Key Takeaways
- • Connecticut venture funding in H1 2015 totaled $70.4 million across 32 companies, representing a 72% decline from the $253 million raised in H1 2014, despite marginal sequential improvement from Q1 to Q2.
- • Q2 2015 saw 19 Connecticut companies raise $36.6 million compared to 13 companies raising $33.8 million in Q1 2015, showing modest quarter-over-quarter growth but sustained underperformance relative to historical benchmarks.
- • Rhone Apparel, co-founded by Nate Checketts and Kyle McClure, led state funding with a $7.8 million equity raise for its men's fitness apparel business, followed by American Halal's $6 million funding round.
- • Connecticut's venture capital weakness persists despite robust regional activity, with New England and New York registering their second-largest venture funding totals in 15 years during Q1 2015, highlighting a significant state-level divergence.
- • Entrepreneurs like Checketts report favorable conditions for private capital fundraising in Connecticut, suggesting disconnect between founder perception of opportunity and actual deployment of venture capital into the state's startup ecosystem.
Summary
Connecticut's venture capital market remained severely depressed in the first half of 2015, with year-over-year funding collapsing 72% despite modest sequential growth within the period. Statewide venture funding totaled $70.4 million across 32 companies in the first six months of 2015—a fraction of the $253 million raised across Connecticut companies during the same period in 2014, according to tracking by Hearst Connecticut Media Group and corroborated by quarterly analysis from PwC and the National Venture Capital Association.
The funding drought created a stark regional disconnect. While New England and New York state registered their second-largest venture funding totals in 15 years during Q1 2015, Connecticut experienced the opposite trajectory. Q2 showed marginal improvement, with 19 companies raising $36.6 million compared to 13 companies raising $33.8 million in Q1, yet this sequential gain failed to reverse the broader contraction. The 2014 H1 period had marked Connecticut's strongest venture funding performance since the 2001 tech bubble, making the 2015 decline especially pronounced.
Rhone Apparel emerged as the quarter's leading fundraiser, securing $7.8 million in an equity sale. Co-founder Nate Checketts, who estimated approximately $50 million in cumulative venture investment experience, attributed his company's fundraising success to favorable market conditions. "It's a favorable time to raise funds," Checketts stated, emphasizing that entrepreneurs often underestimate available private capital opportunities within Connecticut. Rhone Apparel, which develops fitness apparel for men alongside co-founder Kyle McClure, demonstrated that select companies could still access capital despite the statewide funding environment. American Halal followed as the second-largest funding recipient at $6 million.
The divergence between founder sentiment and actual funding deployment underscores a critical challenge for Connecticut's startup ecosystem. While entrepreneurs report accessibility to private capital and optimism about raising conditions, aggregate venture funding figures reveal persistent capital scarcity relative to historical performance and regional comparables. This misalignment occurred ahead of anticipated pension fund infusions into Connecticut venture capital vehicles, suggesting structural headwinds affecting the state's ability to attract and deploy venture capital despite broader economic recovery in neighboring regions.
The funding drought created a stark regional disconnect. While New England and New York state registered their second-largest venture funding totals in 15 years during Q1 2015, Connecticut experienced the opposite trajectory. Q2 showed marginal improvement, with 19 companies raising $36.6 million compared to 13 companies raising $33.8 million in Q1, yet this sequential gain failed to reverse the broader contraction. The 2014 H1 period had marked Connecticut's strongest venture funding performance since the 2001 tech bubble, making the 2015 decline especially pronounced.
Rhone Apparel emerged as the quarter's leading fundraiser, securing $7.8 million in an equity sale. Co-founder Nate Checketts, who estimated approximately $50 million in cumulative venture investment experience, attributed his company's fundraising success to favorable market conditions. "It's a favorable time to raise funds," Checketts stated, emphasizing that entrepreneurs often underestimate available private capital opportunities within Connecticut. Rhone Apparel, which develops fitness apparel for men alongside co-founder Kyle McClure, demonstrated that select companies could still access capital despite the statewide funding environment. American Halal followed as the second-largest funding recipient at $6 million.
The divergence between founder sentiment and actual funding deployment underscores a critical challenge for Connecticut's startup ecosystem. While entrepreneurs report accessibility to private capital and optimism about raising conditions, aggregate venture funding figures reveal persistent capital scarcity relative to historical performance and regional comparables. This misalignment occurred ahead of anticipated pension fund infusions into Connecticut venture capital vehicles, suggesting structural headwinds affecting the state's ability to attract and deploy venture capital despite broader economic recovery in neighboring regions.
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