At Founders & Funders event, talk turns to getting more in-state interest for early stage companies

By Anjalee Khemlani
Newark | Nov 2, 2018 at 6:55 am

The state has seen significant growth from out-of-state investors interested in New Jersey companies, but the Economic Development Authority is trying to help cultivate greater interest in the state with early-stage companies.

That was apparent at the latest Founders & Funders event — which is essentially a one-on-one speed dating-like session with technology and life sciences companies and potential investors — which took place for the first time at Newark Venture Partners.

NVP, which was founded by Audible CEO Don Katz, hosted 17 angel and venture capital investors from around the mid-Atlantic region. Companies also met with Martinson VenturesGoldin Ventures and Jumpstart NJ Angel Network.

Gov. Phil Murphy attended the event to help promote it and the state’s commitment to the innovation economy.

“The interplay among entrepreneurs and investors is key to spurring the growth of emerging companies and is a critical component of our vision to make New Jersey the ‘State of Innovation,’” Murphy said. “New Jersey Founders & Funders is a prime example of the Garden State’s innovation ecosystem in action, and we look forward to hearing about subsequent meetings and partnerships that result from today’s event.”

Murphy also discussed the still-in-progress legislation that would open up a new avenue for the state to be involved in investment through the Evergreen Investment Fund.

Kathleen Coviello, vice president, technology & life sciences investments, at the EDA, also talked about the Angel Investor Tax Credit.

“Many investors in the room have taken advantage of the angel investor tax credit program in the state — it’s at 10 percent today,” she said.

The statistics for this particular tax credit have been interesting, Coviello said.

More than 50 percent of the investors are from out of state.

Chinese investors, she said, are following an interesting trend. They reinvest the checks they receive into the companies they are investing in.

“If you invest in a New Jersey company that has 75 percent of their employees here, we give you 10 percent of that back if you’re from out of state,” Coviello said.

“What we’re seeing in our incubator, on the life sciences side in particular … is that the Chinese investors are putting big checks into the life science companies in our incubator.

“Because this is a refundable tax credit, if you don’t owe any liabilities to the state of New Jersey, the state sends you a check for 10 percent of your investment amount. These investors are then taking that 10 percent and reinvesting it back into the companies.  Which is a huge home run. We want more investment dollars. We want them going into New Jersey companies.”

Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem