When they consider economic development, state governments know high-tech is king--and they're putting up hard-earned taxpayer dollars to grow these industries. Indeed, according to Robert Heard, president of the National Association of State Venture Funds, about $784 million in state funds has been committed nationwide to encourage high-tech development.
Entrepreneurs seeking capital from a state-run venture fund are finding that while these programs operate like private funding organizations, subtle differences can work in their favor. "State venture funds are not going to be quite as driven to obtain a return on investment," says Dan Berglund, executive director of the State Science and Technology Institute (SSTI) in Columbus, Ohio, a national clearinghouse of state technology programs.
The following sample programs are helping high-tech entrepreneurs. To find a state-run or state-supported venture fund in your state, contact your state economic development agency.
Massachusetts Technology Development Corp. seeks start-up and early-stage firms that create innovative technology products or services. Early-stage funding up to $500,000 is available to firms unable to obtain sufficient capital from conventional sources. Investments are made as debt, equity or a combination of the two. For more information, contact the Massachusetts Technology Development Corp. at (617) 723-4920.
Connecticut Innovations, a private organization whose funding guidelines are governed by the state, teams small companies that have a product, process or innovative application with a university to apply for up to $200,000 in funding. The small business must be in one of several specified fields, such as biotechnology, computer applications or telecommunications. For more information, call (860) 563-5851.
Technology Transfer Inc. (TTI) gives entrepreneurs an average
investment of up to $100,000 to underwrite pre-production
activities, including patent protection, prototype development and
feasibility studies for technologically innovative products. If the
project succeeds, entrepreneurs must pay
2 to 3 percent of sales quarterly to TTI until a previously agreed-upon amount is reached. Repayment of the investment is not required if the product does not succeed. For more details, call (701) 328-5326.