March 23, 2023
If you’re running a startup and plan to raise money in the near future, New York State has launched a program that aims at helping you secure the funding you need.
Dubbed the Pre-Seed and Seed Matching Fund Program, the initiative is designed by the State Small Business Credit Initiative to help startups accelerate their growth. The $30 million fund, which is managed by the state’s venture capital arm NY Ventures and is available to companies across a range of industries (below), allows for dollar-for-dollar matching of private investments. The state has limited its matching to between $50,000 and $250,000 per company. Special consideration will be given to companies (especially C-corporations) in underserved communities across New York State and historically marginalized individuals and companies.
In addition to its fund matching, companies admitted into the program will also receive tools and “key introductions” from Empire State Development to accelerate growth.
New York State was also clear that its investments will be made on the same terms of those made by private equity firms. In other words, New York State’s investment, made through NY Ventures, isn’t grant money, but rather an actual investment, with the state owning a stake in the company.
There are a host of requirements startups must meet to qualify for the Pre-Seed and Seed Matching Fund Program. They include:
The startups must be technology companies with a focus on:
New York State is now accepting applicants to the program and said that applications will be reviewed on a rolling basis. Although there is no deadline for New York-based startups to join the program, once the $30 fund is exhausted, the program will cease if more funds aren’t added.
Not surprisingly, the Pre-Seed and Seed Matching Fund Program will be a selective process and not every company that matches the requirements will necessarily receive the state’s funding. The state said that it hopes to provide feedback on applications within 30 days, then conduct an interview with the company’s founder(s). As part of its due diligence process, New York State will “evaluate business model, market size, team, product, financials, competitive advantage, impact for New York State, and any other criteria the team finds relevant.”
New York State also warned that since federal law requires NY Ventures make its investment within 90 days of the closing of a round, founders looking for matching funds should submit their applications fewer than 45 days after closing their round.
If you’re interested in applying for the Pre-Seed and Seed Matching Fund Program, you can click here to start your application. As always, if you’d like to discuss your application with Perlson, feel free to call our office at 516-541-0022.
It’s hard to believe, but once again it’s time to think about year-end and all the things you need to do to be ready for the 2023 tax season