Hiya folks, Lev here. 

In late July I got a tip that something wasn’t right with the Business Innovation Act (again). 

New contracts were delayed – which meant awardees couldn’t get the grants they had planned for. Startups often burn cash to build products and revenue, and an unexpected loss of funding can be debilitating. 

“If I hadn’t been as tenured of an entrepreneur as I am or had a team willing to take the pay cut, my business probably would have died,” said Joe Toscano, the CEO of Service Stories, whose BIA contract went MIA. 

The good news is that, as far as I can tell, only new BIA contracts were held up, and those finally started rolling out on Sept. 17. This is also nothing like the pause/potential shut down that the BIA survived last year.

The bad news is the delay raises questions about BIA funding for this fiscal year, namely, where it’s coming from and how much there is. In the spring, lawmakers changed the BIA’s funding stream and cut the $11 million in general funds originally intended for the program. 

The new funding needs time to get organized. So to avoid a BIA gap year, lawmakers intended to give DED some interim money for the program. 

But DED said they didn’t get that money. So to pay for the BIA, the Department of Labor advanced $8 million to DED with a commitment of up to $15 million. That’s enough to cover all BIA reimbursements this year, DED said. 

But for the moment, that means BIA funding went from $11 million to zero to $8 million this year – and it’s not clear why. 

My sense from talking with Nebraska startup folks is that the lack of clarity from the state, and more unexpected BIA hangups, are not inspiring a lot of confidence. 

“It’s shocking to me that they do this,” Toscano said. “We are supposed to be a conservative state, and conservative – by all means that I know – is to protect and build stability.” 

Read the full story on SPN.