The publicly funded nonprofit is one of the few reliable sources of money for entrepreneurs and innovators in Maine, but companies have criticized its application process for being cumbersome and inefficient. Now, after a year of review, MTI is trying a new approach.
Instead of using a rigid schedule for companies to apply for specific grant and loan programs, applicants will be screened by MTI staff on a rolling basis and offered funding based on their needs.
“The object here is to make it more friendly for applicants, less burdensome and less complicated,” said Alexander “Sandy” Spaulding, chairman of the MTI board of directors and managing director for business development at Hodgdon Yachts in Boothbay. “We are not changing what we are putting money into. We are just trying to get it to move faster and easier.”
Since MTI was established almost 20 years ago, it has invested almost $230 million in more than 2,000 projects across the state.
In the past year alone, more than $53 million was awarded to dozens of companies to support business expansion, new product development and workforce training. High-profile employers like The Jackson Laboratory, Hussey Seating, Vets First Choice and Verso paper company were some of the biggest recipients.
Most of the money came from a $45 million research-and-development bond that voters passed last year to replenish the Maine Technology Asset Fund.
That money is now spent and MTI will be back to more modest allocations. The institute receives about $6.7 million a year in a state appropriation, only 10 percent of which can be spent on administration. About $8.5 million is budgeted for investment this fiscal year, said Brian Whitney, MTI president.
Companies have long been frustrated and confused by the complicated regulatory patchwork and deadlines, said Whitney, who applauds the changes. Previously, an entrepreneur had to apply to one of seven specific programs, each with different standards, deadlines and award caps.
“When someone came in seeking funding, we were trying to figure out how to shoehorn them into one of these little buckets,” Whitney said. “Almost all the programs had funding deadlines, with three proposal solicitations a year. If you missed a deadline, you were out of luck for four months. Obviously, that’s not very nimble for entrepreneurs and small businesses that need to move fast.”
Now when a company or entrepreneur asks for funding, it fills out an online intake form describing the business and request, then works with an MTI staff adviser to complete a “venture investment readiness and awareness level” assessment. That test will gauge what kind of investment or support is warranted depending on the company’s needs, Whitney said.
An entrepreneur who wants to strengthen a business plan might receive a $5,000 grant, whereas a mature company ready to launch a new line of products might receive $25,000 or more.
“Now everything is going to be tailored to what the entrepreneur and business need,” Whitney said. “I think it is a seismic shift in approach to funding innovation in Maine.”
Financing isn’t handed out to just any company. The nonprofit can only offer funding to Maine-based companies and requires a one-to-one financial match. Companies have to be involved in seven precise sectors: aquaculture and marine technology, biotechnology, composites and advanced materials, environmental technologies, forest products and agriculture, information technology, and precision manufacturing.
Despite stipulations, MTI remains one of the only consistent sources of venture capital for small and medium-sized innovation companies.
A financing system that gives any company or entrepreneur an in – referred to as a “no wrong door” approach, will be a welcome change, said Yellow Light Breen, president of the Maine Development Foundation.
“It has the promise of helping a much wider range of folks that may have fantastic innovation, but may lack the way to interpret all the grant outlines,” he said.
That could help boost Maine’s spending on research and development. The state’s spending is about one-thirteenth of the average national spending on research and development and one-fifth of what other New England states spend, Breen said.
“Anything MTI can do to be a better spark plug for innovation in Maine is going to be important moving forward,” he said.
©2018 the Kennebec Journal (Augusta, Maine) Distributed by Tribune Content Agency, LLC.
