The Hartford Courant's Mara Lee filed a more extensive story on the demise of Back9Network, revealed Monday. To paraphrase Eddie from America's Sweethearts, sometimes you look at a network and wonder, where did the money go?
Back9's state funding is part of the story, and just how little they paid back to Connecticut adds to questions about the supposed $40 million the network claimed to have raised.
Back9 said it has raised more than $40 million in startup capital. That includes more than $5 million from the state Department of Economic and Community Development. It first received a $100,000 grant and $250,000 loan from the Small Business Express program, and then received two more loans under the Manufacturers' Assistance Act program, a program that is open to far more than manufacturers. The first loan was in 2012 for $750,000, and the second loan was in 2013 for $4 million.
The company has not paid any interest back on the largest loan, because payments were deferred until 2017 and 2018. On the smaller loan, it pays $1,850 monthly.
Under the agreements for the loans, if the company defaults, the state can take all its equipment, bank accounts and accounts receivables.