I was at a talk about the (Texas Emerging Technologies Fund) TETF program because since we are headquartered in Austin, Texas and many startups friends are looking for funding in Texas, I wanted to figure more ways to help our the companies we come across get funding.
So I wrote up this blog post to answer the following:
- What is TETF?
- Do I qualify for funding?
- How do I apply?
- Recent opportunities (2014)!
What is TETF?
About the Emerging Technology Fund
The Emerging Technology Fund (ETF) was created by the Texas Legislature in 2005 at the urging of Gov. Perry to provide Texas with an unparalleled advantage in the research, development, and commercialization of emerging technologies.
The goal of the ETF Commercialization Awards is to grow new small businesses and existing businesses to accelerate new products and services to the marketplace. Through these investments, the goal is to ensure a vibrant economy for Texas and a global leadership position. Commercialization awards provide selected, early-stage investments in new, technology-based, private entrepreneurial entities that collaborate with public or private institutions of higher education in Texas, and which, if successful, may provide significant economic benefit to the state.
Right now is the time to apply for funding from the Texas Emerging Technologies Fund. This fund was created when Texas allocated a large pot of money to be used to provide startup friendly loans to Texas technology companies and between now and July a large amount of money will likely be awarded to Texas companies.
Texas Emerging Technologies Fund subchapter D – Commercialization Award
This fund will disperse $75-$100 million between now and July or August to Texas companies. On average, companies each receive $2 million from the fund. The time between starting the application and getting the check is approximately four to nine months.
The process has two stages. First, applications are reviewed by the regional board and then if they are approved at that level they are forwarded to the state board. Estimates of funding probability for applications that pass the regional board are 60%-75% because the funding may be transferred to other pots of State money if the funds are not dispersed by the end of the State fiscal year.
Do I qualify for funding?
Here are the required characteristics for fundable proposals:
- Significant Texas institution collaboration
- Economic impact
- 85% of contractors and employees must be in Texas (exceptions apply)
- Texas must be the base of any manufacturing (exceptions apply)
- Venture must be demonstrated to have a market advantage such as protected and defensible technology (example: IP protection, patents, etc)
- Short business plans must be submitted with the application
- Ventures must demonstrate a high likelihood of acquiring additional funding
- Plan for good wages with larger than average Texas salaries
- If the company is based on improving technology it requires outside review
- Companies must be C-corps
- This is a state-backed fund that matches private investors with very entrepreneur-friendly investment terms.
- If you fall under the criteria for the funding, your firm will compete with fewer companies than in private venture funding
- More red tape
- Must develop an affiliation with a state government agency (including a university like UT, NASA, a State program, etc)
Examples of collaboration with Texas state agencies and institutes:
- Licensing technology
- Sponsorship contracted for engineering or other services
- Incubation service
- Collaborations with Texas Universities should yield <5% of benefits for the University
How do I apply?
If you think your company might be eligible to compete for this money, you should contact the Texas Emerging Technologies fund support staff. They have trained, dedicated staff to help you prepare your application and can help you verify that you are eligible. Contact them at: http://governor.state.tx.us/ecodev/etf/etf_contact/
If you are in Houston, there is an information session February 12th :