The Iowa Economic Development Authority (“IEDA”) announced that five companies had
received demonstration funds from IEDA last week
The five companies funded by the IEDA are:
Home Painter received a proof of concept loan of $25,000,
Lender Close received a Propel Loan of $250,000 from the Iowa Acceleration Fund,
MakuSafe received a demonstration fund loan of $100,000,
Rantizo received a $100,000 loan from the demonstration fund, and
Trigger Interactive received a proof of concept loan of $25,000
These three programs are part of IEDA’s strategy to help start-up companies overcome the gaps associated with early-stage financing in the Silicon Prairie.
The Proof of Commercial Relevance Program
The Proof of Commercial Relevance Program (POCR) was created by the IEDA to help startup companies establish that there is a market for their new technology companies. The program offers a 1:2 (private:public) match for outside funding. The program specifically helps the actual prototype or beta testing of the technology and to establish its position in the competitive landscape. As the name suggests the goal is to establish that the new technology is commercially relevant. The program requires that there are two actively engaged people (co-founders) in the effort. The next application deadline is September 9, 2019.
For more information, check out the link below: https://www.iowaeconomicdevelopment.com/POCR
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The Demonstration Fund Program
The demonstration fund program awards up to $125,000 to Iowa based companies with less than 500 employees. The fund matches 1:2 private investment and can come in the form of a loan or a royalty arrangement. The money may be used for a variety of company efforts – including market development, hiring key marketing personnel, and other marketing and sales-related functions. The program requires that the potential company submit an application. [The next cycle is due on September 9, 2019]. Applicants must have a novel, protectable technology that is in the advanced manufacturing, bioscience, or information technology industries.
For more information, check this IEDA link out: https://www.iowaeconomicdevelopment.com/Demo
The Propel Program
As many entrepreneurs know, as companies expand hiring key personnel is particularly challenging, so both the Propel and Innovation Acceleration program helps fill in the gaps of startup teams. The Propel program is the first step where a company can receive up to $300,000 in a 1:1 match from IEDA. In addition to hiring key personnel, Propel can be used to further IP evaluation and protection. Those funds are delivered as low-interest loans or a royalty arrangement. According to the IEDA website, these loans are typically around 3% annual with a deferment period of twelve months before the first payment is due. Like the other two programs above, the program is built around a bi-monthly (every two months) decision cycle. The next applications are due on September 9, 2019, and decisions are communicated in mid-November.
IEDA’s website has more information at this link: https://www.iowaeconomicdevelopment.com/SSBCIInnovation
Innovation Acceleration Expansion
The Innovation Acceleration Expansion program is used by companies to also help recruit key personnel. It is similar to the Propel program, but allows companies to receive $500,000 on a 1:1 basis. In addition to key personnel, the Innovation Acceleration program can be used to facilitate construction. The timing and rules are similar to the above programs. In fact, the information section on the IEDA website is actually on the same page as Propel (see above link).
The intent of all of these programs is to facilitate new company creation around the state. And funding in this round included four different communities. To ensure proper facilitation of the program IEDA has hired Venture Net to manage the program. And Venture Net put together a good graphic (see below) that is also available on IEDA’s website.
If you are thinking about applying to the Iowa programs, good luck. If you are not in Iowa but interested in what your state might have that is similar, please consider communicating with us via Twitter @siliconprairienews so that we can do some research on your behalf.
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