U.S. Sen. Chuck Schumer and Rep. Brian Higgins of New York have asked the U.S. Commerce Department and federal Economic Development Administration to fund a new Venture Development Organization called “Launch New York,” WKBW reports.
According to an EDA-sponsored study, Upstate New York universities are leaders in generating new technology and innovation – attracting over $1.5 billion in research activity each year – but the region needs to accelerate turning those scientific advances into new businesses that could create jobs in the region. Because of this potential, Upstate New York was selected as one of seven regions eligible to participate in the Obama Administration’s new JumpStart America initiative, aimed at spurring job growth and small-business growth across the U.S.
“Launch New York” would be modeled after Cleveland’s successful JumpStart program, which provided technical assistance and investments in over 300 companies in 2011 alone. “Launch New York” would provide a bridge to boost a 27-county region, spanning from Erie County to Delaware County, to develop the entrepreneurial ecosystem needed to transform the technologies and ideas generated at the region’s first-class universities and research centers into commercial successes.
Ahead of an end of February meeting with EDA representatives and JumpStart leadership in Buffalo, Schumer and Higgins are urging the EDA to accept the “Launch New York” application as part of their JumpStart initiative, and to subsequently provide it the funding in its 2012 budget that will be necessary for the initiative to flourish, spur entrepreneurship and create jobs.
“We have fantastic universities that are producing game-changing technology and a talented and capable work force hungry for more job opportunities,” Schumer said in a news release. “Now is the time to bring them together. This innovative partnership could reverse a nagging problem that has kept the work done in labs across the state from turning into jobs and new businesses. I strongly urge the administration to take a close look at the plan and plant the seeds that could lead to explosive job growth in Upstate New York.”
“This community is well positioned for growth and this project has enormous potential to provide the lift needed to move the exciting innovation happening in Western New York to tangible business development and job creation,” Higgins said in the news release. “I applaud the public and private partners across the greater region for laying the groundwork that makes this opportunity possible and look forward to working with Senator Schumer to advocate on behalf of this promising initiative.”
“‘Launch New York’ has the potential to not only create jobs and accelerate the economic transformation of a 27-county region of New York but to also transform the way public, private, philanthropic and institutional regional partnerships operate together for enhanced economic outcomes,” stated Ray Leach, CEO of JumpStart.
“Launch NY brings together the seed capital and entrepreneurial resources in a way that leverages our regions existing resources but introduces a new coordinated approach that hasn’t existed before,” said Marnie LaVigne, Associate Vice President of Economic Development for the University at Buffalo.
Upstate New York was one of seven regions across the country chosen by the administration to participate in the JumpStart America initiative to accelerate innovation and entrepreneurship in order to create new jobs. In the near future, a new Venture Development Organization (VDO), named “Launch New York” will be submitting their business plan to the EDA, initiating their application for the federal resources that will support job-growth and entrepreneurship under the Administration’s JumpStart America Initiative. If the “Launch New York” application and business plan is accepted by the EDA, a federally-supported JumpStart in New York could be a new job engine for the 27 counties in Upstate New York. In order to get off the ground, “Launch New York” has applied for approximately $1.2 million in federal support, and Schumer and Higgins are urging the EDA to provide that funding out of its 2012 budget.
Leaders from across Upstate New York have developed a business plan known as the Regional Entrepreneurship Action Plan (REAP). The REAP covers a 27-county region across Buffalo, the Finger Lakes, Syracuse, Ithaca and the Southern Tier, aimed at helping to transform university-led research and scientific advances into business success and job creation. Specifically, the plan would bridge business clusters for emerging technologies that would bring innovators and investors from similar industries together, from diverse geographic regions of Upstate New York. Connections across these innovation clusters would help create the entrepreneurship ecosystem that is currently lacking in Upstate New York, and would be led by a Venture Development Organization to be called “Launch New York”. The VDO would provide entrepreneurship assistance and seed capital, offer access to investment groups, and offer resources to identify, develop and fund high potential startups in the 27-county region. Schumer and Higgins noted that the “Launch New York” effort fits squarely within the Administration’s efforts to spur small businesses and job growth across the country.
According to the research conducted for the REAP, the 27-county Upstate region has the potential to develop successful startup businesses, but lacks sufficient investment capital. In the last year alone, a study commissioned by the US EDA identified ten high-potential startup companies in the region that weren’t able to receive adequate seed funding, because of a lack of available capital. “Launch New York” and the JumpStart Initiative are designed to lay the foundation for an entrepreneurial ecosystem that will, over time, attract private capital to promising regions like upstate New York. Initial “Launch New York” co-locations will be at the NYS Center of Excellence in Bioinformatics and Life Sciences at University at Buffalo and Tompkins County Area Development in Ithaca.
New research shows that start-up companies are the lifeblood of an economy and are responsible for many net new companies. Therefore, regions that suffer from a lack of investment capital will also suffer from slow or negative job creation. The new Launch NY VDO will provide equity investments in New York start-up companies in the Upstate region. During the first 28 months of operation, the VDO projects that it will invest $5 million in approximately 17 startup companies. The projection assumes that the VDO will make a second investment in a significant number of these startups. The VDO will also provide these companies with $1.6 million of advisory services. Schumer and Higgins said that exporting the JumpStart model to Upstate New York and securing federal funding to kick start this operation could be a game changer for New York’s economy.
The JumpStart America Initiative aims to accelerate, “outcome-driven, regional entrepreneurial initiatives focused on high-impact startup and existing firms to create hundreds of thousands of U.S. jobs”. JumpStart focuses on supporting startups and young, high-potential firms as a means to generate jobs in the coming decade and help return the national unemployment rate to its pre-2008 recession levels. The JumpStart America Initiative is focused on coordinating public and private resources to spur entrepreneurship across the country by accelerating regionally-based innovation and entrepreneurial ecosystems.