The Show Me State will get nearly $100 million from the State Small Business Credit Initiative that Congress reauthorized and expanded in their $1.9 trillion COVID-19 relief package, known as the American Rescue Plan Act.
Missouri was approved for up to $94.8 to operate a venture capital program, IDEA Fund, managed by the Missouri Technology Corp. The MTC is a public-private partnership created to promote entrepreneurship and foster the growth of new and emerging high-tech companies. MTC’s vision is to transform Missouri through the power of entrepreneurship by serving as a catalyst for technology-based innovation.
“The Missouri Technology Corporation provides vital support for companies that go on to benefit our entire state,” said Governor Mike Parson. “SSBCI will enhance these efforts to invest in the leading tech companies of tomorrow.”
According to the Missouri Department of Economic Development, SSBCI provides funding for credit and investment programs for small businesses and startups. Eligible SSBCI programs are limited to Venture Capital, Loan Participation, Loan Guarantee, Collateral Support, and Capital Access. SSBCI is the only ARPA-funded program that can be used for state-sponsored venture capital activities. Previously, only venture capital programs have been able to achieve the expected 10:1 leveraged capital ratio requirement of the program. It is expected that for every dollar of federal funding invested, at least 10 dollars of private capital investment will be generated.
The IDEA Fund is a state-sponsored venture capital program that invests in Missouri’s most promising emerging companies to promote growth and encourage additional future investment. The program requires matching private funds to ensure investments are made in companies with the highest growth potential. In 2021, MTC received $24 million through SSBCI which was invested in 80 Missouri-based companies. These companies have raised more than $760M in additional private capital and created more than 500 new jobs.
Nearly $40 million of Missouri’s $95 million allocation is required to support socially and economically disadvantaged (SEDI) businesses. In partnership with the Department of Economic Development, MTC has published three requests for proposals to identify partners to launch SSBCI-funded programs supporting SEDI businesses. MTC expects to begin accepting applications for the IDEA Fund Co-Investment Program in October and make investment allocations in early 2023. Details for interested companies are available on MTC’s website, missouritechnology.com.