New Innovate NY Fund to Grow Small Businesses, Create Jobs

June 21, 2011
The New York State Legislature has delivered a new initiative to the Governor, the Innovate NY Fund, which will give high-tech startups greater access to capital in an effort to help create and retain more jobs. The measure, which has passed both houses, also enhances the ability of small businesses in New York State to access loans through the State’s existing Capital Access Program.

“I am very pleased that this legislation is on its way to becoming law,” said Assemblyman Robin Schimminger, chairman of the Assembly Committee on Economic Development and lead sponsor of the bill. “The Innovate NY Fund will do exactly what New York State is in desperate need of – creating and retaining jobs in homegrown high-tech companies.”

Through the federal Small Business Jobs Act of 2010, New York is eligible to receive approximately $55.4 million to help increase credit availability for small businesses with no state matching funds required. The State will use the federal funding to reinvigorate the Capital Access Program and create the Innovate NY Fund. Innovate NY will provide funding to both regional and local economic development organizations, technology-based development entities, research universities and investment funds to make seed-stage investments in New York companies. It also requires the State’s Urban Development Corporation (also known as Empire State Development) to grant adequate geographic distribution of funds so that small businesses competing for financial assistance have a competitive chance at obtaining the funding.

“The Innovate NY Fund will invest approximately $25 million in seed-stage funding to New York State businesses,” said Schimminger, D-C-I-Kenmore. “Up until now, government-sponsored research helped support the invention of numerous ideas and products that could benefit society, but fell short of advancing the product beyond the inception stage. The creation of this new fund will increase the State’s ability to assist businesses launching new inventions get out of the inception stage and into the marketplace.”

This bill will take effect immediately after the Governor signs it into law.