SSTI Digest

Last month, Minnesota Gov. Mark Dayton signed the MNVest bill – an intrastate securities exemption that allows Minnesota-based companies and entrepreneurs to raise money through equity crowdfunding. To qualify for the exemption, businesses must show evidence of several requirements including being organized under state laws and that its principal office is located in Minnesota. Companies can raise capital from both accredited and non-accredited investors from across the state. In any 12-month period, a company cannot raise more than: Up to $2 million if the business provides prospective purchasers with audited or reviewed financial statements; and, Up to $1 million if the financial statements are not audited or reviewed. The exemption allows accredited investors to invest an unlimited amount (up to the maximum investment of $2 million) in companies using the state rules. However, non-accredited investors are capped at $10,000 per transaction. To facilitate investments and protect consumers from fraud, the offering must be conducted exclusively through an authorized MNvest portal – an authorized broker-dealer registered by the State of Minnesota as a…

In FY13, federal agencies obligated $29 billion to 995 academic institutions for science and engineering (S&E) activities, according to a recent National Science Foundation (NSF) InfoBrief. The FY13 federal obligation represented a 6 percent decrease in current dollars from the $31 billion that federal agencies obligated to 1,073 academic institutions in FY12 – the third year in a row of declining S&E funding to academic institutions. In FY13, research and development (R&D) obligation accounted for 89 percent of total academic S&E obligations annually from FY 2011-13. Other S&E categories supported by federal agencies include R&D plant; facilities and equipment for instruction in S&E; fellowships, traineeships, and training grants; general support for S&E; and, other S&E activities. Collectively, the Department of Health and Human Services (HHS), NSF, and the Department of Defense (DOD) provided 87% of all federally funded academic S&E obligations in FY13. Almost 40 percent of FY13 federal obligations were awarded to 20 universities – 19 of those were also ranked among the top 20 in FY12. The InfoBrief also reports…

On Wednesday, the U.S. Department of Commerce announced the designation of 12 new communities as part of the Investing in Manufacturing Communities Partnership (IMCP) initiative. This second round of manufacturing communities was selected by an interagency panel to receive targeted support from 11 different federal agencies and programs. The IMCP initiative is intended to accelerate U.S. manufacturing by investing in partnerships and long-term economic development strategies in key regions. More than $1 billion in federal assistance will be available to the 12 designated communities. IMCP is designed to foster regional partnerships around particular manufacturing sectors in which the regions have a competitive advantage. In order to apply, these partnerships must have a strategic plan that addresses workforce and supply chain challenges, infrastructure, research and innovation, capital access, and operational improvement for manufacturing companies. The first twelve manufacturing communities were named last May, and received a dedicated federal liaison at each of the participating agencies to help them navigate federal resources. The second round of designees…

SYNEVA Economics – a consulting firm focused on local and regional economic analysis – released a free-to-use, web-based tool that allows users to examine monthly change in employment for the United States’ largest metros from January 2008 to May 2015. Using U.S. Bureau of Labor Statistics data, the Metro Employment Index interactive dashboard includes a mapping function that allows users to examine monthly employment data for all 387 metros. The tool also allows users to view a single metro monthly employment data for the 77 months of available data. As of May 2015, the number of metros adding jobs dropped to 319 – approximately 82 percent of all U.S. metros. These finding marked the fifth consecutive month with fewer metros showing job growth. The 63 states that reported job loss was the highest since March 2014. Use the dashboard…

Biotech is in the midst of an investment boom, at least in Silicon Valley. In the first quarter of this year, biotech firms in the region raised $574 million, the third highest quarter on record, according to data from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) and reporting by the San Jose Mercury News. This peak represents a 103 percent increase over the same quarter the previous year. Nationwide, the sector is poised to attract a record-setting $7 billion this year, according to Bloomberg Business. However, Silicon Valley's biotech boom is less apparent in other parts of the country. U.S. biotech investment has generally tracked upward since the collapse that accompanied the 2008 recession. The recovery, however, brought a restructuring of the industry. Over the last seven years, the number of biotech deals secured has declined, while those that have received funding have gotten larger infusions of cash. In 2008, before the full effects of the crash were felt, 549 companies received a total of $5.2 billion, according to PwC/NVCA data. The following year, 2009, was the nadir of the recession for venture capital, dropping…

In recent years, academic researchers have focused on trying to identify the characteristics that could make someone a potentially successful founder of a startup. However, there has been limited research on the characteristic of the individuals who join these founders as early employees to help them develop and commercialize innovative new products and services. These “joiners” are skilled laborers who want to work for tech startups, but don’t want to be founders – mostly because they are less interested in management and more interested in technical roles. Two studies have been released that look at the characteristics of joiners and the role they play in a startup’s success. In a recent study by Michael Roach of Cornell University and Henry Sauremann of the Georgia Institute of Technology, the authors examine the personal characteristics and preferences of Ph.D. candidates in STEM fields to understand the differences between potential entrepreneurs, those likely to join a startup, and those unlikely to join a startup. Personality characteristics and preferences examined include acceptance of risk, desire for autonomy, interest in…

