Hartford Business Journal

HARTFORDBUSINESS.COM | September 26, 2022 35 Michelle Cote, director of Launc[H]artford, said startup acquisition activity is one of the best signs for the overall health and maturation of a startup ecosystem. PHOTO | CONTRIBUTED "From our perspective, we celebrate that type of next-level expansion." A number of recently-acquired companies — including Alexion, Biohaven, Biorez, Diameter Health, Payveris — have received invest- ments from Connecticut Innovations, which means the quasi-public agency gets a return from the buyout. Cote said organizations like Launc[H] try to court new tech companies to establish a presence in cities like Hartford, so there's some give and take when it comes to startups moving into the state or leaving. "Especially in this day and age of tech companies being more and more remote, I don't see the threat that an acquisition by a parent automatically means that they're going to have to pull up out of Connecticut and move out someplace else." David Lehman, commissioner of the Department of Economic and Community Development, said the state often reaches out to companies after merger deals are announced. "We want to make sure they know we're focused, we care, and certainly we want these businesses to remain in Connecticut," Lehman said. To be sure, deals don't always favor the state, particularly when larger, more well-established compa- nies are involved. CVS Health's purchase of Hartford health insurer Aetna and Farmington-based United Technologies Corp.'s merger with Raytheon Technologies, which moved the headquarters to Massachusetts and soon to Virginia, have lessened the corporate influences of both companies in Connecticut. Startup support Lehman said making Connecticut an innovation hub is important to the state growing its startup ecosystem, whether that's through venture capital opportunities, accelerator programs or something in-between. Startups are competitive and push each other to be better, he said. Recently, the state has added about 1,100 new startup businesses a month, he added. "That's one of the reasons Silicon Valley has been so good — you have a lot of competition and you have a sharing of employees and turnover where one person learns something, then they might go to their next company, have a new idea or start their own company," Lehman said. Rosow said Connecticut's network of business accelerators and inves- tors has been supportive of his company and others he's started up in the state. "This is the second startup I've been involved with that involved Connecticut Innovations," Rosow said. "And if I do it again, I'm abso- lutely going to go back to CI again. They've been fantastic from day one and very supportive." Goldwasser said Payrailz didn't take advantage of a lot of the resources the state offers startups, but pointed to incubator programs in New Haven and Hartford as options for new companies. "Connecticut's great for startups," Goldwasser said. "The state does offer a lot of things." Carstensen, the UConn econ- omist, said startups can still grow after being acquired, but it often looks different. "But they're growing now under a corporate umbrella," Carstensen said. Carstensen said Connecticut has a plethora of highly skilled workers and a network of universities that churn out students in high-demand industries, which incentivizes some acquiring companies to want to maintain a presence here. "If we have a lot of biotech compa- nies, it means we have the workforce with the skill set that those compa- nies need," Carstensen said. Still, Lehman and McCooe said they prefer having in-state compa- nies be the acquirer rather than the acquired. The hope is that more Connecticut companies will purchase smaller businesses and grow with a headquarters in the state. Over time, more jobs move closer to where headquarters are located after acqui- sition, McCooe said. "We're going to need more of our companies to be the predator and not the prey," McCooe said. Take on 26.2 miles, 13.1 miles, the 5K or get a team together for the marathon relay! HartfordMarathon.com SATURDAY, OCTOBER 8 David Lehman

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