Los Alamos quantum dots tech company UbiQD received a NM SBIR matching grant in 2018
The New Mexico Economic Development Department (EDD) will sweeten the pot for up to five small companies that receive Small Business Innovation Research (SBIR) grants from the federal government to help in the research and development of technologies with high potential for commercialization.
The EDD is accepting applications until February 18 from federal grant recipients who want an additional infusion from New Mexico’s SBIR Matching Program. Despite the program’s name, it’s not a dollar-for-dollar match: Federal SBIR awards can range from hundreds of thousands of dollars to several million, while the New Mexico match is limited to $50,000.
New Mexico’s matching program began as an EDD pilot in 2017 using funds from the State Small Business Credit Initiative, which Congress funded in 2010 to stimulate bank lending after the financial meltdown and recession of 2007-2008.
The project involved four startups in Los Alamos, Albuquerque and Taos and was considered so successful that EDD decided to keep it going. EDD’s overall objective is to help tech-based companies grow and increase the tax base.
“The New Mexico SBIR Matching Grant Program offers competitive grants that invest in New Mexico science and technology companies with the goal of product commercialization, market entry and customer acquisition,” said Dr. Myrriah Tomar, director of the EDD Office of Science and Technology.
The original four companies received SBIR-match funding in January 2018; three received funding last summer, and six were funded in November. This application cycle is the fourth round of funding.
The state feels confident investing in companies that have proved themselves worthy of federal funding and have defined a large market for the product they want to develop, according to Tomar. “One of the good things about this program is that companies have already been vetted” through the extremely competitive SBIR awards program, she said.
All applicants for state matching funds must have an active federal SBIR grant that supports Phase I research and development or Phase II commercialization. “If the company is in Phase I, this is to help them get to Phase II,” Tomar said. “Follow-on investment, job creation and product commercialization are the metrics we use to gauge the success of these grants and ensure we are helping our science and technology startups.”
Follow-on funding comes from private investors who get involved once a company completes research and development. So far, private investment associated with the matching program is about $2.3 million.
State matching money is restricted to business development and other tasks that complement, but do not duplicate, what the federal monies subsidize. Federal SBIR funds can only be spent on costs associated with performing the proposed research, while state funds can underwrite marketing, capital equipment purchases, product certifications, patent filings and prototype construction. These are important elements of a company’s survival, because some startups don’t have enough money once they’ve depleted the federal SBIR money to bring their product to market or to attract outside investors.
“These matching funds provide the capital to companies during a critical time of company growth and help offset the added cost of doing business in the state,” said Tomar.
Among the other requirements for receiving state matching funds, applicant companies must be based in New Mexico and spend at least half of payroll dollars in the state. For more information, contact Tomar at myrriah.tomar@state.nm.us or 505-827-0222. Click here to apply for state matching funds.
Finance New Mexico article 593 by Sandy Nelson