Join us online at COVERGENCE OCT 22-23
The University Tech/Startup Gap Fund and Accelerator Summit
- 20 in-depth gap fund/accelerator program reviews
- Breakout and group discussions on common challenges
- Corporate and Investor partnering panels
- Networking web-site and associated materials
Gov. Eric Holcomb’s administration is working in the last days of the legislative session to restore $16 million that the Senate cut from appropriations for the 21 Fund, the state’s primary tool for promoting startups, entrepreneurship and research and development.
The Senate version of the two-year, $34.6 billion budget allocates $22 million in 2020 and again in 2021 for the fund, officially called the 21st Century Research and Technology Fund.
That’s $8 million per year less than the spending plan proposed by Holcomb and the version approved by the House.
The change prompted the new Indiana Technology & Innovation Association to send an alert to its members, urging them to call lawmakers to ask for full funding for the program.
“The 21 Fund is one of the few sources of tech innovation funding in our state,” the alert said. “These funds support tech-related business development, entrepreneurship and technology-focused research and development—all of which helps support and grow Indiana’s technology industry.”
The Senate plan—approved April 16—also eliminated $3 million in funding for computer science education that had been included in the House plan. Lawmakers last year passed a law requiring computer science education in every school by fall of 2021, and the House included the money to pay for teacher training.
Fiscal leaders in the House and Senate have started working in a conference committee to find a compromise between their differing versions of the budget. They have until April 29 to work out a deal.
Erin Sweitzer, a spokeswoman for the Indiana Economic Development Corp., which administers the 21 Fund, said the Holcomb administration wants to maintain the program’s current funding at $30 million per year.
“Conversations with the Legislature are ongoing, as the governor and the IEDC seek to maintain consistent funding levels with the last biennium in order to sustain the momentum we’ve built throughout the state,” Sweitzer said in an email.
“Investments through the 21 Fund help ensure there are quality job opportunities available for Hoosiers, allowing Indiana to attract and retain the talent the state needs to continue growing its 21st century economy,” she said.
Since 2010, the 21 Fund has invested $86.7 million in 306 Indiana startups, securing an additional $598.8M in capital from other sources, Sweitzer said. A Ball State University study in 2016 found that investments from the 21 Fund have a return on investment for the state of more than 20 percent, based on the amount of private funds that are leveraged through the deals.
The 21st Century Research and Technology Fund launched in 1999 primarily as a grant program for university-based projects that involved private partners. The program has changed over the years to put more emphasis on commercialization.
Currently, the IEDC uses the 21 Fund in two ways.
Much of the money goes to Elevate Ventures, an organization that provides funding, advice and support to startups and later-stage Indiana companies looking to scale up operations. Elevate Ventures also partners with universities to fund early-stage companies and commercialize university discoveries.
The IEDC uses the rest of the 21 Fund to support industry-led, public-private partnerships aimed at research and development, in addition to programs to keep talent in the state. For example, the state last year used $3 million from the 21 Fund to leverage $54 million in federal and private funds for microelectronics research at Purdue and the University of Notre Dame
In 2018, about two-thirds of 21 Fund spending went to Elevate Ventures and the rest was distributed through the IEDC for partnerships, although the ratio can vary by year and project.