Tech startups to vie for $30 million in government grants

A new state program is making $30 million in grants available to promising startup businesses in artificial intelligence, biotechnology, finance, health care and other tech fields, Gov. Kathy Hochul announced.

The Pre-Seed and Seed Matching Fund Program will distribute $50,000 to $250,000 per applicant, which must be matched dollar for dollar with private investment.

The government money comes from the federal State Small Business Credit Initiative, which earmarked more than $500 million for New York State last year, according to Sen. Chuck Schumer (D-N.Y.), the majority leader.

The new program will be run by NY Ventures, an ongoing venture capital fund overseen by Empire State Development, the state’s primary-business aid agency.

NY Ventures has backed more than 60 startups across the state, including several on Long Island via two Accelerate venture capital funds that have since closed. Another initiative, which has also closed, the Innovate New York Fund, has supported 81 companies statewide.

To be eligible for the new program, a startup must have secured $2 million or less from investors and have its headquarters and at least one top executive based in the state.

More information is available at esd.ny.gov/pre-seed-and-seed-matching-fund-program.

ESD CEO Hope Knight said it’s very difficult for startups to secure funding in the early years before they turn a profit. “Even companies that are a household name now started out as just an idea,” she said, referring to Apple Inc. and other Fortune 500 companies.

Accelerate Long Island chair Stacey Sikes, agreed, saying, “Seed funding is both challenging for startups to secure and critical to their growth, and the new seed fund matching program can provide a boost for entrepreneurs looking to scale their businesses here on Long Island.” Accelerate seeks to help startups in Nassau and Suffolk counties with business expertise, finding office space and connecting to financiers.

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.