Last week, New Mexico Gov. Susana Martinez signed House Bill 2 into law, new tax incentive legislation that, according to the governor, expands the state’s economic development toolkit. The bill received bipartisan support, in the GOP-controlled House, where it passed 60-2, and the majority-Democrat Senate, where it was approved 31-11. According to the Martinez administration, the package is expected to cost between $6.5 million and $11.5 million per year. The bill expands six incentives already established, while two new tax breaks are created. Most notable for New Mexico’s TBED community are the New Mexico Angel Tax Credit and the Technology Jobs and Research and Development Tax Credit Act. The expanded New Mexico Angel Tax Credit makes $2 million in total tax credits per year available to all investors (up from $750,000), while increasing the total amount each individual investor can make to $62,500 per year (up from $25,000). The update also increases the number of credits individual investors can claim to five per year (from two) and the time the credit can be carried forward to five years (from three). The legislation also combines two existing…

The Growth Dashboard, an annual report released by the Enterprise Research Centre, a policy advisory group with researchers from five United Kingdom business schools, and the government’s Business Growth Service, serves as a source of evidence to inform discussions on the country’s business support priorities. Presenting a set of growth metrics for startups and existing firms across a range of sub-national geographies in the UK, the metrics used in the annually updated dashboard are:  Proportion of fast-growing firms in the business population (2011-2014); Net job creation ratios for 2013-2014; Three-year survival rates of startups (2011-2014); Proportion of surviving startups that reach £1m turnover (2011- 2014); and, Proportion of existing £1-2M ($1.57-3.15M USD) turnover businesses THAT grow to £3m ($4.72M USD) turnover (2011-2014). London, conventionally seen as the UK’s innovative anchor, places in the top three on four of the five indicators used in the dashboard. While London leads in factors such as startup rate, measured by employer startups per 10,000 populations, it ranks near the bottom for three-year survival rates…

Over the past few months, SSTI has followed proposals issued by governors in their budget requests, State of the State Addresses, Inaugural Speeches and other events. Now that many governors have signed spending bills, the SSTI Digest will check on the status of these proposals, and examine the state of technology-based economic development funding in the states. This week, we review actions in Florida and Rhode Island. FloridaGov. Rick Scott signed a $78.7 billion FY16 budget (SB 2502-A) on Tuesday, vetoing $461 million in spending. The lengthy list of vetoed funding for projects includes: $23.1 million for the State Economic Enhancement and Development Trust Fund; $15 million for a downtown Orlando expansion of the University of Florida through a partnership with the Florida High-Tech Corridor Council; $10 million for equipment for the International Consortium for Advanced Manufacturing Research; $9.25 million for biomedical research at the Sanford-Burnham Medical Research Institute, the Torry Pines Institute for Molecular Studies, the Roskamp Institute for Oncology Drug Development, the Scripps Research Institute and the Vaccine and Gene Therapy Institute;…

During a Clean Energy Investment Summit, the White House announced a $4 billion commitment by major foundations, institutional investors, and others to fund innovative solutions to help fight climate change, including technologies with breakthrough potential to reduce carbon pollution. The commitment of $4 billion doubled the initial $2 billion goal set at the launch of the administration’s Clean Energy Investment Initiative last February. In addition to the $4 billion investment, the president announced an executive action that would launch a Clean Energy Impact Investment Center at the U.S. Department of Energy (DOE) to act as single point of access for information about energy and climate programs at DOE and other government agencies to spur investments by mission-driven investors in federally supported clean technologies. The Clean Energy Impact Investment Center also will provide information to potential entrepreneurs, clean tech companies, investors, and the general public about federal clean energy programs including funding sources, technical assistance, new research and analysis, and other federal programs. The White House also announced that it will…

Over the past few months, SSTI has followed proposals issued by governors in their budget requests, State of the State Addresses, Inaugural Speeches and other events. Now that many governors have signed spending bills, the SSTI Digest will check on the status of these proposals, and examine the state of technology-based economic development funding in the states. This week, we review actions in Kansas, Michigan and Minnesota. KansasGov. Sam Brownback signed House Substitute for SB 112, a $15 billion budget for fiscal year 2016. Under the approved budget, a total of $2.7 million is appropriated for the Department of Commerce's Innovation Growth Program, and $358,568 will be available for Technology Innovation and Internship Grants. Note that SB 112 includes allocations for both fiscal years 2016 and 2017, though legislators will meet again next year to set actual FY17 levels. The figures listed above are evenly split between FY16 and FY17 to match releases from state officials. Earlier in the session, the state legislature considered dismantling the Kansas Bioscience Authority. SB 305 would have terminated the program, reallocating its funding and…

State government tax revenues increased by 2.2 percent in FY14, according to the U.S. Census Bureau's 2014 Annual Survey of State Government Tax Collections. The uptick marks the fourth consecutive year of modest revenue growth. Data from the National Association of State Budget Officers' (NASBO) Fiscal Survey of States: Spring 2015 corroborates this trend, indicating increases in state revenues and proposed spending. NASBO found that 42 executive state budgets proposed spending increases for FY16. The Census Bureau found that general sales and gross receipt taxes drove most of the FY14 state revenue growth. Additional increases came from corporate income tax, severance taxes and motor fuel taxes. At the same time, revenues from amusement and alcoholic beverage licenses were down by 22.1 percent and 12.4 percent, respectively. North Dakota led the nation in growing its proportional revenues, with an increase of 15.5 percent between fiscal years 2013 and 2014. The largest dollar increases in revenue came in the largest state economies: California, Texas and, especially, Texas. Texas posted the nation's third largest proportional increase (6.7 percent)…