Evan Luxon says his small but growing startup company would still be in San Francisco rather than Omaha but for an innovative eight-year-old state program that helps entrepreneurs.
The Nebraska Business Innovation Act, Luxon said, helped persuade him that he could relocate to his hometown and still attract the investment and skilled workers he could easily find in the Silicon Valley area to take his medical equipment firm beyond the idea stage.
Grants from the program, he said, helped leverage private funds and federal grants that led to production of a prototype of a “digital drain,” which automatically clears chest tube blockages following heart surgeries. The invention now has FDA approval and is in clinical trials, and the firm he co-founded, Centese, has 6.5 employees in Omaha.
“It gave us traction,” Luxon said of the state’s help.
On Wednesday, Luxon was among a handful of successful entrepreneurs who testified in support of a bill in the Legislature that would increase funding in the Business Innovation Act by $4 million, to nearly $10 million a year.
Backers of Legislative Bill 334 said the extra state funding would encourage more startups in Nebraska.
State Sen. John Stinner of Gering, who introduced the bill, said that the Business Innovation Act has been “incredibly successful,” leveraging about $4.50 in private investment for every $1 provided by the state.
“We need to address the lack of capital to help high-growth businesses, especially technology-related businesses, get started in Nebraska,” Stinner said.
When the act was passed, Nebraska ranked 49th in the nation in access to venture capital. Now, the state has risen to 31st.
The Innovation Act provides matching seed money for companies, as well as funds for production of product prototypes, research and microenterprises.
The $4 million in new funding would come from ending the state’s Angel Investment Tax Credit Act, which Stinner and others said had outlived its usefulness. Many of the same investors were getting the tax credits, backers of LB 334 said, and the Business Innovation Act created more and better-paying jobs, generating salaries that averaged $53,000 a year versus $32,000 a year for startups aided by the angel investments.
The Legislature’s Appropriations Committee took no action on LB 334 following Wednesday’s public hearing, but a national consultant who reviewed the state’s economic development programs recommended in December that funding for the Business Innovation Act be doubled.
This article provided by NewsEdge.