"We focus on growing our own.” That’s the mission of the two-year old Iowa Innovation Corporation (IIC), according to its president and CEO, Kirk Bjorland. As the private side of the public-private partnership with the Iowa Economic Development Authority, IIC works to ensure that business owners and entrepreneurs have access to the resources they need to be successful. “We take an idea from the idea stage to the commercialization stage,” says Bjorland.
How? By facilitating access to funding, expertise and other resources required by business owners and entrepreneurs so they can focus on growing their business. Bjorland likens IIC’s role to that of a hotel concierge, who provides a variety of services for guests, making their stay more enjoyable, productive and successful.
The four primary services provided by the Iowa Innovation Corporation are access to funding, mentoring, aftercare and assistance with grant applications.
“We help make sure that venture capital funding is in the market at all levels,” says Bjorland. “Through networking and mentoring, we help turn non-bankable deals into bankable ones.”
A mentoring program administered by IIC connects entrepreneurs with research at such state universities as Iowa State and the University of Northern Iowa (UNI) and business expertise resident in economic development groups, chambers of commerce and private companies.
“We’re working with those players to see who specializes in what areas so that if an entrepreneur needs assistance in a certain area, he can go meet with a retired CEO — maybe he even needs a CEO for six months,” notes Bjorland. ”We help put them in touch with the right expertise. This goes for the guy tinkering in his garage up to a major corporation embarking on a new innovation path.”
Aftercare refers to services provided to those who have received state funding resources. IIC makes sure funding was applied successfully to the venture, determines future funding needs and makes available additional mentoring resources as needed. “It’s not a case of ‘Here’s your money, now good luck,’” says Bjorland. “It’s about determining what else we can help with to get the venture to the next stage, the next bankable deal.”
Iowa Innovation Corporation also administers the Small Business Innovation Research and Technology Transfer (SBIR/STTR) Outreach Program of the Small Business Administration. Specifically, it provides concept reviews for Phase I and Phase II proposals, offers grant writing services and provides professional grant administration coaching for Phase I awards. Solix Grant Management Solutions, a third-party consulting firm, provides some of these services on behalf of IIC.
The Innovation Ecosystem
Bjorland says IIC is ramping up efforts to make known to innovators and entrepreneurs the services it provides. “Does the Iowa Innovation Corporation support innovation, or do we support the network? The answer is both,” he asserts. “Across Iowa there is everything from a start-up organization to a chamber of commerce to an economic development corporation to farm bureaus to insurance providers, and we’re working on that ecosystem so that the Iowa Innovation Corporation can match those who are in that space with the party who can get them to the next level.”
‘‘It’s not a case of ‘Here’s your money, now good luck.’ It’s about determining what else we can help with to get the venture to the next stage, the next bankable deal.’’
One start-up Bjorland is familiar with spent about seven years working to perfect part of their catfishing pole. “In hindsight,” he relates, “they could have gone to Iowa State or UNI or some of our advanced manufacturers and found the advice they needed. That learning curve would have been a whole lot shorter.”
Good ideas can quickly get bogged down in proof-of-concept research, business planning, funding, grant applications, management team building and marketing tasks — all before the first widget is made. “Our role is to take the entrepreneur through that process, like a concierge would do, helping to find the resources for the innovator to be successful.”
Ames, Iowa
Entrepreneurial Development Center, Inc., Cedar Rapids, connects entrepreneurial needs with qualified community and state resources to provide hands-on professional business direction.
Contact Curt Nelson at 319-369-4955.
The Innovation Incubator at the University of Northern Iowa helps start-up firms in the Cedar Valley reduce their risks and accelerate their growth via technical assistance and the creation of a supportive entrepreneurial ecosystem.
Contact Patrick Luensmann at 319-273-4335.
Iowa State University Research Park features technology and wet-lab incubators, testing labs and resource centers dedicated to business success available on an as-needed basis. The Park’s relationship with Iowa State University, as well as with the federal labs in the area, allows entrepreneurs to gain access to a wealth of knowledge in a wide variety of fields.
Contact Mike Upah at 515-296-7828 for more information.
The John Pappajohn Entrepreneurial Center’s R. J. McElroy Student Business Incubator helps student entrepreneurs start and grow their ventures. One of five across Iowa, it specializes in providing business consulting, workshops/trainings, and networking events.
Contact Katherine Kota-Uyar, Associate Director.
Northeast Iowa Business Accelerator provides advisory services and networking opportunities to entrepreneurs, Angel investors, strategic institutional investors, developers, vendors of professional services, financial services firms, community development organizations and local governments located in Clayton, Delaware, Dubuque and Jackson Counties.
