Innovation vouchers help start-ups bring their ideas to life.
Startups, small businesses and entrepreneurs with ideas that have commercial potential can access state funding through a research-focused grant program.
The Innovation Voucher Program supports high-potential startups with up to $50,000 to kickstart product development, simulation, and research. To receive funding through the grant program, applicants must partner with a research provider, such as a university or research-focused nonprofit organization.
The funding can be used to subsidize expensive testing and research that small businesses cannot afford on their own, and partnerships can provide expertise and access to equipment and data.
The program was born out of a partnership between the Indiana Economic Development Corporation and the Institute for Applied Research, a Bloomington-based nonprofit that advocates for and coordinates innovation and technology funding and strategies in Indiana.
The goal of the voucher program is to further encourage entrepreneurship and innovation by helping start-ups and grow. The program is also sometimes run in conjunction with other federal programs such as Small Business Innovation Research grants and Small Business Technology Transfer grants, commonly known as SBIR and SBTT grants.
IBJ spoke with David Roberts, CEO of the Institute for Applied Research, Brooke Pyne, the organization’s executive vice president of innovation and strategy, and Courtney Baker, project manager for the Innovation Voucher Program, about the vouchers and how small businesses can get them.
Could you please give us an overview of the program?
Roberts: The whole idea was, how can we help small businesses better utilize the resources that we have as a state? … This includes, of course, the universities and colleges we have in the state, but also a lot of industry-specific nonprofit resources.
The idea is… [state’s] The Manufacturing Readiness Grant has been pretty successful. The Innovation Voucher tells small businesses, “If you’re willing to put money into technology development in Indiana with our nonprofit partners, we’ll subsidize that activity up to 50 percent.”
Demand has been high and it has been a very successful program both in terms of adoption and impact on companies.
What do you look for in a startup application?
Roberts: The biggest thing is that they commit to investing, growing their company and developing their technology in Indiana. This is not a voucher that you can use in California or Massachusetts or across state lines. They have to develop their technology and grow their company in Indiana.
Number two, we’re taking on risk. The state will not put in more than 50%. [the project].
I think it’s also opportunistic, so as written in the law, companies don’t have to be formally present in Indiana, but they do have to have a bona fide intent to come to Indiana, so they could be part of an attraction project that the state or the IEDC can use.
It’s been a pretty good success [the voucher has] It was included in several offers to companies looking to expand into Indiana.
Small businesses can receive up to $50,000, but what is the typical payment amount?
Baker: Almost across the board. The lowest we had was [a] It was a $5,000 project. It was a simple research project that we wanted to do in collaboration with the University of Southern Indiana, so the costs and labor were pretty low.
And then a significant number, I mean most applications, apply for $50,000, but depending on the statement of work, that can vary a little bit.
What types of businesses are applying for this funding?
Roberts: There are many technology-oriented companies. Specifically, Purdue University and [Indiana University] Or you go to Notre Dame or another university and you have an idea as point A and you try to get to point B.
These companies tend to be, but are not always, in the early stages of their life cycle. There are several examples of established companies that qualify as small businesses that are repeat adopters of new technologies. [But] Most of the companies are small and I would say early stage.
Aside from funding, what else will companies get out of the program?
PineThis is now a program that accelerates innovation because it allows us to fund some of the early connections and partnerships that actually get us to a faster transition point to realizing innovations that have commercial potential.
This program is what we often call an “innovation enabler” that resides within all of the ecosystems that we support, because the program is not focused on one technology sector. There are many different sectors, including life sciences and manufacturing. … This program really built the initial framework to get innovation off the ground and move it quickly to the next stage or level.
Baker: In that ecosystem connection, we have another program called the INForm Series, which works with small businesses that are working through the SBIR/SBTT process. And Matt Burkett, who runs it, and I work very closely and share a lot of companies. If there are companies that are interested in innovation vouchers and are also looking to get local funding, I can introduce them to Matt. And in the same vein, he introduces me to people who are maybe in the early stages. … He can introduce them to me for innovation vouchers to expand their research or expand their current SBIR award.
RobertsOur job is to take someone who says, “I never thought I’d need help with communications or technology,” and in 10 seconds introduce them to someone who runs an advanced communications lab. Or someone who comes in from the lab and says, “I never thought there’d be problems with batteries in wearables,” we introduce them in 10 seconds and help them iterate on their technology and grow faster.
When is the next application deadline?
Baker: The program is evaluated three times a year in January, May and September on a cohort basis. Applications are accepted at any time. You can submit at any time. This is the time when we will evaluate your project.
We just finished the May group and approvals will be issued soon. The next approval is in September. Approvals are always on the third Friday of the month, so the deadline is the third Friday of September.
It will go through several evaluations. ARI will do their own internal review and make a recommendation before sending it to the state. Because this is state money, the state will have the final say on whether to approve or deny the project. This process will take about a month to a month and a half.
One thing to remember when applying is to allow some time for that process before you start your project. Your deadline may be the third Friday of September, but if you try to start at the end of September, you will have to postpone the project to allow time for the evaluation and contracting process. Then you can start the project. Once everything is signed and fully executed, you can start innovating and researching.
Why make this investment? What’s the big picture?
RobertsThe ideal situation would be for a company to be founded here with a great idea, grow here with a great support network, and continue to grow until it becomes a major player in the state’s economy. That’s pretty much it.
It really makes me sad to hear that technology was born here and that some people felt they had to move somewhere else to grow their company to realize their vision.
We want to provide every opportunity and investment to ensure that companies that make significant contributions to Indiana stay in Indiana.
