 3).

Now in its seventh year, the Marcum Tech Top 40 recognizes technology leaders with at least $3 million in annual revenue and a four-year record of growth, in six industry sectors. Both privately held and publicly traded companies are eligible.

At the 2014 event on October 2, Norwalk -based Datto Inc. took top honors as the overall winner for the second consecutive year, with revenue growth of 1,436 percent since 2010, It also won in the IT Services category.  Other category winners included:

• Revolution Lighting Technologies Inc., Stamford (Advanced Manufacturing)

• FuelCell Energy, Inc., Danbury (Energy/Environmental Technologies)

• Alexion Pharmaceuticals, Inc., Cheshire (Life Sciences)

• iSend, LLC, Middlebury (New Media/Internet/Telecom)

• Square 9 Softworks, New Haven (Software)

 

For more information, visit ct.org.

 Mall-based portrait services now in Trumbull, Westfarms

 

Newton, Mass.-based start-up EverPresent, which helps families digitize and share media collections, continues its growth and expansion this fall with new local business partnerships, additional hiring and increased investment. The company’s services are now available in Connecticut and Rhode Island.

 

The two-year-old company recently closed its second round of angel investment, bringing its total current investment to $1.2 million. Prominent investors include former Facebook executive Chris Kelly, former Reebok CEO Frank O’Connell and Bessemer Venture Capital partner Chris Gabrieli. It also recently hired its 50th employee, after expanding to a new production facility in Watertown, Mass., earlier this summer.

 

This month EverPresent announces three new alliances:

 

• Portrait Simple — With seven locations across New England, the mall-based portrait will now provide convenient consultation and drop-off locations for EverPresent services. In Connecticut, the service will be available at Portrait Simple in Westfield Trumbull Park Mall as well as Westfarms Mall in Farmington.

• Geek Housecalls — This in-home personal and home technology support company,will offer EverPresent clients free 30-minute support calls when they finish a digitizing project, along with in-home pick-up of old photos and videos for EverPresent projects. Founded in 2001, Geek Housecalls has served more than 20,000 families, helping relieve frustration caused by technology.

• The New England Association of Professional Organizers (NAPO-NE) is collaborating with EverPresent on a four-hour training program, focused on organizing and preserving family history; more than 40 members have already received training at EverPresent’s Newton, Mass., headquarters.

 

The partnerships expand EverPresent’s in-person services from its home base in Massachusetts to Connecticut, Rhode Island and New Hampshire, via the Portrait Simple locations. In addition, 60 new employees are now trained to educate clients on the company’s services and products through Geek Housecalls and NAPO-NE. 

 

“The digital age has created amazing advertising opportunities, but I think we too often forget the power of small businesses working together to bring old-fashioned customer service directly to clients,” EverPresent CEO Eric Niloff said.  “When preserving irreplaceable photos and videos, families want local, trust, convenience and customization. By bringing together trusted, respected local companies, we’re going to make a lot of families really happy.”

 New Connecticut Technology Council boss Carlson sees opportunities to raise group’s profile

 

Bruce Carlson is the new CEO of the Connecticut Technology Council. Carlson had a 20-year stint as policy director at the state’s Office of Policy & Management, and ten as chief of staff at the UConn Health Center in Farmington, where he helped established the Tech Transfer Program for the University of Connecticut. Carlson is a former CTC board member before being tapped as interim and then permanent CEO. Carlson previously founded the IP Factory, a company that identified technologies in Connecticut companies that were languishing and could be brought to market.

 

Before we get to the Tech Council, do you think the Health Center should be a part of the University of Connecticut?

Yes. If it were located in Mansfield there wouldn’t be any question about it. The problem is the 40-mile difference between [UConn’s main] Storrs campus [and Farmington], and there’s a hospital involved. For ten years I tried to figure out ways to have the entities better connected. People in Connecticut just don’t want to travel. It’s hard enough to get faculty members to go across the street, much less 40 miles away to collaborate.

 

What was your initial involvement with the Connecticut Technology Council?

At UConn we were a member of the Technology Council, so I was on the board for two or three years in the mid-2000s. When I started my own company, the IP Factory, I utilized a few people I met on that board as board members for my company.

 

What was the IP Factory?

We identified technologies that were invented and put on the shelf of corporations. It was called the IP Factory because I thought we would do it specifically around intellectual property, but after the first year we realized there were more projects than just purely the intellectual property. A lot of the large technology corporations in Connecticut get something started and then it doesn’t meet their revenue hurdle or whatever the case may be, and then it just sits on the shelf. So we’d go through a quick process to determine which ones had commercial value and which ones didn’t.

