Nebraska’s startup ecosystem continues to expand, thanks in part to state-backed programs aimed at fostering innovative ideas. A newly released 2024 Business Innovation Act (BIA) Impact Analysis reveals that, among the five major BIA initiatives, the Prototype Grant is notable for transforming early-stage concepts into market-ready ventures. Consequently, BIA-supported companies are generating over $1.17 billion in annual economic output and creating thousands of new jobs throughout the state.

The Business Innovation Act BIA was passed in 2011 as part of the Nebraska Talent and Innovation Initiative. It features five primary programs to help entrepreneurs refine their products, attract private investment and grow their businesses within the state. Those programs include the Nebraska Innovation Fund Prototype Grant, Small Business Innovation Research (SBIR)/Small Business Tech Transfer (STTR) Matching Grants, Nebraska Academic Research and Development Grants, the Nebraska Seed Investment Program and the Microenterprise Assistance Program.

BIA-supported companies are generating over $1.17 billion in annual economic output and creating thousands of new jobs throughout the state.

Since the BIA’s inception, these initiatives have collectively awarded $56.8 million. The requirement for matching funds has attracted an additional $191.9 million in capital at the time of the awards. Funding recipients range from high-tech software companies to bioscience startups, demonstrating the Act’s broad reach and importance in supporting innovation across Nebraska’s diverse industries.

Main findings

The University of Nebraska–Lincoln’s Bureau of Business Research report reveals a high return on state investment through robust follow-on capital and revenue generation. It shows that BIA-backed companies have collectively raised $654.1 million in follow-on capital, which equals $11.52 for every $1 of state funding. In addition, these businesses have generated $15.90 in revenue for every $1 of BIA support.

Job growth has been another mark of success. Since initially receiving BIA funding, supported businesses have created 2,386 direct jobs, commanding a total annual payroll of $182.5 million. These new positions offer an average salary of around $76,498.

BIA-backed companies have collectively raised $654.1 million in follow-on capital, which equals $11.52 for every $1 of state funding. These businesses have generated $15.90 in revenue for every $1 of BIA support.

Beyond direct employment, the study estimates a broader effect through indirect and induced economic activities. The annual economic output linked to BIA-supported companies stands at $1.17 billion, supporting nearly 5,000 jobs when multiplier effects are considered. This economic activity generates $27 million in state and local tax revenue each year.

Since initially receiving BIA funding, supported businesses have created 2,386 direct jobs, commanding a total annual payroll of $182.5 million. These new positions offer an average salary of around $76,498.

The BIA’s impact spans multiple industries, including agriculture, manufacturing and software as a service (SaaS). However, the data points to strong returns in the bioscience and software sectors, demonstrating high ratios of follow-on capital raised relative to initial state investment. The report also promotes the program’s long-term growth potential, noting that many BIA-supported ventures are still in early development and likely to continue expanding their revenue and workforce in the coming years.

BIA Nebraska Innovation Fund Prototype Grant

While the BIA encompasses multiple initiatives, the Nebraska Innovation Fund Prototype Grant has emerged as pivotal in supporting proof-of-concept and early-stage product development, according to the report. The grant program can offer up to $150,000 to support proof-of-concept activities for individuals and businesses operating in Nebraska. The grant must be matched with private capital equal to at least 50% of the award, reduced to 25% for value-added agriculture projects, and matching funds must come from non-state sources. 

The Nebraska Innovation Fund Prototype Grant has emerged as pivotal in supporting proof-of-concept and early-stage product development.

Because these awards are provided through reimbursement, recipients must meet key milestones and demonstrate progress in developing their new technology or product. By leveraging early-stage funding, Prototype Grant recipients are positioned to refine their offerings, attract further private investment and eventually transition into full commercialization.

According to the report, businesses often develop a new product or service with Prototype Grant assistance before moving on to later stages of development and commercialization. They sometimes utilize additional Nebraska BIA programs, such as the Seed Fund/Commercialization or Academic Research and Development grants. 

The Prototype Grant has provided $19.0 million — approximately 33% of all BIA funds awarded — with 312 awards given to different companies.

Past recipients of Prototype Grant funding

The rest of BIA’s initiatives have received 95 Commercialization/Seed Fund awards, totaling $21.9 million. Meanwhile, 91 awards totaling $10.5 million have been allocated through the Academic Research and Development Phase 1 and Phase 2 programs.

The Prototype Grant has provided $19.0 million — approximately 33% of all BIA funds awarded — with 312 awards given to different companies.

Although prototype grants have garnered significant interest, the BIA’s other programs provide complementary support at different stages of company growth. The SBIR/STTR Matching Grants Program gives extra momentum to small businesses already receiving federal research funds, while the Academic Research and Development Grants foster collaboration between local industry and research institutions. The Seed Investment Program offers further resources for ventures preparing for commercialization and the Microenterprise Assistance Program delivers loans and training to smaller-scale entrepreneurs, particularly in rural communities.

You can read the full report here.