Raimondo’s Venture Fund Company Received Contracts While Husband Chaired Prov. Water Supply Board
Wednesday, October 29, 2014
Gina Raimondo’s Point Judith Capital poured millions into Envista Corporation, a Massachusetts firm specializing in “map-based coordination of smarter streets.”
In two separate rounds of investments, Point Judith Capital participated in a total of $9.1 million investments, and within months of those investments, the Providence Water Supply Board, chaired by Raimondo’s husband, entered into contract with the firm.
Starting in 2007, Point Judith Capital, a venture capital fund, and two other venture funds -- Borealis Ventures (Hanover, NH), Egan-Managed Capital (Boston, MA) -- invested $5 million into Envista’s Series “A” round.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTLess than a year later, Envista announced in a press release that it was tapped by the Providence Water Supply Board to do work. The Providence Water Supply Board Chairman was Andrew Moffit (husband of Raimondo) at the time of the agreement.
Moffit was named to Chair the Providence Water Supply Board by then-Mayor David Cicilline in the mid-2000s. Professionally, Moffit was then -- and is now -- a consultant at McKinsey and Company. The firm tagline is the "trusted advisor and counselor to many of the world's most influential businesses and institutions".
In 2008, Envista CEO Rick Fiery said, “As you can see in the example of the greater Providence area, infrastructure is highly complex and interdependent. The job of coordinating projects among the various organizations building and maintaining our infrastructure is huge. Until now, these organizations (Providence Water Supply Board and other entities) have been working without the benefit of any automated coordination methods. Envista addresses these issues with its breakthrough technology solution."
For early stage companies, high profile customers are critical. They add credibility and show investors and future customers that the company is real and, most importantly for investors, the company can scale. In 2009, Envista was again before the City of Providence with a request from the Providence Water Supple Board. This request was from Providence Water Supply Board and included a contract - the first year was no charge and the next year was $20,000. Later contracts jumped to $37,500.
Another Round of Investment, Another Contract
By 2010, Point Judith Capital was exploding and according to its website at the time, the firm “managed $100 million across two funds.” Early stage companies like Envista aligned with its target investments. “In most cases, we are investing in a company's first or second round of institutional funding. Our initial investments range from $500,000 to $3 million, and over the life of a company we typically invest a total of $4 to $6 million.”
Raimondo was listed as Point Judith’s top line of management as her title was then Co-Founder and General Partner. She was also thinking about running for public office in Rhode Island.
Envista in 2010 was seeking more capital. According to some, the company’s cash burn rate was out stripping its revenue and others say the company was looking to grow. Regardless, Envista sought a new round of funding of $7.6 million according to Envista documents.
In order to raise capital, Envista touted its growth in new customers and its renewals. “Among the customers renewing their subscriptions to Envista web solutions are the cities of Baltimore, MD; Lowell, MA; Providence, RI; Sacramento, CA; and Washington, DC, as well as the Providence (RI) Water Supply Board, Trigen-Baltimore Energy Corp., and Washington (D.C.) Gas,” touted Envista. As Envista scored renewals in key markets like Baltimore, Sacramento and Providence with the Providence Water Supply Board, Raimondo’s Point Judith was investing in the next round.
On November 29, 2010, Envista announced it had contract renewals in Providence with the Providence Water Supply Board and on December 1, 2010, Envista sent out a business press release, “Envista Corporation Raises $4.1 million in Venture Capital.” See the SEC document filings.
Again in this round, Raimondo’s firm had invested and held its position in the company. “[Envista] has secured $4.1M from seven investors toward a $7.6 million equity-based funding round. The company’s initial investors included New England-based Borealis Ventures (Hanover, NH), Egan-Managed Capital (Boston, MA), and Point Judith Capital (Providence, RI),” Envista announced.
By this time, Raimondo had been elected in the November 2010 election General Treasurer of Rhode Island. Raimondo announced that when she took office she would place her investments in Point Judith and other funds in a Blind Trust.
As GoLocalProv reported in May of 2013, “General Treasurer Gina Raimondo earned as much as $500,000 in capital gains from her former venture capital firm last year, dwarfing her state salary of $108,808, according to her annual financial disclosure report filed last week with the Rhode Island Ethics Commission."
The exact amount of her earnings has not been disclosed. Instead, state disclosure forms only ask state officials to specify a range, which for Raimondo was between $201,000 and $500,000 in capital gains, meaning she earned at least double her salary. Some of those earnings could stem from the more than $4 million in pension funds the state invested in her former firm, Point Judith Capital, before Raimondo was elected. But the form does not require that level of detail for financial interests that were put into a blind trust after her election in November 2010.
In that same article by GoLocal, Michael Downey, the president of the AFSCME Council 94, described the news as “startling” and eye-opening for someone like himself, who represents members who he said can barely live on pension incomes that in some cases amount to $800 a month, without the cost of living adjustments that were suspended in pension reform.
“It sickens me and I’m sure it sickens them,” Downey said.
Campaign Donor
During the same weeks that Raimondo’s firm was investing in Envista and her husband’s staff at the Providence Water Supply Board was extending Envista’s contract with the WSB, the company’s President Mark Prestipino was writing a check to the Raimondo for Treasurer campaign. On October 25, just a week before Raimondo’s election, the Raimondo campaign donated a Prestipino check of $250. Prestipino then gave again to Raimondo -- $500 -- in September 2013.
Prestipino is still listed on a website for Envista, whose contact number refers callers to Accela Right of Way Management, where Prestipino is not listed. Prestipino is also listed with Borealis Ventures, but does not appear to be with the company any longer.
Since these events, Accela purchased Envista (according to a company press release issued June 24, 2014) and Point Judith Capital -- Rhode Island's only venture capital fund moved to Boston just one year after Raimondo was sworn in as General Treasurer.
More than a half dozen requests were made to the Raimondo campaign to answer questions and to provide Moffit for an interview.
Related Slideshow: Rhode Island’s History of Political Corruption
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