 

How big of a factor would it be for Connecticut if many or all of those smaller technologies were unleashed?

Playing the networking game, I realize now that almost at the same time I started the IP Factory, UTC [United Technologies Corp.] was going through the same process, just internally. We finally had a meeting and they found they had 500 [potential] projects. It was technology that wasn’t so much on the shelf, but already on the marketplace with opportunity to be used in other markets.

 

Is there a role for the Connecticut Technology Council to help facilitate this out-migration of projects or companies?

We define those issues that affect the membership broadly then figure out ways to respond to those issues. There are also things we can promote. One area I feel strongly about is that there is a large company-small company relationship in Connecticut [that can be enhanced]. That large company could become the first customer of the small company; there are many ways that relationship can be defined. The idea of technology and projects coming out of corporations to create companies as well. I’m organizing our larger corporate members around a task force to look at those things they could do to help the small technology companies. If you can say, ‘Pitney Bowes is my customer,’ other people will take notice. I talked to 90 percent of the [CTC] board members and with other technology companies in the state and asked what they saw as the value of the CTC. The workforce issue was of consistent concern across every technology company in the state, so we’re working with various aspects of the workforce, connecting the deans at schools of engineering with HR people at these companies. [Also] Connecticut was falling behind the rest of the world in connectivity and broadband services. We’re looking to set up affordable high-speed broadband networks in Connecticut.

 

Why do we want the government in the Internet business?

These RFPs are put together by consortiums of municipalities or regional entities. The government could provide a subsidy to get the infrastructure off the ground, but the private sector is still where it’s taking place.

 

Connecticut has a lot of big companies who are huge users of Internet access. What is the reason we wouldn’t have a path that was already being generated in the marketplace?

It’s a question of return on investment. The Comcasts and AT&Ts of the world that have been stringing wires. They’ll string the fiber optic to Company X, and they’ll charge a significant amount of money for that access. In New Haven there might be too many impediments, and a company would delay doing it to avoid the hassle. For example, there is one company with a French parent, and [the parent company] was saying, ‘You should move out of New Haven because we need you to have the high-speed broadband.’  This RFP process is going to tell us what the impediments of being able to do this are, and last year there was a piece of legislation that was passed that provided a space on every telephone pole so municipalities can have strung high-speed fiber-optic cable. Once they understand what it’s going to take to have these networks put together, they’ll put out an RFP. Anyone who wants to come in and bid to put in the wire, there will be competition among the companies.

 

Why are so many viable technology companies not joining the CTC?

I think they don’t see the value of joining. If you don’t feel that that [interacting with] the larger [technology] community is important, then the services associated with being part of the CTC are not what the sale is. You need to understand that by virtue of being a member we’re creating this community, and the community itself is having an impact.

 

One of the things the CTC has done both well and poorly has been outreach to women. What can the council do to better identify and embrace women in the tech space?

We have to start much earlier than talking about women in [technology]. It really is an issue of what happens between fifth grade and ninth grade where girls are no longer interested in science. One of our interns is a graduate of UConn Medical School, and he tells me that 70 percent of his graduating class were women, and 65 percent of the class before his were women. It’s not that girls aren’t interested in science; they’re just going into a different direction.

 

Is Connecticut’s issue different than say, Brooklyn’s or Boston’s?

Boston has other issues that might make it more attractive to a young technical person, but when I talk to my counterparts around the country, this issue of lack of diversity across the board, for women in particular, is a concern.

 

Are you keeping all the major events the CTC does now?

We have four signature events: the Women in Innovation, the Tech Top 40, the Innovation Summit and the IT Summit.

 

What is the CTC’s relation to the health sciences? There is a lot of merging between IT and health sciences that didn’t exist 15 years ago.

So many companies are using IT whether in health sciences or advanced manufacturing. But within the state you also have the organization CURE [Connecticut United for Research Excellence, a bioscience advocacy and membership group]. We need to be tactful of what that organization is doing with life science and bioscience industries in the state versus what the CTC is doing.

 

What are companies saying they need?

There is a real concern about the transportation infrastructure. I’m trying to get more presence in the Fairfield County area. Every time I go down there, there’s always a conversation about transportation problems, whether it’s Metro North or trying to get anywhere on the highway. Depending on where you are, companies have pretty strong interests.

