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Schimminger Proposes R&D Seed Fund

Business First - by James Fink

Thursday, March 10, 2011
 
 A new state fund that would help underwrite research and development-based start-up companies is being championed by Assemblyman Robin Schimminger.

Schimminger, the Town of Tonawanda Democrat and dean of the area’s state lawmakers, has proposed legislation that would create SEED-NY, a $25 million pool of money that would grant funds to start-up firms, especially those in emerging new technologies. The funding would be capped at $500,000 for most applicants, although biotechnology-based firms would be eligible for up to $750,000 in grants. All grants must be matched on at least a one-to-one basis from other financial sources other than state agencies.

“The need for this fund is critical for the commercialization assistance in New York,” Schimminger said.

The veteran assemblyman said he came up with the idea and repeatedly hearing about the lack of public-sector grants and funds for startup companies. Ironically, many of the firms are basing their business plans on government-sponsored research, often times conducted on university campuses or small business incubators.

“The problem is that these inventions often do not go farther than the inception stage because New York inventors and entrepreneurs lack the resources and expertise to commercially develop their scientific discoveries,” Schimminger said.

The funds would come from a federal $55 million pool that has been allocated to the state. SEED-NY would replace the under-funded Small Business Technology Investment Fund. It has yet to be determined which state economic development agency would oversee the program. The funds could augment other incentives being offered to the company.

Schimminger said he hopes to have SEED-NY included in the new state budget.

“Ideally, it would be part of the state budget, so we can get this going sooner rather than later,” Schimminger said.

Al Culliton, Erie County Industrial Development Agency chief operating officer, thinks SEED-NY could be a significant additional to the menu of public sector aids being offered for research and development-based firms. Culliton is also co-founder of Project JumpStart New York, a public-private partnership initiative aimed to helping upstate-located start-up firms.

“New York support trails the top 25 states by a wide margin, which forces entrepreneurs to go elsewhere,” Culliton said.

Tom Kucharski, Buffalo Niagara Enterprise president and chief executive officer, agrees that SEED-NY could be a key piece in the local economic development funding puzzle.

“In addition to filling a critical need for gap financing for commercialization efforts, such a fund could also be a valuable attraction tool that we could use to entice young companies to conduct not only their research and development here, but their manufacturing activities as well,” Kucharski said.

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