TECH COMPANIES: Study Shows Start-Up Funding Is Working
Governor Branstad says a new study proves a state economic development fund is working.
The study looked at the impact of the Demonstration Fund managed by the Iowa Economic Development Authority. Money from the fund is distributed to technology start-up companies through-out the state.
The study shows just nine of the 110 start-up companies that received funds failed. The 79 firms that responded to the study say they have created a total of 600 jobs.
Iowa Economic Development Authority Director Debi Durham says the companies that receive financing must be willing to fight to survive. “One of the things that’s important to me, is can they get follow-on funding. The state is not their bank, we’re only there to do very small strategic placement of incentives at the right time. Out of those surveyed, 45 percent have received follow-on funding, my goal was to get to 10 percent, so 45 is pretty impressive,” she said.
Durham hopes the fund will receive $2 million this year. She also says she plans to change the program so there is a better system to monitor companies that receive funds.