 

Because of the number and concentration of young people, only New Haven is really attractive to a certain kind of company among Connecticut cities. I don’t think Farmington is where people will establish technology companies.

You have to turn that around and ask what it is about Stamford, South Norwalk and New Haven that brings in the young people and makes them want to be there and work there, and transfer that to Meriden or other small places. We need to push our strengths, and we should capitalize on what we have in New Haven and parts of Fairfield County with the hope that it will spill over — just like a lot of the bioscience sector in New Haven is spilling into Branford, and from Branford into Guilford. They can come and get started here and grow in other parts of Connecticut.

 

What did you learn about state government while at OPM?

Mostly the need for collaboration. Having working with three political parties and different people in the General Assembly, the recognition that doing something on my own isn’t what’s going to get things done. You need to bring other people into the fold and work on that collaborative base to get things done.

 

Two years from now, what will you want to have accomplished?

To have the value proposition of being a CTC member well understood and have a significant increase in the number of members. When you have 2,500 tech companies in the state of Connecticut and only about 300 [CTC] members, there’s a real opportunity for growth. I want to have the Tech Council viewed as having a wide group of tech companies in Connecticut as its members. That helps whether you’re advocating on the public policy side or networking. It creates a lot of opportunities.  

 As the state’s quasi-public technology-investment arm, Connecticut Innovations Inc. (CII) is usually the one handing out dollars to startups and tech companies statewide. Now, it’s the one standing in line with its hand out.

 

CII is making no more funding commitments through the rest of 2014 as it hasn’t received any new state funding since a $23.6 million round in November 2013 (the last installment of an allocation originally approved back in 2000). Several subsequent allocation requests did not make it onto the state Bond Commission’s agendas for May and July. The commission’s August and September meetings were cancelled.   

 

Public relations director Lauren Carmody says that despite the setback, CII is not broke and still has money in the bank both to cover its own operating costs and to honor funding commitments made through September 17, when it pledged $4.7 million to five companies.

 

She expects CII will get the $50 million it now requests this fall and can resume investing by early 2015 (the commission meets again this year on October 31 and December 12).

 

“The delay is unfortunate, but temporary,” she says. “If we were running before, we’re walking now. We expect everything to be business as usual come November or December.” Carmody adds that the firm has reassured all the companies it’s working with that previous commitments will be honored. “We’ve gained an incredible amount of momentum and we don’t want to lose [that]. Companies are growing because of our investments, we’re having an impact in Connecticut and want to continue to do so.”

 

CEO Claire Leonardi also issued a statement emphasizing CII is secure and that while short-term delays in funding will affect some programs and contracts, sufficient funds remain for existing commitments.

 

Leonardi says CII goes before the Bond Commission about twice a year; she doesn’t know exactly why recent funding requests were tabled.

 

“They have a lot of projects and need to prioritize,’ Leonardi says. “The administration and Office of Policy & Management have been very supportive of us and we expect that in the future.”

 

CII was a significant beneficiary of Gov. Dannel Malloy’s 2011 Jobs Bill, which gave the agency $125 million in additional funding, allowing it to invest in twice as many companies annually as previously: 58 in 2012 and 60 in 2013 (including both new and existing portfolio companies), versus 33 companies in 2011.

 

According to Leonardi, CII has invested $67.5 million in more than 150 companies since 2011 mostly through existing resources and investment earnings, drawing on just $20 million of its Jobs Bill funding to date.

 

 NEW HAVEN — Are you an aspiring entrepreneur? Have an idea for a new business you want to develop and bring to market? Well, it’s time again to make it happen.

The fourth Startup Weekend New Haven is taking place November 14-16, throwing budding entrepreneurs and tech people together into groups to develop a startup company over 54 maddening hours, presenting at the close of the weekend to have a crack at three prizes that offer varying amounts of resources and investment cash to take their companies to the next step.

Applivate is to date the only Startup Weekend-birthed company to have brought its product — the diabetes-tracking smartphone app ShugaTrak — to market. The company emerged from New Haven’s first Startup Weekend in 2011; ShugaTrak went on sale in fall 2013.

For more information and to register for this year’s event, visit newhaven.startupweekend.org.

 WEST HAVEN — A University of New Haven (UNH) cyber forensics group has exposed a laundry list of security flaws in the Android smartphone platform that could affect as many as 968 million users.

