SSTI Digest

This may be one of the best environments for tech companies to receive funding since the extreme financing figures recorded during the tech boom in 2000, according to a new Small Business Administration (SBA) factsheet. In Q1 of 2015, venture capital (VC) investments totaled $13.4 billion making it the fifth straight quarter to see over $10 billion in VC investments. This trend is part of a sizeable post-recessionary rebound in VC evidencing major growth – VC investments have grown by more than 150% over the last five years. However, this increased VC activity is not benefiting many early stage startups because VCs are shifting away from funding startups as they are just developing. Most VCs are making targeted investments in more mature tech companies in order to potentially jump in before companies go public. The result of this trend of late stage investment by VCs has caused a reduction in the availability of risk capital for promising startups. Read the factsheet…

Nearly one million U.S. workers have gone to work for themselves since February 2015, according to recent survey results from the Department of Labor as reported by Bloomberg Business. In May, the number of U.S. self-employed workers surged by 370,000, the largest single-month gain since the Great Recession. The Kauffman Foundation reports that U.S. startup activity improved in 2014, reversing its post-recession downward trend, with startup activity growing in 32 states. In addition, the annual Global Entrepreneurship Monitor 2014 Global Report suggests that most Americans believe there are good opportunities for entrepreneurship in the current economy.

Although the uncertainty associated with business churn may cause concern for some, regions with more job turnover also exhibit signs of higher life-satisfaction, according to a recent study. In Creative Destruction and Subjective Wellbeing, researchers from Harvard University, Princeton University, and the University of Pennsylvania use cross-sectional MSA level data to analyze the relationship between turnover-driven growth and subjective well-being. Ultimately, the authors find life satisfaction is significantly higher in regions with high job turnover rates. 

On Monday, Oklahoma Gov. Mary Fallin signed a $7.1 billion fiscal year 2016 budget (HB 2242) that includes a 3.5 percent reduction in base higher education funding. A portion of this reduction was offset by an agreement to pick up the cost of higher education bond debt service, which brings the net percentage reduction closer to 2.44 percent, according to the The Oklahoman. K-12 education funding will remain at current levels.

The budget includes $16 million in appropriated funds for the Oklahoma Center for the Advancement of Science and Technology OCAST). Another $4.8 million in dedicated and other funds will be provided through the state's Research Support Revolving Fund to finance OCAST duties.

Hawai’i Gov. David Ige signed into law a bill (HB 623) that would increases the state’s renewable portfolio standards to 30 percent by the end of 2020; 70 percent by the end of 2040; and, 100 percent by the end of 2045. With the passage of the new renewable energy mandate, the state became the first in the country to have a statewide renewable goal of 100 percent. This marks a drastic shift from the state’s current distinction as the country’s most oil-dependent state. The state spends nearly $5 billion a year on foreign oil, according to a release from the governor’s office. Luis Salaveria, director of the Hawai’i Department of Business, Economic Development and Tourism, hopes that the new mandate will drive investment and make the state a more attractive destination for entrepreneurs and businesses from around the world, looking to develop, test, and prove emerging renewable technologies and strategies.

Last week, the U.S. Small Business Administration (SBA) released a combined synopsis/solicitation with the intention of awarding up to three contracts for entities to head regional innovation cluster initiatives. SBA intends to make three awards including one to an entity that will provide cluster initiative services to a community affected by changes in the coal economy. Each contract awarded will be for a base year (not to exceed $500,000) and four option years. Applications are due August 4, 2015. Read the solicitation (SBAHQ-15-R-0015)…

The Small Business Administration announced the FY15 awardees of its Federal and State Technology (FAST) Partnership Program. In FY15, 20 state and local economic development agencies, business development centers, and colleges and universities will receive $100,000 each to support programs to establish and/or sustain programs that provide support to innovative, technology-driven small businesses in their state and help them compete in federally funded research and development through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Activities supported by FAST awards include: research and development assistance; technology transfer efforts; proposals development and mentoring for small businesses applying for SBIR awards; and, the commercialization of SBIR/STTR-funded technologies.

Recipients of the FY15 FAST awards include:

Uber and the City of London are among the growing number of backers of a nearly driver-free world. Proponents of autonomous vehicles contend that they will lead to large cost savings for both consumers and transportation organizations while delivering a faster, more efficient transportation experience. However, there are still major strides to be made before the technology can be safely deployed in real world settings. Several U.S. states, cities, and the Canadian Province of Ontario have recently announced initiatives in an attempt to position themselves as leaders in the rapidly growing industries of autonomous and connected cars.

Michigan
Several new initiatives to support the Michigan’s growing autonomous and connected car industry clusters have recently been announced. The long-time home of the U.S. auto industry, Michigan hopes to remain a global hub for next-generation automotive technologies as they evolve.  

Using the latest data update of the National Science Foundation’s National Patterns of R&D Resources series, this article, the third and final of SSTI’s series on basic research, describes how the performers of R&D and basic research in the U.S. have changed over time.

Kansas City is leaving millions of dollars on the table, funding that could fuel early-stage startups that are the key to creating jobs and economic growth, according to a new report from KCSourceLink and its partners. The report will serve as a roadmap to a new capital initiative led by the Kauffman Foundation; several regional economic and community development organizations; and, other stakeholders in the Kansas City metro region. The new initiative – We Create Capital – aims to increase the availability of microfinance, angel, seed stage, and venture capital for startups by creating better connections between investors, attracting venture capital to the region, and cultivating a deeper talent pool of people to manage venture capital funds. The plan also calls for increasing awareness about available startup funding sources including federal, state, local, and private sources. Read the strategy...

Texas Gov. Greg Abbott has signed legislation that (SB 632) establishes a new Governor's University Research Initiative and ends the state's Emerging Technology Fund (ETF). Created in 2004, the ETF provided financial support for research partnerships at private companies and state universities through equity investments and grants. The new initiative will not take equity in companies, but instead will focus on university research and commercialization grants. A portion of the funds will be used to fund the recruitment of Nobel Prize-winning researchers and members of the National Academies. The approved FY 2016-17 budget allocates $40 million of the ETF's remaining funds for the initiative. Read the governor's announcement...

In 2009, only 9.5 percent of venture-backed startups had a female founder, according to a research by CrunchBase. By 2014, that figure had almost doubled, reaching 18 percent. During that period, the absolute number of companies with a female founder quadrupled. More women are also seeking early stage funds. The University of New Hampshire's Center for Venture Research (CVR) reports that more than a third of entrepreneurs seeking angel capital in 2014 were women. Despite this progress, women entrepreneurs remain underrepresented in high-tech entrepreneurship. A recent academic article found that women often have to rely on their technical resumes and personal referrals to overcome the biases of investors.