A Hand Up: State Grant Programs Offer Fuel for Early-Stage Companies
It’s no secret Utah is an excellent place to call home for entrepreneurs and small business owners. The state consistently receives high marks for its business-friendly environment and expansive ecosystem that helps visionaries take their product from invention through development.
Utah is also known for its programs that support technology entrepreneurs and innovators in their quest to develop state-of-art products. Here’s a look at some of these competitive, state-sponsored grant programs:
USTAR Talent Acceleration Program
TAP is designed for startup and early stage companies that are seeking funding for technology development. Proposed work can include research and development, proof of concept, prototype development and product validation.
For 2018, TAP will focus on five technology sectors including aerospace, automation and robotics, big data and cyber systems, energy and clean technology, and life sciences.
“By providing early stage risk capital, we are seeing an increase in the number of companies able to attract private investment from outside the state and create jobs by accelerating their technology development in Utah,” says Ivy Estabrooke, executive director of USTAR.
According to Estabrooke, USTAR and its governing board consider several factors when selecting and approving awardees. “We consider if there is enough of an ecosystem in the state and if they will have a supply chain to produce their products. We also consider their ability to raise capital or form strategic partnership and if they have the ability to grow from an early stage company into a mature company without leaving the state of Utah,” she says.
USTAR offers TAP awardees a variety of services such as educational training and mentoring services. According to Estabrooke, once accepted, the companies are assigned a program manager who works with them to make sure they meet technology milestones and determines other resources they may need to be successful in the program.
USTAR works closely with the Governor’s Office of Economic Development (GOED) to ensure all gaps are covered in the technology startup market without being duplicative. TAP is designed for early stage technology development. As companies mature out of the TAP program, they can qualify for TCIP (see below).
GOED Technology Commercialization and Innovation Program
The TCIP program ensures new technologies within Utah are being developed and commercialized with the end goal of creating jobs. “TCIP plays an important role in the startup ecosystem, making sure newly developed technologies have access to capital. This non-dilutive funding helps companies hit important milestones as they bring their technologies to market, opening doors for additional growth and investment,” says Clark Cahoon, TCIP fund manager.
A change to the program in 2018 allows recipients to receive up to $200,000 per solicitation, up from $100,000 in 2017. A panel reviews the applications and awards various amounts totaling approximately $2.5 million.
Applicants are vetted by a volunteer panel of industry experts and then scored and ranked. The panel recommends awards based on technical merit, team experience, level of matching funds and potential for job creation. Highest-scoring applicants are then invited to give a 10-minute Shark Tank-style presentation, and the panel recommends the companies to receive grants.
To qualify for the grant, companies must be a small business or a university team that has generated no more than $500,000 in revenue from the proposed new technology. The team also cannot have raised more than $3 million in total prior funding from other sources.
GOED contracts with a local accelerator company to provide customized mentorship and training to grant recipients. “Oftentimes, companies find more value with the customized training and mentorship than with the money they receive,” says Cahoon.
GOED Rural Fast Track
RFT grants are available to smaller Utah-based companies that have been in business for at least two years. It offers an efficient way for small companies to receive incentives for creating high-paying jobs in rural Utah and further promote business and economic development.
“Rural Fast Track helps small businesses grow in rural Utah,” says Linda Gillmor, director of rural development at GOED. “These matching grants provide a launching pad for companies to expand their operations and hire new employees, while investing in the local community.”
Program requirements include having at least two full-time employees, entering into an incentive agreement with GOED that specifies performance milestones and demonstrating how the project will promote business and economic development in a rural Utah.
Companies can use grant monies to purchase necessary equipment, create new positions or reach other goals to grow their business.