Here's what Gov. Wolf's budget proposal could mean for region's startups, entrepreneurs
By Nate Doughty - Reporter
February 08, 2022, 06:36pm EST Updated 15 hours ago
On Tuesday, Pennsylvania Gov. Tom Wolf unveiled his set of proposals for a $43.7 billion state budget, with some of the most notable among them being a call to lower the state's corporate net income tax as well as a pitch to increase Pennsylvania's $7.25 an hour minimum wage.
But the commonwealth's top executive also outlined a number of proposals that would bring millions of dollars in funding to the region's startup and entrepreneur ecosystem should the suggestions make it through the state legislature, which will debate and amend Wolf's budget as pitched over the next few months.
Among the highest dollar amount line items relating to entrepreneurship and startup funding, Wolf's budget calls for $10 million in competitive grants for the Ben Franklin Technology Development Authority (BFTDA) and $2 million in additional direct support for each of the four Ben Franklin Technology Partners (BFTP). BFTDA oversees the management and direct funding of the four BFTP organizations, which includes one of the region's largest early-stage investment groups — Innovation Works.
According to Rich Lunak, IW's president and CEO, Wolf's proposal to offer an additional $2 million each to the four BFTP groups, if passed, would represent a more than 57% increase in funding from the $3.5 million IW currently operates on each year. He said that amount of funding would allow IW to make significant investment-level support into the region's young, high-growth companies, among other possibilities.
"What's so critical about those dollars is they're one of those few sources of dollars we have that can be invested into startups to help them grow. Those dollars are really critical to what we do and it would help so many more startups in our in our region get off the ground," Lunak said. "Our dollars are so oversubscribed. In other words, there are so many more entrepreneurs coming to us for investment and support services and assistance than we can support, and this just gives us the capacity to help more entrepreneurs and so on."
As an example, Lunak said IW's accelerator programs will see hundreds of applicants per year for only a handful of slots. He said there are many worthwhile entrepreneurs who are launching notable companies that have had to be turned down by IW due to a lack of funding. An increase in funding the size that the governor is proposing would allow IW to take on a substantially increased number of startups that show a potential to scale and succeed.
Because of this, Lunak said he is excited and optimistic about this budget proposal being passed in the final bill.
"Usually support for small businesses and homegrown entrepreneurs is a bipartisan issue, and that's partly why the Ben Franklin program has been around since the early 1980s, it's because it's had strong bipartisan support across probably close to 10 different governors at this point, both Republican and Democrat, and that's because, it's universally recognized that every business starts small at one point and as the idea of an entrepreneur," Lunak said. "It's really the small, high-growth businesses that create virtually all of the new jobs in our economy across the United States."
The governor's budget proposals for startup-related capital funding weren't just limited to IW and its sister organizations, however.
Wolf's budget also called for a $5 million investment for innovative gene and immunotherapy research that aims to develop targeted cancer therapies, an effort that could position Pennsylvania as a global leader in this line of study. The proposal did not offer specifics on how this funding would be allocated but several Pittsburgh-area startups are focusing on immunotherapy research, including Oakland-based drug discovery firm Novasenta, which raised a $20 million seed round last year.
Wolf also called for $2.35 million in funding for the Invent Penn State program, an initiative from Penn State University that combines an entrepreneurship-focused curriculum with business startup training and development.