SSTI Digest

Crowdfunding was poised to make a major splash on startup financing in 2013, aided by the passage of the 2012 JOBS Act, a projected explosion in the number of crowdfunding portals and the adoption of state crowdfunding exemptions. However, the crowdfunding industry did not have the anticipated gamechanging impact on startup financing, mostly due to the Securities and Exchange Commission’s (SEC) cautious approach to the adoption of the crowdfunding rules mandated by the JOBS ACT. The SEC eased into the crowdfunding era by allowing for the general solicitation by businesses to raise equity from accredited investors via secure web-based portals. Finally, late in 2013 the SEC released proposed rules that would allow for equity crowdfunding from unaccredited investors sometime in 2014. States Push Ahead with Intrastate Crowdfunding ExemptionsWhile the SEC carefully developed its rules and regulations, states developed their own intrastate crowdfunding exemptions focused specifically on increasing the availability of  and retaining startup capital in their communities. On December 31, Michigan Gov. Rick Snyder signed into law Public Act 264 that will allow…

Since 2011, three states (Kansas, Georgia and North Carolina) have enacted securities exemptions that allow their state's entrepreneurs and small businesses to raise up to $1 million dollars via the sale of securities to residents of the state — Washington lawmakers introduced similar legislation in 2013 session where it is still pending. These exemptions, commonly referred to as crowdfunding exemptions, are intended to increase the pool of investors for small businesses by allowing them to publicly offer securities without having to spend the significant time and cost associated with registering a sale of securities with the state The enacted exemptions from Kansas, Georgia and North Carolina as well as the proposed legislation in Washington share several similarities including: All states require that the issuer be a business/organization formed under the laws of the state. All state allow issuers to use a state-regulated broker dealer/funding platform, but it is not required. All States require all investors to be a resident of the state; North Carolina and Washington also require the issuer to receive evidence of the investor's residency. In…

While public debate rages over the role of surveillance in our society, one particularly infamous government surveillance technology, drones, is being prepared for private sector deployment in the U.S. Drone-related technologies are predicted to revolutionize commerce in the U.S., with industry projections valuing their initial deployment as an $82 billion boost to the national economy. In preparation for Federal Aviation Administration (FAA) rollout of drone-use regulations in 2015, entrepreneurs, multinational corporations and state governments are scrambling to be in a competitive position to benefit. While drones have been scrutinized in the press for their extensive use in overseas counter-terrorism operations, entrepreneurs at universities and startups across the country are experimenting with hundreds of potential civilian uses for the technology. State-by-state projections for the economic impacts of drone technology are widespread and robust. California is expected to win big because of its drone manufacturing base while Midwestern states like Kansas are expected to capitalize from the industry's agricultural applications. One of the key selling…

Amid the economic uncertainty surrounding fiscal cliff negotiations, and what it means for states, some governors are erring on the side of caution when it comes to funding recommendations for the upcoming year. At the same time, several state budget officers are projecting significant revenue shortfalls in the current fiscal year or biennium as a result of lower than expected tax collections. States could lose an estimated $7.5 billion in federal funding if the automatic spending cuts take effect for 161 grant programs, according to a recent analysis by the Associated Press. States with heavy defense spending, such as California, Texas and Virginia could also take a hit with $33.6 billion in cuts slated for military and defense contractors. In the coming months, governors from across the nation will present their State of the State addresses — a key time to unveil new and expanded TBED programs. But for some states, shoring up budgets and preparing for worst case scenarios is the top priority. Following is a synopsis of recent news announcing budget deficits throughout the states and possible short- and long-term solutions from state officials.…

While election night's main focus was on the presidential race, the importance of ballot measures for states and metros is growing as public services and budgets are being severely trimmed. A recent article in The New Republic reports on a new trend where states are embracing ballot measures as a potential source of dedicated funds for targeted investments in regional economic growth and development. Aside from California Gov. Jerry Brown's victory in raising taxes on top earners to help fund education and balance the budget, most state measures to increase taxes were defeated by voters. This includes extending a one-cent sales tax increase in Arizona, a cigarette tax increase in Missouri and implementing a 1 percent sales tax increase in South Dakota — all of which were slated to fund education. Voters were more supportive of borrowing to invest in higher education infrastructure, but rejected measures to improve teacher standards and build new revenue streams for universities. The only energy issue on the ballot appeared in Michigan and failed to garner enough voter support. Measures to provide more state authority for providing economic…

The Kansas Bioscience Authority (KBA) has launched a collaborative partnership of more than 90 contract research organizations (CROs) to help the region compete in the pharmaceutical and medical device industries. BioResearch Central will help promote the Greater Kansas City region as a destination for pharmaceutical R&D at a time when drug companies are increasingly looking overseas for their contract research needs. The announcement follows the release of a KBA commissioned study that suggests pharmaceutical contract research is a $90-$105 billion industry in the U.S., much larger than previous estimates. BioResearch Central will attempt to link the Kansas City region's CROs and related service providers to build a nationally-recognized research network, providing a wide spectrum of services for pharmaceutical and biotechnology companies. The CROs involved in the network provide a wide spectrum of research services, including drug discovery, toxicology, bioanalysis, clinical trials, and regulatory and commercial support. These companies currently generate almost $1 billion in annual revenue and employ more than 9,000 people in the Greater Kansas City region.…

