SSTI Digest

New House appropriations committee chair Tom Cole (R-OK) has announced a rule that nonprofits are not eligible for “community project funding” (i.e., earmarks) from the Department of Housing and Urban Development’s Economic Development Initiative in the FY 2025 appropriations bill. In FY 2024, this account provided $3.3 billion to public and nonprofit organizations, and CQ Roll Call reports that nearly $800 million of the House’s projects went to nonprofits. The rules for FY 2025 also maintain the ban Cole’s predecessor, Rep. Kay Granger (R-TX), placed on all earmarks in the Labor-Health and Human Services-Education funding bill. At this point, the Senate does not seem likely to conform with the House’s change—the Senate has not published a change to its guidance and did not follow the House’s restrictions in FY 2024.

While the growth of female-founded and co-founded companies has increased at a faster rate than those of male-founded and co-founded and mixed gender founded companies, it is still a smaller amount than the other two. Additionally, these companies are more likely to receive a higher proportion of deals occurring earlier in the VC pipeline. Since 2014, companies founded or co-founded by a female have increased by the largest amount of any gender combination. Sixty percent of these founders have received a venture capital (VC) deal, according to SSTI analysis of PitchBook data. Across both male- and female-founded or co-founded companies, this figure drops to a relatively lower 29%, while those founded or co-founded by a male have increased 24% over the same period. The spread of deal types making up these investments, as well as the amount of capital invested, differs greatly; in 2023, female-founded and co-founded companies received primarily pre/accelerator/incubator deals, while male-founded and co-founded companies, as well as those across the two gender groupings, primarily received later-stage VC deals. A prior Useful Stats article, “Female founders…

In the 21st century, some high-tech firms in emerging fields are valued more for their perceived innovation potential than by traditional measures of a successful business. But how does innovation influence the value of existing publicly traded firms? New research by Panteleimon Kruglov and Charles Shaw explores the relationship between R&D intensity and financial performance among S&P 500 companies over 100 quarters from 1998 to 2023 and its implications for firm competitiveness and market positioning. The research employs various econometric models to estimate the relationships between R&D intensity and key financial and operational variables. These variables include total assets, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), physical assets, size, recession indicators, tax rate, dividend yield, and the Graham Number (a measure of fundamental value of a stock). Interesting findings of this study include that while larger total assets and greater physical assets are associated with higher R&D intensity, firm size has a negative relationship with R&D intensity. Also, while economic downturns have a negative impact…

The measurements for success of female-founded and female-co-founded companies, while improving, remain lower than male-founded companies in number, deal count, and capital invested, according to PitchBook’s 2023 Annual US VC Valuations Report. PitchBook found that female-only-founded startups received just 2% of all venture capital (VC) dollars in 2023, while those female-co-founded reached 21% that year—a record high. SSTI analysis of PitchBook data finds that the number of VC deals to female-founded and female-cofounded companies has increased 58% over the past decade, yet despite reaching that milestone, they have been on a sharp downward trend since 2021. This edition of Useful Stats takes a deep dive into these metrics and more using PitchBook data. SSTI analyses are curated into multiple data tools and graphics, revealing the deal count, number of, and capital invested in female-founded and female-co-founded companies across different geographies, VC deal types, and industry verticals. This approach aligns with the definitions underlying PitchBook’s female founders dashboard and extends that tool’s overview of the market and scope by including pre/accelerator/…

“Inclusive clusters have an explicit focus on equity, have identified the precise issues that lead to economic disparities in the cluster and have targeted strategies in place to shrink those disparities,” say the authors of Developing Inclusive Clusters, a recent Insight Report from the New Growth Innovation Network (NGIN) and RTI International. They cite the high-tech industry as a high-wage industry whose benefits “tend to exclude women, people of color, and non-urban communities” and note that this type of disparity has not been “widely or systematically” studied. The authors outline the key decisions that go into creating inclusive clusters. “Creating an inclusive cluster requires looking through a ‘lens of equity and inclusion’ at every decision-making juncture to ensure barriers to inclusion are first identified and then addressed,” they note. The report lists and discusses the key decisions that influence the inclusivity of a cluster. These decisions include: Creating a governance structure that includes a more diverse group of people in the decision-making process; Focusing on an industry cluster that has a high probability of generating opportunities…

On Wednesday, the STEMM (Science, Technology, Engineering, Mathematics, & Medicine) Opportunity Alliance announced STEMM Equity and Excellence 2050: A National Strategy for Progress and Prosperity. In a press release, SOA also announced that its partners have collectively committed more than $2 billion to realize the vision of the national strategy, each committing to “multi-lateral, cross-sector collaboration to achieve systems-level change.” Examples of these commitments include: Microsoft has committed to supporting an educational program, FarmBeats for Students, to increase equitable access to STEMM learning experiences in rural communities around the country. The Education Development Center will expand its Math for All professional development program, reaching about 960 teachers and 44,800 students in grades three through six, thus increasing the number of skilled and diverse educators. The Alfred P. Sloan Foundation is investing about $5 million to support educational pathways from minority-serving institutions (MSIs) to master’s and doctoral degree programs to support the development of STEMM faculty from historically excluded and marginalized…

The Internal Revenue Service (IRS) has released its final rules, as required by the Inflation Reduction Act, to make many clean energy tax credits transferable (able to be sold to a third party) or available for elective pay (a direct payment to the credit holder). Both rules may help expand investment in clean energy by providing mechanisms that get capital to the project’s developer immediately, even if the developer is a nonprofit or public entity that would never have paid any taxes on the project. Credits covered by the rules include the production tax credit, investment tax credit, advanced manufacturing credit, and the hydrogen production credit. For more information on the energy tax credits renewed or created in the Inflation Reduction Act, visit epa.gov; for the new IRS rules, visit treasury.gov.

