HBJ quotes FML on startup capital and IPOs in CT

By Frank Milone, CPA, Founding Partner, Assurance & Advisory Services
Aug 08, 2023

The Hartford Business Journal recently published an article on how a lack of IPO activity has slowed the growth of Connecticut’s bioscience and tech industries. This is not surprising news, and is part of an overall national trend as markets react to inflation and rising interest rates.

The alliterative and appropriate headline of this article is “Capital Crunch.” In a June article for Crunchbase about the options startups have to raise money in a downturn, I wrote that “the big investment checks of 2021 are starting to be pretty far in the rearview mirror.”

As this article states, Branford-based Azitra and Westport’s Intensity Therapeutics are the only two Connecticut companies to go public since December 2021. Matt McCooe, CEO of Connecticut Innovations, puts it bluntly: “The IPO market is basically closed for the moment.”

Here are some excerpts from where I was quoted in the article:

The dearth of readily available capital has taken its toll in Connecticut, with companies cutting head count and scaling back programs.

“Emerging companies are really trying to focus on stretching cash and minimizing expenses,” said Frank Milone, co-founding partner of Glastonbury-based accounting and advisory firm FML. “(Companies are) finding ways to focus on really critical path-related activities to get them to as many of the strategic goals or milestones that they’re really looking to accomplish.”

Josh Geballe, senior associate provost for entrepreneurship and innovation at Yale and a former tech executive and chief operating officer in Gov. Ned Lamont’s first administration, said Connecticut has actually weathered this market downturn relatively well, compared to the rest of the country.

Milone agrees, adding the state is still well positioned in terms of innovation and early-stage activity to jump back into any market rebound.

And there are signs of hope. Renaissance Capital in July said “the backlog appears brimming with solid IPO candidates,” and it expects a steady rise in listings in the second half of this year.

“These are normal ebbs and flows of the market,” Milone said. “And I think Connecticut is continuously developing itself to support these companies. So, the overall investment is going to make our companies able to recover probably quicker.”