Innovation funding has become a reality in Iowa. HF 615 was approved by the Iowa Legislature and signed by Governor Branstad today. HF 615, originally named the Iowa Innovation Fund, fills the critical gap between angel and venture capital funding for emerging Iowa businesses. It is often referred to as “next stage” funding because it provides capital for businesses to evolve and move forward. HF 615 will help strengthen early stage funding in Iowa’s financing continuum by leveraging up to $32 million per year in new seed stage capital investments for Iowa-based businesses with high-growth potential.
“HF 615 will help incent capital formation during the period of development often referred to as the ‘Valley of Death’ and is the last element needed for the funding continuum that starts with the current Demonstration Fund. Without HF 615, strong Iowa companies would continue to move out of state, not because their owners want to but because they need this type of capital,” said Karen Merrick, COO of the Iowa Innovation Corporation. “The Iowa Economic Development Authority will write the administrative rules for HF 615. Once that task is completed, Iowa will have another cost effective tool for helping ‘Grow Iowa’s Own’.”
The legislation, under the leadership of Senator Bill Dotzler (D) and Representative Mark Lofgren (R), establishes a means by which equity investors can secure state tax credits worth 25% of their equity investment in an Iowa company. The bill allows one-time only transferability of the credit and removes any waiting period to apply for the credit.
The Iowa Innovation Corporation and its partner, the Iowa Innovation Council, have been working for several years to bridge the funding gap that plagues small companies. As a state we have been very successful starting companies only to lose them when their capital needs rise to between $500,000 and $2,500,000. This capital gap can now be filled through the public/private partnership supported by this new legislation.
“The Iowa Innovation Corporation will work with the funds developed to take advantage of this credit, exploring new opportunities to fill the pipeline with fundable Iowa deals,” said Jack Harris, President and CEO of the Iowa Innovation Corporation.
Finally, all legislation with few exceptions takes collaboration among a multitude of people working together to support economic growth in Iowa. The Iowa Innovation Corporation thanks Governor Branstad and the Iowa Economic Development Authority along with other legislators and staffs including Senators Bill Dotzler, Joe Bolkcom, Matt McCoy and Charles Schneider; and Representatives Mark Lofgren, MaryAnn Hanusa, Roger Thomas, Matt Windschitl, Mary Gaskill, Kraig Paulsen, Steve Sodders and Doug Struyk, Chief of Staff for Speaker Paulsen. These individuals played instrumental roles in the developing the compromise needed to pass HF 615.
About the Iowa Innovation Corporation
The Iowa Innovation Corporation is Iowa’s “innovation intermediary.” The Iowa Innovation Corporation’s mission is to collaboratively align current and secure future resources to accelerate the growth of innovative businesses in our state. It is a long term vision of economic prosperity based on a commitment to “Grow Iowa’s Own.”
