By having a presence in Missouri, Kansas and Colorado, RubinBrown has a front row seat to observe the success that not-for-profit organizations are having creating jobs and promoting economic development in the life sciences and technology industries. Three of these organizations are quasi-governmental entities designed to create an extensive network of resources for start-up companies and promote innovation and entrepreneurship. With guidance and support from these organizations, Missouri, Kansas and Colorado are becoming premier locations for start-up life sciences & technology companies.
Missouri Technology Corporation (MTC)
MTC’s mission is “to provide leadership and make strategic investments that help entrepreneurs create and grow technology-based Missouri businesses.”1 MTC has five areas of focus: animal health, applied engineering, biomedical science, defense and homeland security, and plant science. In addition to investing directly in start-up companies, MTC’s strategy includes building innovation centers and incubator labs to provide assistance to start-ups, investing in private and public research institutions, and supporting many other programs. MTC is part of Missouri’s Department of Economic Development. Founded in 1994, MTC has invested in approximately 70 companies. The State appropriated $6.4 million to MTC last year, and Governor Jay Nixon has proposed to increase funding to almost $8.4 million in fiscal 2015.2
Kansas Bioscience Authority (KBA)
The KBA was established in 2004 by the Kansas legislature to create value for Kansas through investments in bioscience. The KBA invests in the animal health, human health, ag and bio-based products, and bioenergy sectors. The KBA invests in programs aimed at recruiting and retaining researchers and students to the state, providing early-stage financing and commercialization support for high-potential innovations, attracting and aiding the development of research institutions and bioscience companies, and assisting small business and research collaborations obtain financing. The KBA is funded in accordance with the Kansas Economic Growth Act of 2004, which created a funding mechanism through growth of state income-tax withholdings from employees of bioscience companies.3
Colorado Bioscience Discovery Evaluation Grant Program (BDEGP)
The BDEGP was created in 2006 with the mission of supporting the development and commercialization of technologies in Colorado. The program allocates funds to Proof of Concept grants, Early-Stage Company grants, and to Commercialization Infrastructure. Since 2007, the BDEGP has awarded 163 Proof of Concept grants to substantiate research at Colorado research institutions with commercial applications. Early-Stage Company grants, 53 of which have been awarded to date, provide funding for companies commercializing technologies by funding research, testing, and business development activities to prepare the companies for additional third-party financing. BDEGP Commercialization Infrastructure funds are used to fund The Colorado Institute for Drug, Device and Diagnostic Development, The Colorado Center for Drug Discovery, The BioFrontiers Institute at the University of Colorado Boulder, and the School of Pharmacy and the University of Colorado Anschutz Medical Campus.4
MTC, KBA, and BDEGP have generated positive investment returns, positioned start-ups to raise additional investments, and created jobs.
MTC has invested $12.5 million in Missouri Innovation, Development and Entrepreneurial Advancement (“IDEA”) Funds. Since 2011, IDEA Funds have assisted over 40 companies. MTC’s investment of $12.5 million positioned the recipients to raise over $58 million in additional private capital. Investment also resulted in job creation. For example, MTC provided funding to establish and expand the IT Entrepreneur Network (“ITEN”) as a resource throughout the state, and ITEN member companies have created 850 new full-time jobs since its founding in 2008. MTC also played a significant role in assisting the launch of Arch Grants (through the MOBEC program), and in just over one year, Arch Grant winners have created 128 new jobs in St. Louis.5
Through fiscal 2012, KBA investments resulted in “1,664 new jobs paying on average nearly twice the state’s average wage, $133 million in new research funding attracted to the state, $119 million in equity investments that help Kansas companies thrive, and $294 million in capital expenditures to build bioscience infrastructure.”6
Since the inception of Colorado’s BDEGP in 2006, approximately $27 million from the Cash Fund has been granted, attracting more than $38 million in matching funds. By the end of fiscal year 2013, the BDEGP had awarded 220 grants, 159 of which have completed work, with others still in process. Program successes include the creation of 45 new Colorado companies and approximately 381 new jobs.7
Additional information on the programs is available on their respective websites: Missouri Technology Corporation, Kansas Bioscience Authority and Colorado Bioscience Discovery Evaluation Grant Program.
RubinBrown has a dedicated Life Sciences and Technologies Services Group and a dedicated Entrepreneurial Services Group. These teams provide consulting and accounting expertise with a focus on early-stage and other entities participating in or supporting life sciences and technologies industries.
4Bioscience Discovery Evaluation Grant Program Update as of June 30, 2013.
5Missouri Technology Corporation’s 2013 Annual Report.
6Kansas Bioscience Authority’s 2012 Progress Report.
7Bioscience Discovery Evaluation Grant Program Update as of June 30, 2013.
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