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n e w h a v e n b i z . c o m | M a y / J u n e 2 0 1 9 | n e w h a v e n B I Z 9 WHAT'S YOUR SIGN? Easy money? Pawn shops offer cash on the barrelhead T R E N D I N G Pennies from heaven: 2019 off to great start for startups B E Y O N D T H E H E A D L I N E S P eople who patronize pawn shops to exchange their valuables for quick cash aren't there because the store is an interesting place (which they sometimes are), or because it's a good deal. Most patrons are there because they don't qualify for traditional financing from, say, a bank — and, above all, because they need the money right now. Customers sell items of value to pawnbrokers in return for cash on the barrelhead. e broker typically agrees to hold the item for a fixed period of time and then sell it back to the custom- er for the original purchase price, plus interest. Pawn shops thrive where their customers are, which is why you don't see a whole lot of them in Westport or Woodbridge. Instead, the places of businesses pictured here are located in Bridgeport, New Haven, Hamden and Milford. e Berlin Turnpike around Wethers- field is lined with the flashing neon lights of pawnbrokers by the dozen — a veritable boulevard of broken dreams. In Connecticut, pawnshops are licensed and regulated at the municipal level. At the state level, a pawnbroker refers to "a person who is engaged in the business of loaning money on the deposit or pledge of wearing apparel, jewelry, ornaments, household goods or other personal property or pur- chasing such property on condition of selling the same back again at a stipulated price." State usury laws cap the amount of interest pawnbrokers to 12 percent annually (before 2014 that figure was 2 percent per month or 24 percent in a 12-month period). Before that it was the Wild West — a Connecticut Post story detailed a Hartford pawn shop that charged its customers 60-percent interest a month — or 720 percent per year. And whether what's behind their storefronts is glitzy or skeevy, most pawnshops are filled with jewelry, automotive audio components and musical instruments (especially electric and acoustic guitars). Inter- estingly, buy-back loans typically account for only about a quarter of a pawnshop's revenues — the rest typically are purchases by "regular" consumers in search of great deals. Sometimes they find them. n T echnology startups in New Haven and Connecticut seek- ing investors to help them ramp up operations are going great guns in 2019 — so far. According to filings with the U.S. Securities & Exchange Com- mission, startup enterprises in Connecticut raised $109 million in funding between Jan. 1 and March 31, 2019 — more than five times what they raised during the same three-month window in 2018. New Haven companies have more than held their own in the startup sweepstakes. One of them, Kleo Pharmaceuticals, which is working to develop synthetic compounds that destroy cancer cells, raised $21 million in just one deal in November. at Series B financing round was led by the company's development partner, PeptiDream Inc., with partici- pation from New Haven-based Biohaven Pharmaceuticals Inc., Kleo's founding investor. A minimum of $100,000 in venture capital and other forms of growth funding are factored into the SEC report, and any funds contributed by publicly traded companies or hedge funds are omitted. Douglas Manion, Kleo's CEO, said at the time that proceeds from the November deal would allow the company to advance its re- search into human clinical studies. In February, New Haven marked the opening of Quantum Circuits Inc., a Yale-incubated startup working to develop the first practical quantum computers. In 2017, Quantum Circuits raised $18 million in financing from venture capital firms including Westport-based Canaan Partners and Sequoia Capital. At Quantum Circuit's February ribbon-cutting ceremony, Yale Vice Provost for Research Peter Schiffer stressed the university's commitment to supporting local startups, a majority of which now are hatched from its research labs. "e story of [Quantum Circuits] illustrates the potential to leverage university research to create jobs and to drive a competitive, high-tech economy," said Schiffer, according to the Yale Daily News. "Yale is proud of all of the startups based on Yale inventions, and we look forward to working with the private sector and the state to build more com- panies in New Haven." Over seven of the most recent nine quarters, New Haven com- panies have accounted for more than half of all funds raised by Connecticut startups. And that figure varies widely year to year. In 2017, Connecticut startups as a whole raised about $400 million in financing. e following year, 2018, that figure dropped to just $222 million statewide. In 2017, Verizon Communi- cations named New Haven the most promising market in the United States for a tech startup — ahead of even cities such as San Francisco, New York and New Orleans. n — Michael C. Bingham Robert Schoelkopf, co-founder and chief scientist of New Haven-based Quantum Circuits, which has raised some $18 million in venture funding.

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