Contact Brian Dalziel at 563-556-4166, ext. 250.
The North Iowa Business Incubator features all the traditional services of mixed use incubation with additional non-traditional services made possible by its incorporation into the North Iowa Area Community College (NIACC) and the John Pappajohn Entrepreneurial Center (JPEC).
Contact Daniel Winegarden at 641-422-4191.
University of Iowa Research Park, BioVentures Center, and Technology Innovation Center: The UI Research Park leases building sites and space to growing companies and provides two business incubator programs—the BioVentures Center and the Technology Innovation Center. The BioVentures Center provides wet-lab and office space for life-science companies. The Technology Innovation Center (TIC) provides office space to new technology-based ventures that do not require wet labs.
Contact Stephanie Dengler, Director of Operations at 319-384-2741.
VentureNet Iowa helps build companies through assisting entrepreneurs who have an idea for a product or a service and helping them develop the structure, create the model, and assemble an effective management team.
Contact Jenny Condon at 515-471-1300.
The West Des Moines Business Incubator fosters entrepreneurial activity and assists in the growth of small businesses within West Des Moines.
Contact Jo Eckert at 515-222-3621 or jo.eckert@wdm.iowa.gov.
For a more comprehensive guide to business incubators, accelerators, co-working sites, wet-lab facilities and other resources for start-ups and entrepreneurs in Iowa, visit IASourceLink.com and click on the Growth tab.
By several measures, Iowa’s angel credits program — 20-percent investment tax credits for qualifying businesses and community-based seed funds — was uncompetitive relative to those in place in neighboring states. Iowa Economic Development Authority had been authorized to issue up to $2 million in angel credits per year, but only half that was being disbursed.
The problem was (1) the other states’ comparable tax credits were 25 percent, 35 percent — even 40 percent in distressed areas, in one state; (2) the other states had far more funding allocated to their angel credits program than $2 million; (3) Iowa capped its credit at $250,000 per taxpayer, whereas the other states capped theirs at $1 million — $2 million in one case; and (4) the credits were non-transferrable and non-refundable; the other states’ were transferrable, refundable — or both. Such limitations were not going to advance Iowa’s plans to accelerate entrepreneurism.
IEDA proposed several changes to the angel credits, all of which were passed in the most recent legislative session. They are:
- Increase credit percentage from 20 percent to 25 percent.
- Make credits refundable (but not transferrable). This will make the program more competitive with neighboring states. It will also make the investment more desirable to angel investors than the current credits and will offset for them the reduced maximum benefit also being proposed (see below).
- Focus the credits on individual angel investors and not institutions, and keep the angel credits from competing with the Innovation Fund Tax Credits for investment capital. Doing this means ending the ability of financial institutions, C corporations, and insurance companies to claim the angel credits. The fund managers of the Innovation Fund program are likely to focus on big financial institutions and insurance companies. Because only $2 million in funding is allocated, and because the credit amounts are capped relatively low per taxpayer, IEDA believes the angel credits should be scaled for person-sized investing rather than institutional investing.
- Make the eligibility simpler and align it better with existing programs. Currently, the state offers programs like the Demonstration fund that assists brand new startups and Innovation Fund Tax Credits to assist more mature startups. However, there is a gap in the middle where more funding is needed than the state can provide through loans and grants but less than a bigger Venture fund is interested in. IEDA proposes to target the angel investor credits at this middle ground.
- Eliminate the “community-based seed fund” feature. These funds are capped at small dollar levels that make them economically inefficient to operate as a managed fund. In addition, investors can pool investments through LLCs and LLPs and still claim investments in the same businesses more efficiently.
- Cap individual credit level at $100,000 per taxpayer per year and simplify the cap structure. Currently, as much as $250,000 can be claimed per year but it is structured as a $50,000-cap per investment with a five-investment cap.
- The carryforward period is reduced from five years to three years to reduce future liabilities.
Advance Iowa is an economic gardening program developed at the University of Northern Iowa for mid-sized Iowa companies with an aptitude and attitude for growth. The program, to which companies apply for acceptance, benefits growth companies through several programs and services. These including strategic planning, financial consulting and benchmarking, market intelligence, succession planning and roundtables for peer interaction.
Qualifying companies meet these criteria: Iowa-based, for profit business, 10 to 99 employees, $500,000 to $50 million in annual revenue and provision of products or services beyond its current location.
For more information, visit AdvanceIowa.com.
