New York has launched a $30 million pre-seed and seed matching fund program for companies in their earliest stages of growth and development.
The initiative, unveiled last week, will offer these businesses $50,000 to $250,000 in growth assistance, which they will match with funds from co-investors in the private sector.
The program is funded by the State Small Business Credit Initiative, part of the federal American Rescue Plan, to support small businesses. It targets firms owned by the socially and economically disadvantaged and tiny operations that traditionally do not receive sufficient access to capital or support. Typically, pre-seed dollars are the hardest to secure in a business’ life cycle.
Access to capital is critical to ensuring the vitality and sustainability of fledgling companies, notes Gov. Kathy Hochul.
“The Pre-Seed and Seed Matching Fund Program will help these businesses gain their footing and create the jobs of the future while expanding access to funding in traditionally underserved communities,” she says.
The program is managed through Empire State Development’s NY Ventures, the state’s venture capital arm, and will be focused on technology markets including advanced manufacturing, agricultural, climate and consumer technologies, health care, medical devices and artificial intelligence.
To qualify, applicants must have raised less than $2 million of dilutive funding to date, officials say. All applicants must be registered to do business in New York and agree to create economic impact in New York with headquarters and at least one executive employee in the state.
“Even companies that are a household name now started out as just an idea,” says Hope Knight, president, CEO and commissioner of Empire State Development. “Through the Pre-Seed and Seed Matching Fund Program, we will target promising startups and very small businesses and ensure that these good ideas become a reality in New York State, especially in traditionally underserved populations and markets.”
Expanding access to venture capital across the state—particularly for historically marginalized individuals, including entrepreneurs of color, and underserved regions—is a goal. Studies show that women and Black founders receive a fraction of venture capital funds.
This program uses part of the state’s more than $500 million in federal SSBCI funding. The dollars will be distributed to Empire State Development from the U.S. Treasury in three tranches as funds are committed.
Smriti Jacob is Rochester Beacon managing editor. The Beacon welcomes comments from readers who adhere to our comment policy including use of their full, real name.