Missouri could put $1M back into startup support after COVID killed most-recent funding

A budget plan released this week by Gov. Mike Parson includes a $1 million allocation for the Missouri Technology Corporation — a popular public-private initiative boosting startups that saw its investment efforts defunded last year because of COVID-19-related shortfalls.

“It is important that we continue to follow through on key investments in workforce development and infrastructure,” Parson said Wednesday, highlighting priorities during his State of the State address. “We must also continue finding ways to strengthen public safety, improve health care, and make state government more accountable.” 

The governor’s FY 2022 budget recommendation lists $1 million for “Missouri Technology Investment” — the same amount allocated to MTC for FY 2021 before Parson withheld the money in July as part of a $450 million reduction in expenditures to combat declining state revenue during the pandemic.

Click here to read more about MTC’s funding amid the state’s COVID-19 challenges.

Created to promote entrepreneurship and foster the growth of new and emerging high-tech companies, the program’s expenditure was nearly $2.2 million in FY 2020 — down significantly from $17 million as recently as 2016.

MTC supports startups through direct co-investments and a matching grant program (including through efforts like LaunchKC and Digital Sandbox KC), as well as providing funding to nine innovation centers — such as those at the University of Missouri in Kansas City and Columbia, as well as Innovation Stockyard in St. Joseph.

The strategic investment program has deployed more than $47 million in funding to innovative startup companies through its IDEA fund, helping those startups raise over $800 million in additional private capital, according to the Missouri Department of Economic Development. Among the Kansas City startups to have benefitted from MTC funds: backstitch, Boddle, Bungii, Healium, Innovaprep, Transportant and TripleBlind, among dozens of others.

Click here to read more about the companies impacted by MTC’s success — and their fears about cutting its funding.

MTC also largely supports the Missouri Building Entrepreneurial Capacity (MOBEC) Program, which has provided more than $29 million in funding to nonprofits, universities and other organizations that offer entrepreneurial support programs.

Advocates like NEXT Missouri — which has lobbied for MTC’s continued funding based on its economic development benefits — were heartened Friday by the budget development, though they still urged a larger piece of the pie for the program.

“NEXT Missouri supports growing MTC’s funding, especially as new business will help drive economic recovery and growth,” the organization said in an email to supporters. “Even in the face of a challenging budget environment, we would like to see support for MTC return to, at least, the level as supported by the Senate in 2020.”

In May 2020, the Senate Appropriations Committee recommended $3 million for MTC before the amount was later reduced to $1 million as the $35 billion budget advanced to the full Missouri Legislature.

The Legislature typically passes state budget in April or May, advancing it back to the governor’s office for signature. FY 2022 begins July 1.