Last Updated on July 18, 2022 by Indiana Economic Development Corporation
Expanded programs, new federal funding expected to spark private investment and bolster state’s reputation as a global destination for innovation and entrepreneurship
INDIANAPOLIS – The Indiana Economic Development Corporation (IEDC) announced today that the state of Indiana will receive up to $99.1 million in federal funding through the State Small Business Credit Initiative (SSBCI) to expand access to and increase capital for Hoosier entrepreneurs, startups and small businesses.
“As a state, Indiana is strategically focused on creating the economy of the future and investing in the jobs of tomorrow and taking Indiana’s Top 40 Global Entrepreneurship Ecosystem to a Top 5 Ecosystem is an essential goal of that initiative,” said Indiana Secretary of Commerce Brad Chambers. “This SSBCI award will inject critical funding and resources into our ecosystem of current and future entrepreneurs, startups and small businesses who are solving global challenges, creating new technologies, and positively impacting Hoosier communities statewide.”
Indiana is one of the first 14 states and territories to be approved by the U.S. Department of Treasury for this iteration of SSBCI, a program established in 2010 and reauthorized and funded through The American Rescue Plan Act in 2021. This funding, which must be disbursed alongside private dollars, is expected to leverage $10 in follow-on investment for each $1 of SSBCI, providing entrepreneurs and small business owners the resources they need to grow and resulting in at least $990 million invested in Indiana’s innovation and entrepreneurial ecosystem by the end of the SSBCI program.
Indiana will receive a minimum of $86 million and will be eligible to receive another $13 million – for a total of $99 million over 10 years – when the state meets expected targets for the initial allocation. Indiana will leverage SSBCI to expand venture capital investments and create a new program to invest in small business loan funds throughout the state. At least 37% of this funding will be allocated to traditionally underserved small businesses and entrepreneurs, encouraging greater equity in access to capital for Hoosier businesses.
Increasing Availability and Access to Venture Capital for Innovators and Startups
Approximately $70 million of the state’s funding will be directed to accelerating Indiana’s innovative startup ecosystem through direct investments in early-revenue companies. This allocation will significantly expand Indiana’s ability to support pre-seed and seed funding rounds through Elevate Ventures, Indiana’s venture development partner, increasing access to working capital for innovators, entrepreneurs and startups.
This allocation will be invested in Indiana-based companies through the Indiana Angel Network Fund alongside co-investors, with a strategic effort to participate in early funding rounds led by venture capital partners strategically focused on reaching underrepresented founders.
These investments will be available to Indiana-based companies pursuing seed stage financing, meaning they are typically pre-revenue, preparing for clinical trials or regulatory approval, or actively pursuing product-market fit through initial go-to-market activities. Investments from the Indiana Angel Network Fund, which may be made up to $1 million, require a minimum 1:1 co-investment.
More information on the Indiana Angel Network Fund and venture partner-led funding available through SSBCI will be available from Elevate Ventures yet this summer.
Expanding Availability and Access to Capital for Entrepreneurs and Small Businesses
The IEDC will leverage $28 million of SSBCI funding to create a new small business loan fund investment program to provide more capital for entrepreneurs and small businesses, particularly for those that have been historically underserved. Through the program, loan funds that provide debt capital for qualified purposes to Indiana-based small businesses will be eligible to have a portion of those loans purchased by the IEDC, enabling the loan funds to then support more entrepreneurs and small businesses.
More program information and details will be finalized and announced in the coming months, and loan funds will be able to apply to participate. Generally, to be eligible to participate, loan funds – existing or newly created – must lend to Indiana small businesses (as defined by the U.S. Department of Treasury) and support underserved entrepreneurs and small businesses.
Enabling Innovation and Entrepreneurship Resources Statewide
The remaining SSBCI funds will be used to support administrative costs related to supporting entrepreneurs, startups and small businesses through these initiatives and accelerating venture, debt and working capital to Indiana-based companies, cultivating and diversifying the state’s robust innovation and entrepreneurial ecosystem.
Additionally, the IEDC is pursuing another funding opportunity available through SSBCI, the Technical Assistance Grant Program, which will allow the IEDC to provide technical assistance to entrepreneurs and small businesses, readying and empowering them to access capital available through the SSBCI program. The IEDC will use these designated funds to provide businesses and entrepreneurs support as their businesses grow while strengthening the ecosystem of opportunity and entrepreneurship throughout the state.
This is the second SSBCI award Indiana has received, following an initial allocation at the program’s inception in 2010. Then, the state received $30 million, which has supported Indiana startups and small businesses through Elevate Ventures’ pre-seed and seed investments. Since its inception, Elevate Ventures has invested $136 million in Hoosier businesses, attracting $1.9 billion in private co-investment (13-to-1 investment leverage ratio).
Click here to learn more about Indiana’s SSBCI programming.
The Indiana Economic Development Corporation (IEDC) is charged with growing the State economy, driving economic development, helping businesses launch, grow and locate in the state. Led by Secretary of Commerce Brad Chambers, @SecChambersIN, and governed by a 15-member board chaired by Governor Eric J. Holcomb, @GovHolcomb, the IEDC manages many initiatives, including performance-based tax credits, workforce training grants, innovation and entrepreneurship resources, public infrastructure assistance, and talent attraction and retention efforts. For more information about the IEDC, visit iedc.in.gov.
SOURCE: News release from Indiana Economic Development Corporation