After wrapping up a year in which it dealt with drastically reduced state funding, the Missouri Technology Corporation started its new fiscal year this month looking ahead to another year of cutbacks.
The state has budgeted $2.25 million to fund the MTC for fiscal 2019, which started July 1. That’s a $250,000 reduction from last year for the MTC, a public-private partnership created to promote the growth of new high-tech companies in Missouri.
Bill Anderson, the MTC’s executive director, said that previous budget cuts caused the organization to reduce funding for its innovation center program, a group of nine centers across the state that offer resources for entrepreneurs. The MTC reduced funding for the innovation centers, which include the Missouri Innovation Center in Columbia, the UMKC Innovation Center in Kansas City and the Innovation Stockyard in St. Joseph, by 20 percent last fiscal year, and Anderson said he anticipates this year’s cuts to impact the program again.
Still, the state funding reduction the MTC faces for the new fiscal year is significantly less severe than last year, when the organization had its state funding slashed by more than 80 percent. Anderson said one of the main consequences of those cuts was that the MTC had about $7 million less in co-investment activity for the year.
In fiscal 2017, the state funded the MTC in the amount of $13.4 million. For fiscal 2018, that number dropped to $2.5 million.
Asked about Gov. Mike Parson’s impact shortly into the new governor’s second month on the job, Anderson said it is “still difficult to say” whether the MTC can expect a different relationship with Parson than it had with former Gov. Eric Greitens. Anderson pointed out that Parson has not had the opportunity to propose his own budget yet.
“Gov. Parson has historically been supportive of innovation and entrepreneurship,” Anderson said. “We hope to see that continue.”
The MTC recently gave final approval to $450,000 in funding for three startups.
The MTC’s investment committee met in June and recommended funding for four startups. The organization’s board of directors recently approved funding for three of them.
The board approved:
- $250,000 to Babyation, a startup that develops discreet, quiet breast pumps
- $100,000 to H3 Enterprises, a startup that combines music and technology into tools for children’s education and health
- $100,000 to PlanIT Impact, a sustainable design tool
The investment committee had also recommended $50,000 to Jarvis, a mobile concierge technology, but that funding was not approved by the board of directors. The funding was contingent on another investment, which did not come through. Anderson said the board likes Jarvis’ team and will keep working with them.
The MTC has deployed about $43 million, and the companies it has funded have raised more than $500 million in additional private capital, according to Anderson.
“In terms of helping out with capital formation, the program’s been really successful,” Anderson said.
Since 2011, Anderson said, the MTC has exited its investment or had a return on the capital it provided for seven portfolio companies.