May 21, 2024, 3:00 p.m. ET Ecosystem mapping facilitates clear communication about the resources, support programs, and key players available to entrepreneurs and innovators in a region. For TBED organizations, it is also a valuable tool for identifying potential partners, facilitating referral networks, and uncovering new strategic opportunities. However, keeping these maps current and reflective of a region’s growing and evolving economic landscape can be a challenge. In this TBED Community of Practice webinar, experts from EcoMap and SourceLink will demonstrate how they approach developing ecosystem maps tailored to your region, as well as strategies to keep these tools up-to-date and seamlessly incorporated into your daily operations. This webinar will provide the actionable insights needed to integrate ecosystem mapping into your organization’s strategic toolkit. Speakers: Sherrod Davis, Co-Founder & Chief Executive Officer, EcoMap Technologies Maria Meyers, Founder, SourceLink Casey Nemecek, Program Director, SSTI Register Now

Traditionally, a scientific discovery's commercial potential is gauged after significant R&D. However, a recent paper by Duke University researchers Roger Masclans-Armengol, Sharique Hasan, and Wesley M. Cohen (2024) proposes a new method for assessing the commercial potential of scientific research before it's fully developed. Using a large language model to analyze scientific findings, the researchers predicted the likelihood that a discovery will lead to marketable products or processes. A large language model is a type of artificial intelligence that analyzes large data sets to make predictions. The researchers validated their method through several means. They tested the model by comparing its predictions with a holdout sample, a common technique to validate machine learning models by splitting data into training and testing sets where some data is withheld during the model fitting process. Next, the authors analyzed how well their new method aligns with the technology transfer process at a major university, tracking how research progresses toward commercialization. Additionally, they examined how the method compares to companies' use of academic research from…

Rev1 Ventures, an investor startup studio in Columbus, Ohio, that combines capital and strategic services to help startups scale and corporations innovate, recently released its 2023 Startup Impact Report. The report notes the entrepreneurs they supported last year raised $390 million in capital with 34 raising pre-seed capital, 16 seed capital, and 19 early-stage capital. The clients generated $192 million in revenue and created or retained 1,013 jobs.  Rev1 invested $6.4 million in 17 companies in 2023 and supported a variety of startups, “including enterprise SaaS technology creating efficiencies in insurance and real estate, advanced technologies in green energy and life science disruptors with novel therapeutics for genetic diseases with no current cure.” Additionally, Rev1 reports the companies it has supported over the last 10 years have surpassed $5 billion in total economic impact in Ohio.

The U.S. Small Business Administration (SBA) has announced the 2024 Growth Accelerator Fund Competition (GAFC) Stage One winners. Each received $50,000 in prize awards for impactful and inclusive approaches to foster a thriving, collaborative national innovation support ecosystem to advance small business R&D. The SBA press release announcing the winners stated that “GAFC Stage One winners are organizations with ecosystem-building activities, including recruitment of new partners and strengthening existing alliances among stakeholders (including public, private, nonprofit, and academic partners), that aligned their submission with one of the following GAFC Theme Areas” of national and economic security; domestic manufacturing and production; and, sustainability and biotechnology. The 2024 Stage One winners are in 41 U.S. states and territories, including Washington, D.C. and Puerto Rico. The following SSTI members were among the 60 Stage One Winners: National and Economic Security Ind.: Central Indiana Corporate Partnership  Md: Association of University Research Parks (AURP) Miss.: Innovate Mississippi Neb.: Invest…

Data center electricity consumption is expected to triple in just eight years, according to a recent report from the Boston Consulting Group. They project the tripling to occur in both the amount of electricity consumed (~130 TWh in 2022 to ~390 TWh in 2030) and its share of total U.S. electricity consumption (2.5% in 2022 to 7.5% in 2030). Of that ~260 TWh increase, BCG attributes ~70TWh to the electricity demands for generative AI. The impact of this demand is being felt in some regions of the U.S. For example, “Data centers in central Ohio are gobbling up vast amounts of electricity so fast that American Electric Power expects demand for power to double between 2018 and 2028,” according to a recent Columbus Dispatch article (subscription). PJM Interconnection, which oversees the flow of electricity in all or parts of 13 states, including Ohio, released its 2024 PJM Load Forecast Report in January 2024. A related press release notes, “Total annual energy use throughout the PJM footprint is expected to increase nearly 40% by 2039, from 800,000 gigawatt-hours (GWh) to about 1.1 million GWh.” The release notes, “Rising energy demand in the region PJM serves is…