A missed opportunity with Slater?

The Slater Technology Fund is a nonprofit investor in innovative startups. It provides seed and early-stage capital for new tech companies, allowing them to purchase equipment, fit out labs or help cover payroll.

It is a player in the innovation economy that was identified by the Brookings Institution report this year as a priority for the state.

So where is the state support? For the second consecutive year, the nonprofit tech fund received no financial help from the state.

As far back as 2010, Rhode Island started phasing out support to the nonprofit, under the premise that federal sources of support and its own activities would cover the needs.

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Slater continues to invest in startups and entrepreneurial ideas, drawing since early 2015 on the second of three phased releases of some $9 million in federal funds. But it does not have direct help with its operational expenses. The federal support can only go to company investments, said Richard G. Horan, senior managing director.

Although Slater has had discussions with state officials about reopening support, nothing materialized this year. “One of the most compelling opportunities in economic development is in the innovation economy,” Horan said.

He suspects that the state’s experience in investing in the failed 38 Studios continues to have a hangover effect.

“Of course I’m disappointed there’s not more support in the public sector for what we do,” he said.

Neither Gov. Gina M. Raimondo nor R.I. Commerce Corp. Secretary Stefan Pryor could be immediately reached for comment.

In an emailed statement from Commerce RI spokeswoman Melissa Czerwein, the agency argued that its programs and funding “are able to provide small businesses and startups with the tools they need to grow.”

Slater, however, says it does not duplicate Commerce offerings.

Established in 1996, Slater has received a total of nearly $40 million from the state. Slater has invested $30 million directly in 120 companies in that time. Additional capital raised by Slater-backed ventures has exceeded $550 million.

Since 2014, its direct investment has increased from about $750,000, before the second phase of federal funding kicked in, to $2.5 million in fiscal 2016.

Geoffrey B. Davis, an attorney and chairman of the Slater Technology Fund board, thinks the fund deserves direct support from the state, given its interests in developing bioscience and tech-related jobs in Rhode Island. It is critical to help companies at the early stages, he said.

“If you have a renewed focus on economic development, you might want to revisit the decision to stop funding for Slater,” Davis said. •

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