TechStart Technology Grants
Federal Grant Proposal Support
In addition to investment funds, the TechStart program provides funding and assistance to Central Ohio companies seeking to access grants related to Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR) and other federal small-business development funding areas.
TechGenesis Fund
TechGenesis is a technology grant fund to transition early-stage, research-driven technologies from the concept stage into true commercialization activities. Technology funding is available to researchers, inventors, and entrepreneurs.
TechColumbus Pre-Seed Fund
The TechColumbus Pre-Seed Fund enables promising technology startups to complete the steps necessary to attract follow-on funding from venture capital firms and other sources. The process focuses on incubating Central Ohio technology startups that have the reasonable expectation of reaching $30 million in revenue in three to seven years and address a market of at least $100 million.
The Co-Investment Fund
The purpose of the $2.5 million Co-Investment fund is to bring more local investment dollars into selected OTAF II or the Pre-Seed Fund deals, amplifying the value of the pressed or angel investment round and expanding opportunities for regional tech-based economic development.
Ohio TechAngel Funds (OTAF)
The Ohio TechAngel Funds are contributed capital and “sidecar” angel funds targeted to qualified entrepreneurs with late incubating and demonstrating phase technology companies. OTAF is the third largest angel fund in the country.
Technology Funding Sources
Venture Capital
This is a fundraising technique for companies who are willing to exchange equity for capital to grow or expand the business. Venture capital firms typically invest in the market entry stage or later. Venture firms typically invest in the market entry stage or later. Venture firms seek opportunities with the strong likelihood of a high return on investment within five years or less. Some examples of Venture Capital funds in Central Ohio include: Reservoir Venture Partners, NCT Ventures, Adena Ventures, CID Capital, and Fletcher-Spaght.
M&A or IPO
Mergers, acquisitions and initial public offerings (IPOs) are typical for founders, early investors, and other stakeholders to “cash out” or receive returns from capital they committed in growing a company to this stage. Mergers typically take place with a strategic partner where the value of accessing each other’s customers and synergy of combining operations provides an opportunity for growth beyond what the companies would be capable of individually. Acquisitions usually involve the purchase of a smaller company by a larger firm. An IPO is the first sale of stock by a private company to the public. IPOs are often issued by small, young companies seeking capital to expand, but may also involve large privatelyowned companies looking to become publicly traded.
State and Federal Funding Sources
Research Grants
There are numerous research grants available from state and federal sources that include, basic discovery, translational research, technology validation and development. Many of these federal grants can be accessed from www.grants.gov and many of the Ohio research and commercialization grants can be found at www.thirdfrontier.com.
Ohio Technology Investment Tax Credit
The state’s Ohio Technology Investment Tax Credit enables Ohio taxpayers who invest in small, research and development and technology-oriented Ohio-based firms to reduce their state taxes by 25% of the amount invested in qualified tech companies. Since 1996, over 340 companies have been approved and private investment is at $82 million. The company and the investor must be approved before the investment is made and the company cannot currently have more than $2.5 million in revenues or net book value. Eligible companies may receive up to $1.5 million in investments from approved investors and Ohio must be their principle place of business.
Small Business Innovation Research (SBIR I and II)
At over $93 million, Ohio ranked 7th in the nation in 2005 for funds received through the federal SBIR program. These grants provide federal funding to small, high technology businesses to perform research and development projects that meet federal agency mission needs. Grants issued in the first phase are approximately $100,000 and then $750,000 in the second phase.
Ohio Research Commercialization Grant Program
Technologies previously validated by the Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR) and Advanced Technology Program (ATP) are eligible for up to $350,000 in technology grant funding to increase the capacity of small technology companies to realize the commercial potential of research projects. In FY 2007, nearly one-third of all ORCGP grants were awarded to Central Ohio companies.
Innovation Ohio Loan Fund
The Innovation Ohio Loan Fund assists Ohio companies having difficulty securing funds from conventional sources due to technical and commercial risk factors in developing new products. The program provides competitive financing terms on loans to finance the acquisition, construction, and related costs of technology, facilities, and equipment. Typical loans are between $500,000 and $3 million. Nearly half the loans to date were to Central Ohio companies.
The Ohio Capital Fund
The Ohio Capital Fund is designed to increase the amount of private investment capital for Ohio companies in the seed or early stage of business development by creating a “fund of funds” portfolio of seed and early stage capital investments. The fund is currently at $150 million from private sources for investment and to date more than $50 million in capital has been committed to six Ohio funds and three national funds.
The Program is overseen by the Ohio Venture Capital Authority (OVCA) and is managed by Buckeye Venture Partners, LLC.
Ohio Midwest Fund
The Ohio Public Employees Retirement System ("OPERS") and Credit Suisse created the Ohio-Midwest Fund to encourage the growth of small businesses within the state of Ohio and the surrounding Midwest region. This fund of funds will be capitalized by OPERS to commit capital to private equity and venture capital funds that will in turn invest in companies. Credit Suisse's Customized Fund Investment Group will manage this Fund on a discretionary basis.
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