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A Providence Business News review of Slater Technology Fund investments over 15 years shows decidedly mixed results.
Its $3.4 million return on investments of $23.4 million is poor by any measure. But it is only recently that the fund, which receives $2 million in annual state funding, has increased its focus on equity investment.
For many years job creation was the only focus and firms were often given grants that didn’t need to be repaid, or business-incubation assistance. Approximately one-third of the $35.2 million taxpayer contribution to Slater since 1997 has gone to operating costs.
The fund now has only three full-time employees and the days of annual state assistance are clearly numbered.
The fund’s state budget was slashed by one-third in 2010, to $2 million. And Gov. Lincoln D. Chafee has proposed another $500,000 cut in fiscal 2013.
Fund managers know they must use a $9 million federal grant to move Slater closer toward self-sufficiency. But the goal needs to be more than survival if it is to have a measurable impact on the state economy.
Managers want the fund to grow to $10 million in annual investments. With state support dwindling, there is only one way to do that: operate more like a true venture-capital fund, generating consistent returns on investments that can be reinvested in other promising ventures. •