UNH’s Cyber Forensics Research & Education Group (cFREG) exposed the security issues via five videos uploaded to its YouTube account (youtube.com/unhcfreg) in mid-September. The videos covered instances of security flaws, breaches of privacy and vulnerabilities in over a dozen chat, dating and social media apps on the Android platform including OKCupid, Instagram and Meet Me.

As demonstrated in the cFREG videos, the group tested the vulnerabilities on a Windows test network with an Android phone, allowing the group to monitor all sent and received traffic. Chats, photos and personal communications between two mobile devices were shown as being recorded and stored on the test network unencrypted, along with passwords and other private information. The companies behind each app involved in the trials have been contacted by cFREG about the group’s findings, which follow tests last spring that found security flaws in the WhatsApp text-messaging app.

cFREG was established in fall 2013 as part of UNH’s Department of Electrical and Computer Engineering and Computer Science to research digital forensics, security and privacy issues. The group includes students Daniel Walnycky of Orange, Jason Moore of Branford and Armindo Rodrigues of Bethel. cFREG encourages smartphone users to learn how to run their own security checks.

 WEST HAVEN — Local pharmaceutical firm NanoViricides is hot on the heels of the Ebola virus and the growing world public-health threat its reemergence is posing.

The company is currently progressing in development of novel drug treatments for the virus that may work in spite of mutations. It has some previous research into Ebola treatments under its belt already, but those were sidelined to finish development of its leading drug candidate, the anti-flu treatment Injectable FluCide, in 2013.

The company is currently in negotiations with regard to testing the eventual treatments and has the capacity to produce the drug for clinical trials at its Shelton manufacturing facility.

The World Health Organization reports a total 3,967 suspected Ebola cases and 2,105 deaths as of this September. The virus has no known cure.

 Looks like Connecticut’s technology infrastructure is movin’ on up.

The Center for Digital Government’s 2014 Digital States Survey, which biennially grades state governments on their use of information technology to serve the public, gave high marks to Connecticut with an A-minus grade. This was a big improvement from the last survey in 2012, when the state merely pulled a C.

The jump netted the Nutmeg State first place recognition as “Most Improved,” as well for “Adaptive Leadership.” Connecticut also earned second-place recognition in the “Health & Human Services” category.

Connecticut shared its A-minus grade with four other states (including Pennsylvania). Only three states earned an A (Michigan, Missouri and Utah).

New York earned a B grade, and Massachusetts a B-minus. Just one state got the lowest grade of C-minus: Alaska.

 MERIDEN — Vaccine and biopharmaceutical developer Protein Sciences has scored major funding for research into lung cancer treatments.

The company received a $669,156 grant from the U.S. Department of Health and Human Services’ National Cancer Institute, through its Small Business Innovation Research (SBIR) program.

The company will use the money, partnering with the University of California/Los Angeles (UCLA) and Beverly Hills biopharmaceutical company Vault Nano, to produce vaults (barrel-shaped molecular capsules) that deliver chemokine protein treatments directly to cancerous cells, while stimulating the immune system to identify and attack the cancer cells.

The company used similar technology to develop its flu vaccine Flublok. The new cancer drug is in early stage research.

 NORWALK — A California tech company is acquiring Bolt Technology in a $171 million deal.

Teledyne Technologies produces electronics for engineering systems, aerospace and defense, digital imaging (including software) and instruments. Teledyne is acquiring Bolt to expand its range of marine-instrumentation products.

Founded in 1965, Bolt produces marine seismic energy sources and parts for offshore energy exploration, as well as underwater cables and connectors, controllers and auxiliary equipment. It also designs and manufactures remote-operated underwater vehicles through its SeaBotix brand.

 ROCKY HILL — Connecticut Innovations Inc. (CII), the state’s quasi-public technology investment arm, has announced the upcoming launch of the fourth annual Sikorsky STEM Challenge. The event, designed to support STEM (Science, Technology, Engineering and Mathematics) education and workforce development by creating opportunities for students to apply their classroom learning and innovative thinking to real-life technical challenges, will ask nearly 150 students to reconfigure the Corsair aircraft to deliver as much potable water as possible in a 72-hour period from Beaumont, Tex. to Wichita Falls, Tex. Winners of the challenge will be awarded in May 2015 at the Student Innovation Expo in Hartford.

A kickoff event will take place from noon to 3 p.m. September 26 at the Connecticut Corsair Hanger, 61 Winthrop Road in Chester. To learn more or RSVP for the event contact This email address is being protected from spambots. You need JavaScript enabled to view it. or phone 860-257-2358