Matching Grants: What Does Your State Have?


By: Ken Kousky, BlueWater Angels and Krista Tuomi, American University

A number of public policy activities and initiatives that occur in American states are just as important to angel investors as federal-level issues.  The key state issues include tax credits for angel investments, matching co-investments by the state, grants and incentives to angel networks and even state-run venture and angel funds.  Knowing what works remains a critical challenge at both the state and national level requiring that we organize and support our interests in both arenas.

Our last blog post analyzed some international matching grants, highlighting in particular the well-designed New Zealand and Israeli programs. This blog examines four types of public offerings in the US. 

The first: state VC funds that co invest with other investors. Many of these are fund of funds, are managed by third parties (e.g. Florida) and target seed projects (e.g. Delaware). Others match VC investment in set rations (e.g. Louisiana, Kansas and Michigan).  Some have a record of successful co-investment with angels (e.g. Connecticut and North Carolina). Pennsylvania actually requires this, lending an amount that must be matched 4X by VCs or angels.

The second: allocated funds from the State Small Business Credit Initiative (SSBCI), a federal program that provided states with $1.5 billion to strengthen their programs that support lending to small businesses. Some states used the funds to bolster current VC capacity while other created new programs targeting seed investment and/ or incubator support.  Some states like Arkansas earmark funding purely for co-investment with angels.

The third: small business accelerator type grants. Some of these grants specify a private capital match (e.g. Arizona, Nebraska and Louisiana) while others show preference for firms referred by VC and angel groups (Colorado). Oklahoma is interesting in that it has a dedicated Angel Sidecar Fund.

The fourth: additional state assistance for SBIR-STTR awardees, which had received federal grants for specific product development and commercialization. Georgia and Minnesota merely provide advice and administrative support. The others match the award in various ratios ranging from 50% (Hawaii) to 300% (Wisconsin). Ohio provides grants of up to $350,000 to SBIR and STTR winners to commercialize their technology.  

How does your state match up?

State VC fund

Funds from SSBCI

Small Business Grants

SBIR-STTR Assistance

Alaska

Arkansas (fund of funds (fof)

Connecticut

Delaware

Florida

Hawaii (fof)

Illinois

Indiana

Kansas

Louisiana

Maine

Michigan

Minnesota

Missouri

New Hampshire

NJ (fof)

NY (fof)

NC (fof)

Ohio (fof)

Oklohoma (fof)

Pennsylvania

Rhode Island

Tennessee

Washington

West Virginia

Wisconsin (fof)

Arizona

Arkansas

Florida

Hawaii

Illinois

Indiana

Iowa

Kansas

Louisiana

Maine

Maryland

Michigan

Minnesota

Missouri

Nebraska

New Hampshire

New Jersey

New York

North Carolina

Ohio

Oklahoma

Pennsylvania

Rhode Island

Tennessee

Texas

Washington

West Virginia

Wisconsin

Arizona

Colorado

Iowa

Kentucky

Louisiana

Maine

Maryland

Michigan

Missouri

Nebraska

New Jersey

Oklahoma

Pennsylvania

Texas

Utah

Delaware

Georgia

Hawaii

Kentucky

Michigan

Minnesota

Montana

Nebraska

Ohio

Oklahoma

Wisconsin

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