Governors in Kansas and New York unveiled budget proposals for FY13 that would maintain funding for economic development proposals initiated last session. In Kansas, Gov. Sam Brownback proposed funding for a new Creative Industries Commission, while New York Gov. Andrew Cuomo proposed a new round of $200 million in competitive grant funding for the state's regional economic development councils.Kansas Gov. Sam Brownback's FY13 budget includes $3.3 million for the Innovation Growth program, established last year to operate grant programs previously managed by the Kansas Technology Enterprise Corporation (KTEC). The program also manages the Small Technology Pilot program that helps target and recruit small, tech-based companies to the state. Funding comes from the Economic Development Initiatives Fund within the Department of Commerce. A new Creative Industries Commission also would be established by merging the Kansas Arts Commission and the Kansas Film Commission. The board would be seeded with $200,000 in FY13. Gov. Brownback seeks to eliminate nearly two dozen tax credit programs in the coming year, including the angel investor tax credit created in 2004,…

A newly established policy academy providing guidance and technical assistance will help seven states improve their environment for innovation and align state R&D investments, workforce development and education systems with current and future needs of advanced manufacturing industries. The policy academy will help each state develop a plan or overcome barriers for putting a plan into action through a highly interactive team-based process that includes input from NGA, MEP, EDA, SSTI, private sector consultants, and research organizations. Participating states include Colorado, Connecticut, Illinois, Kansas, Massachusetts, New York, and Pennsylvania. Ideas and strategies resulting from the academy's work will serve as models for all states. NIST, MEP and EDA are providing funding, leadership and technical assistance to the National Governors Association Center for Best Practices. Learn more...

The University of Kansas' Center for Technology Commercialization is seeking a director that will be responsible for effectively managing faculty-generated intellectual property across all the University of Kansas campuses and deploying it for the greater social good. The KUCTC director's responsibilities include positively representing the University as a member of national professional societies, articulating KUCTC's contributions to the Kansas economy for diverse constituencies that include the Kansas Legislature, industry associations, and the general public, and working effectively within the University's system of shared governance with faculty, the University's administration, the KU Medical Center Research Institute and the Kansas University Center for Research.

E. William (Bill) Colglazier, recently retired executive officer of the National Academy of Sciences and the National Research Council, has been selected the Science and Technology Advisor to Secretary of State Hilary Clinton. Florida Gov. Rick Scott named Doug Darling to head up the newly formed Department of Economic Opportunity. He also named Cynthia, Lorenzo, who had been interim director, to head up the Agency for Workforce Innovation. Steve Jenkins has left his position as senior vice president for economic development at Go Topeka. Denyse Ferguson has been named vice president of economic development at the Cincinnati USA Partnership, the chamber's economic development arm. Ferguson previously served as the president and CEO of the Lansing Area Economic Partnership, Inc. (Leap, Inc.) in Michigan.

Maine Gov. Paul LePage has nominated George Gervais, the acting commissioner of the Maine Department of Economic and Community Development as commissioner. His nomination must be reviewed by the Joint Standing Committee on Labor, Commerce, Research and Economic Development and confirmed by the Senate. Ned Staebler, former vice president of entrepreneurial services of the Michigan Economic Development Corporation, has taken the position of vice president of economic development at Wayne State. Ann Arbor Spark announced the hiring of several new executives as well as the promotion for former interim CEO Skip Simms. The Spark hires are Brittany Affolter-Caine, director of talent; Lukas Bonner, vice president of business development; and Donna Doleman, vice president of marketing, communications and talent. Simms was promoted to senior vice president from vice president. He will continue his role as the nonprofit's head of entrepreneurial business development. Terry Osborn, director of commercialization with the Kansas Bioscience Authority Heartland Bioventures program, announced that he has accepted a position as CEO of KCAS, LLC. Missoula Economic…

The budget approved by lawmakers for FY12 includes $15 million in research grant money for three Kansas universities to expand programs in emerging industry sectors as proposed by Gov. Sam Brownback and allocates $10.5 million annually for an initiative to enhance engineering education and increase the number of qualified engineers in the state. Announced by Gov. Brownback earlier this year, the University Economic Growth Initiative will provide $15 million for research in areas seen as critical to growing the state's economy (see the Jan. 26, 2011 issue of the Digest). This includes $5 million each for animal health research at Kansas State University (KSU), cancer research at the University of Kansas (KU) Medical Center, and aviation research at Wichita State University. The universities must provide a dollar-for-dollar match. Lawmakers also approved a bill allocating $10.5 million per year to expand engineering programs and create a steady stream of graduates for businesses. Specifically, the University Engineering Initiative Act aims to increase the number of graduates to 1,365 per year by 2021. The money, which comes from lottery revenues, will be split…