Missouri Innovation Fund Brings Potential Funding Opportunities for Startups
It’s no secret that funding is one of the most common challenges among local startup companies. After last year’s Missouri Technology Corporation (MTC) funding cuts, relief may be in sight with a new financial support option being proposed. The Missouri Innovation Fund is a state-operated venture capital fund framework recommended by Governor Greitens’ Innovation Task Force under Senate Bill 1037.
What’s different about the Missouri Innovation Fund?
The Missouri Innovation Fund is designed to attract private investors instead of relying on the state’s budget. Money would flow through the MTC and be managed by private fund managers. This would allow investment dollars to be committed for a longer time period without being subject to legislative appropriations. Private fund managers could also respond to deals faster, allowing money to flow into the startup community quicker. With a private investor model, some say a large, profit-driven fund could favor later-stage startups over seed funding new companies.
How have startups been affected by the MTC budget cuts?
Since 2011, the MTC has raised state funding for startups by typically matching outside investments up to $2.5 million. In 2017, Governor Greitens’ task force cut MTC’s budget from $18.3 million to $3.5 million while the Missouri Innovation Fund concept and details were being worked out. This resulted in MTC investing only $2.3 million in 13 startups during the fiscal year, down from $10 million for 42 deals. While local startups have been forced to play a waiting game for funding, the Missouri Innovation Fund aims to provide a much-needed solution.
Would my startup qualify for the potential funding?
The current bill sets the following qualifications for eligible startup companies:
- Employ at least 51% of employees in Missouri
- Have fewer than 100 employees
- Have operated in Missouri for less than 10 years
- Agree to not relocate out-of-state for three years after receiving investment from the fund
What are your thoughts on the Missouri Innovation Fund? We’d love to hear from you, so please contact the Anders Startup Team to discuss further.