LANSING ? The Michigan Strategic Economic Investment and Commercialization Board on Wednesday approved the second round of the 21st Century Jobs Fund Commercialization Competition ? now dubbed a business plan competition ? award $30 million to Michigan technology companies that can create jobs. Michigan Economic Development Corp. CEO James Epolito, in an exclusive, outlined the details of the new competition.
Epolito said the second round will be a business-plan competition, with companies submitting plans up to 25-pages long. Each plan submitted must include a $500 entry fee. Finished plans must be submitted by June 4. Awards are expected to be announced Sept. 10.
?All through the first round, we kept track of what went well with the process and what needed improvement,? Epolito said. ?This year to streamline the process, we gave an opportunity for Michigan companies to be part of the independent peer-review process.?
A year ago, the SEIC board awarded $128 million to 78 companies. Epolito said two-thirds of those companies would have left Michigan if they had not received 21st Century Jobs Funding. Despite these results, the Michigan Legislature authorized just $30 million for the second round in 2008.
?I?m not disappointed that we only have $30 million,? Epolito said. ?We?re very thankful in this economy to have a second round of competition at all. I guess we made a good business case for the legislature.?
While a lot of round one funding went to universities to help commercialize basic research, round two will focus on investing in companies that create jobs, he said.
?The reasons for this approach is it has become very difficult for businesses to get loans from banks,? Epolito said. ?Banks have become real conservative from the losses they sustained on their bad-credit lending.?
The other wrinkle is in round two of the 21st century jobs competition, the board will be looking for sustainable companies that already have received some private-equity finance, he said.
?We would look at that aspect. A bank loan, Venture Michigan loan – the company would have had due diligence done to get that money. This will help us in making sure we?re investing in a sustainable company.?
Epolito declined to say how the money would be parceled out. Some industry sources speculated to MITechNews.Com that each investment would be from one-million to two-million dollars, in a quasi venture capital investment style. Epolito said the board wants to see what sorts of proposals are submitted to the peer-review process before deciding upon an investment strategy.
He also declined to say if part of the criteria will be investing in companies already generating hundreds of thousands of dollars in revenues. But he did say a healthy revenue stream would be a plus.
?Companies that can grow and create jobs often have six- or seven-figure revenue projections and that would aide them in the competition,? he said. ?But in the end, the SCIC board will decide. We?re not looking to do venture-level investments, just looking for the most viable companies out there that can create jobs for Michigan.?
For more information, click on TheMEDC.Org/21CBizPlan
a>>
