The Boston Globe’s weekly Ocean State Innovators column features a Q&A with Rhode Island innovators who are starting new businesses and nonprofits, conducting groundbreaking research, and reshaping the state’s economy. Send tips and suggestions to reporter Edward Fitzpatrick at email@example.com.
This week’s Ocean State Innovators conversation is with Thorne Sparkman, managing director of the Slater Technology Fund.
Question: What is the Slater Technology Fund, when was it created, and where is it based?
Answer: The Slater Technology Fund is a not-for-profit venture capital fund dedicated to supporting early-stage technology ventures in Rhode Island. The current Slater Technology Fund was created in 2005, but its predecessor organizations go back to 1998. Today, the company is based at the CIC in Providence, in the Wexford Innovation Center at 225 Dyer St. It has been in Providence for some time, but the predecessors were located at universities and other research institutions.
Slater has invested over $38 million over the course of two decades, with the original capital coming from the Rhode Island legislature. Starting in 2012, Slater’s capital came from a federal government program called the State Small Business Credit Initiative. Today, our investments also come from evergreen capital, which is reinvested from the original investments, and from private investors.
Q: What are some examples of how the fund has helped to find commercial purposes for research done at colleges in Rhode Island?
A: The Slater Fund was the first investor in Vitae Industries, which came out of student and faculty work at Brown University. We worked with them during their time at the B-Lab, Brown’s accelerator, as they transitioned from a software solution to suggest doses for vitamins, to a robotics tool for compounding pharmacies.
We have also worked closely with the Enhanced Energy Group, a team out of the Naval Undersea Warfare Center with experience in torpedo engines. After lots of customer development, it has built a successful company that produces onsite non-emissive power plants for the petroleum industry.
It is the dedicated founders who do the hard work of breaking down the barriers they face along the way to commercialization. But the Slater Fund can help them in that journey.
Q: How has the coronavirus pandemic affected the Rhode Island economy in general and the innovation economy in particular?
A: There are many companies that have been negatively affected by the general downturn in economic activity, and those come in all stripes, unfortunately. The biggest problem for innovation companies generally is that the pandemic makes raising money harder. Investors are more conservative, especially on new investments, and most are less liquid.
There are a lucky few early-stage companies that have caught a tailwind from COVID-19 — for example, GoPeer, which is facilitating online tutoring, and companies in what I think of as the “digital living” space, such as HappyNest’s online laundry service, or Feast and Fettle’s outsourced chef-prepared meals.
Q: How can Rhode Island avoid its past pattern of being the first in and the last out of recession? In other words, what do you see as the main area where Rhode Island needs to invest in order to bounce back from the pandemic-induced recession and have a vibrant economy in the future?
A: It’s deceptively simple: We just have to get better at the entrepreneurship part of the innovation engine so that we can be a player in the advanced industries springing up all around us. Being a small state doesn’t help, frankly, but the payoff of having an entrepreneurial culture and ecosystem is so big that we have to keep plugging away at it and make a pattern out of our successes.
Some, like Andera that was acquired by BottomLine, or Semma that was acquired by Vertex, or Location that was acquired by CoreLogic, will spawn the next generation of entrepreneurs and angels. It sure would be nice to have one become public and be a true anchor tenant around here.
Q: What is the biggest obstacle that entrepreneurs face in Rhode Island and what can be done to remove that obstacle?
A: The key to success in many realms is assembling the right team to attack the problem, and that is especially true in technology startups. The obstacle is that we’re just empirically small, and not particularly densely populated by the serial entrepreneurs that attract the most resources.
So we can either bet more heavily on underdogs, or we can get creative about recruiting aggressively, or start to envision how companies naturally transcend state borders because they are virtual and international. The best elements for success come from a wider catchment area.
Q: What can Rhode Island do to be better connected with the Boston economy and benefit from the technology sector there?
A: We should all be going to events that are a train ride away, and networking broadly all the time. I do it constantly because the connections will drive the company creation. It used to be you could go to just the MIT Enterprise Forum, but now every night is saturated with possibilities. Use the CIC as a bridging institution, or the Northeast Clean Energy Council — they are both regional and all about ecosystem creation.
Whether by Zoom or Amtrak, connecting with other passionate entrepreneurs and technologists feeds the fire.