Connecticut entered autumn on pace for its best stretch of new startup formation on record, amid a larger boom for entrepreneurship in the United States after the COVID-19 pandemic prompted many people and backers to take on the risk of launching a new business.

Between January 2021 and last month, nearly 23,600 people filed notice with the Internal Revenue Service of their intent to start up new companies in Connecticut with the intent of adding payroll, according to the U.S. Census Bureau's most recent analysis published Thursday of IRS filings that capture the information.

That was roughly 5,650 more filings from the same stretch in 2018 and 2019, for a 31 percent increase. Among Northeast states, Connecticut trailed only Vermont's 40 percent gain in new startup formation from the period prior to the pandemic.

Despite the gain, Connecticut continues to trail New York, New Jersey and Massachusetts for new startups as a ratio of its population. The Census data includes both solo entrepreneurs as well as corporations spinning off new entities that plan to hire. 

August was the lone month to date this year when new business filings nationally eclipsed their 2021 totals. In addition to a booming job market that has pushed up pay for new hires — and raises, convincing some would-be entrepreneurs to keep their day jobs — the Federal Reserve has ratcheted up interest rates, making loans more expensive to underwrite startup expenses. 

Gov. Ned Lamont assessed Connecticut's progress last week on the "Forward Obsessed" podcast, including lending programs that allow qualifying entrepreneurs to pare down the cost of a startup loan.

"We put together something called the Boost Fund — it's $75 million, so you can get a very low-interest loan," Lamont said. "Give people a little bit of investment capital, a little scratch. ... We're their 'friends and family' round."

Lamont also emphasized the ongoing investments by Connecticut Innovations, the state-backed venture fund that makes equity investments in startups with the potential for jobs growth, along with seed grants and other financial assistance. And the state has attempted to further streamline the process for starting a company through a "new business checklist tool" via the Connecticut Department of Economic & Community Development.

But neighboring states are making their own pushes, including Massachusetts which like Connecticut has a venture fund that focuses on Bay State-based companies, in addition to its burgeoning private-sector VCs that have offices there to scout startups with the potential for rapid growth.

And New York offers an "entrepreneurship navigator" service requiring only an email detailing the basics of a business idea to trigger a one-on-one counseling session from Empire State Development. 

In the run-up to the November election, Lamont's Republican challenger Bob Stefanowski has criticized Lamont for doing too little to cut the cost of doing business in Connecticut, and to play up the state's regional advantages compared to many others nationally. And independent candidate Rob Hotaling has pledged to increase the investment capacity of Connecticut Innovations with the goal of grooming more high-growth startups.

"If someone were to tell you, 'I got a city that's midway between New York and Boston next to one of the best universities in the entire world with a deep-water port' — you think you could make something out of that?" Stefanowski said at a recent candidate forum hosted by Quinnipiac University. "Of course you could."

While Connecticut has had individual companies record big venture capital totals, to include Enko Chem in Mystic which has amassed $140 million to date, it seen relatively few companies hold initial public offerings of stock since the start of the pandemic compared to Massachusetts and New Yor. A Westport startup called Intensity Therapeutics is slated to go public next week via an IPO, to raise cash as it develops a new class of drugs to battle cancer.

Connecticut continues to draw families across the New York border into Stamford, Norwalk and other nearby towns, giving it the potential for additional entrepreneurs even as it works to convince graduates to stay rather than move elsewhere due to those same high costs of living. On the "Forward Obsessed" podcast, Lamont prodded would-be entrepreneurs to consider getting off the fence.

"When it comes to Connecticut, I think we're getting it back," Lamont said. "Take advantage of your skills while you've got the wind at your back."