Gov. Branstad administration touts Demo Fund results

An effort to help start-up businesses survive and thrive started under the Culver administration got rave reviews Monday from Gov. Terry Branstad and his economic development helpers.

Results of a study on the economic and fiscal impact of the state's Demonstration Fund found the $8.7 million and technical assistance provided to 79 companies between 2007 and 2011 to encourage high-tech prototype and concept development activities created 600 new jobs and generated $2.1 million in new tax revenue.

Chris Nelson, president and CEO of Kemin Industries and board member of the Iowa Innovation Corp., which oversees the fund, said the return on the state's investment averaged about 24 percent.

“I'll take that any day,” Nelson told a Statehouse news conference discussing the study results.

He said $13 million was awarded to 110 companies since the fund was initiated, and 101 of those awardees are still in existence.

The Demonstration Fund supports commercialization activities by small and medium-sized Iowa companies in the advanced manufacturing, biosciences and information technology industries, state officials said.

The primary purpose of the fund is to help businesses with a high-growth potential reach a position in which they are able to attract later-stage private sector funding in hopes of achieving commercially viable products or services within a reasonable period of time.

Applicants must be able to demonstrate that the product is ready for commercialization and market entry.

“It is essential that we have tools in place to help Iowa's high-growth, innovation-based companies succeed in our state,” Branstad said. “The Demo Fund is one way we have to do that and, because of this report, we know quantifiably that the state is seeing a return on that investment.”

The report was authored by Econosult Solutions Inc. and was commissioned by the Iowa Innovation Corporation in partnership with the Iowa Economic Development Authority and the Iowa Innovation Council.

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