Connecticut's State-Backed VC Fund Nears $8.2 Billion in Deal Value

Three startups backed early by Connecticut Innovations have generated roughly $8.2 billion in combined deal value, led by a $4.6 billion public biotech that began with a $100,000 state check.

The quasi-public investor, which now runs close to $600 million in assets under management, also holds a paper gain from Halda Therapeutics, which a buyer agreed to acquire at the end of 2025 for $3.05 billion. Add in Quantum Circuits, which sold recently for $550 million, and the trio of transactions dwarfs the fund's entire deployed capital to date.

Veradermics, the biotech in question, went public earlier this year. Its stock has surged more than 550%, lifting the company's market capitalization past $4.6 billion. CI wrote the very first check into the company.

What does CI actually do?

Connecticut Innovations, known as CI, was formed by the state in the late 1980s to deploy capital into local startups and to create jobs. Those twin mandates remain. The operating model, though, has shifted toward a traditional venture firm. Compensation now matches the private sector. The fund invests using standard NVCA documents. A portfolio operations team supports founders between financings.

CI has not pulled fresh money from Connecticut taxpayers in roughly a decade, recycling returns from prior investments instead. The board remains politically appointed. CI also administers Connecticut's allocation under the federal SSBCI program.

How does CI deploy capital?

CI writes about $50 million in new checks each year. Roughly half goes to life sciences, a category lifted by spinouts from Yale and the University of Connecticut. The fund also operates a dedicated climate-tech vehicle and backs around 15 third-party venture firms whose general partners maintain a Connecticut presence.

CI has ventured outside state lines for a small number of deals, including startups in Canada and Israel, with the stated goal of nudging those companies to open U.S. operations inside the state.

What happens if a company leaves Connecticut?

Senior managing director Matt Storeygard draws a sharp line between the fund's mandate and the obligations that come with a public-sector origin. "If a company ultimately doesn't grow in Connecticut — for example, it hires someone here and later eliminates that position — that doesn't trigger penalties or clawbacks," he said. "It simply makes it less likely we'll participate in future financing rounds."

Why Connecticut, and why now?

Storeygard argues the state's lack of a singular identity is its advantage. The fund does not chase consumer-app founders or commodity energy plays. Biotech, climate, and quantum computing dominate the pipeline.

"I see lots of people want to create the 'Silicon Valley of the Midwest' or the 'Silicon Valley of Florida' or whatever," Storeygard said. "I think Connecticut has a lot of potential in a lot of areas, but we also know what does and doesn't make sense for us ... Obviously we're going to focus more on something like biotech than on oil and gas."

Connecticut sits between two of the densest venture markets in the country — New York and Boston — and the geography has long drawn shrugs from coastal investors. The exits of the past 18 months complicate that narrative. The fund's near-term test is whether the recent realizations translate into a sustained recycling engine. With $4.6 billion of public-market value sitting in Veradermics alone, CI's next deployment cycle will be its largest to date, and the eventual monetization of that position will determine whether the Nutmeg State can keep funding the next Veradermics without ever asking the legislature for another dollar.