Issue link: https://nebusinessmedia.uberflip.com/i/1471059
22 HARTFORDBUSINESS.COM | June 20, 2022 Gerald A. Michaud is the president of Farmington-based Horizon Technology Finance Corp., which provides debt financing to venture-backed growth startups. HBJ PHOTO | STEVE LASCHEVER Equity market's struggles offer growth opportunity for debt financier Horizon Technology By Andrew Larson alarson@hartfordbusiness.com A small Farmington publicly- traded company is weathering the choppy equity markets with poise, hiring employees for six new positions, including vice president of operations. Horizon Technology Finance Corp. provides debt financing to development-stage companies that are backed by venture capital. The company's portfolio, which stood at $300 million at the beginning of 2020, has more than doubled to about $700 million today. The stock market's struggles this year have created strong demand for debt financing — and "a lot of opportunity for Horizon," said President Gerald A. Michaud. He said the firm's investment pipeline is at historical highs as market conditions have made it more expensive for companies to raise capital. Greater demand for debt financing has spurred Horizon's hiring spree, and it allows the company to be more selective about its investment choices. "Venture capitalists are providing the equity; we are providing the debt," Michaud said. "The investment strategy is around providing incremental debt to companies trying to create more value without having to do more equity in the marketplace. So, they can get to a higher valuation with financing that is less diluted than equity would be." Debt financing Horizon Technology benefits from market cycles where fledgling companies are growing and need additional capital to achieve profitability, especially when debt is a better source of capital than equity. "We used to have between $200 million and $300 million in opportunities we were looking at, at any time — now we're over $1 billion," Michaud said. Horizon underwrites and manages loans to companies in the technology, life sciences, healthcare information and services, and sustainability industries. One of Horizon's most important markets is sustainability, which Michaud said is growing "nicely," even in the difficult market. It has provided loans to organic foods, recyclable packaging and environmentally-friendly construction material companies. Michaud AT A GLANCE Company: Horizon Technology Finance Corp. Industry: Debt financing Top Executive: Robert D. Pomeroy Jr., Chairman & CEO HQ: 312 Farmington Ave., Farmington Website: horizontechfinance.com Contact: 860-676-8654