§ 16-U — Innovate NY fund

New York § 16-U

• Jurisdiction: New York
• Law UDA: Urban Development Corporation Act 174/68

Text

§ 16-u. Innovate NY fund. 1. The Innovate NY fund is hereby created.\nThe purpose of the Innovate NY fund is to make available state funds to\neligible applicants to support emerging business ideas and products that\nresult in the growth of business within the state and the concomitant\ncreation of jobs and tax revenues for the state.\n 2. Eligible applicants for Innovate NY funds may include regional and\nlocal economic development organizations, technology development\norganizations, research universities, and investment funds that provide\nseed-stage investments in New York state companies.\n 3. Funding from the Innovate NY fund may be made available to the\napplicant for investment in beneficiary companies. In order to be\neligible for an investment that includes Innovate NY investment funds, a\nbeneficiary company must: (a) be, or agree in writing to be, located in\nNew York state; (b) be in the seed-stage of development, as defined by\nthe corporation; (c) demonstrate a potential for substantial growth and\njob development in an emerging technology field, as defined in section\nthirty-one hundred two-e of the public authorities law or in regulations\nas adopted by the corporation; and (d) have the potential to generate\nadditional economic activity in New York state. Investment priority\nshall be given to beneficiary companies involved in commercialization of\nresearch and development or high technology manufacturing.\n 4. The corporation shall establish a competitive process for the\nevaluation of applicants for the Innovate NY investment fund. Applicants\nshall be evaluated on criteria including, but not limited to, the\napplicant's: (a) track record of success in raising investment funds and\nsuccessfully investing them; (b) capacity to perform due diligence and\nto provide management expertise and other value-added services to\nbeneficiary companies; (c) financial resources for identifying and\ninvesting in seed-stage companies; (d) ability to secure non-state\nmatching program investment funds at a ratio that is equal to or greater\nthan one to one (1:1); (e) ability to evaluate the commercial potential\nof emerging technologies; (f) ability to secure partnerships with local\nor regional investors; (g) adoption of conflict of interest provisions\nacceptable to the corporation; and (h) other criteria that the\ncorporation determines is relevant to making investment decisions\nconsistent with the purposes of the fund as set forth in subdivision one\nof this section. When awarding funds pursuant to this subdivision, the\ncorporation shall assure that the applicants demonstrate the need for\nseed capital in the areas served by the applicant and provide for\nadequate geographic distribution of awards to beneficiary companies\nthroughout the state to the extent feasible. The corporation shall\ndistribute funds promptly pursuant to a disbursement process agreed to\nbetween the corporation and applicant to enable the applicant to fulfill\ncommitments to beneficiary companies in a timely manner.\n 5. At the time the applicant has invested fifty percent of the\nInnovate NY funds committed to such applicant and annually thereafter,\naggregate investments of Innovate NY funds by such applicant in\nbeneficiary companies shall be leveraged with private sources of capital\nexcluding investments after the initial funding round at a ratio equal\nto or greater than two to one (2:1).\n 6. The Innovate NY fund shall not invest an amount in any single\nbeneficiary company that exceeds five hundred thousand dollars, or seven\nhundred fifty thousand dollars in the case of any individual\nbiotechnology-related beneficiary, at any one time, subject to certain\nexceptions to be established by rules and regulations of the\ncorporation.\n 7. Notwithstanding any provision of law to the contrary, the\ncorporation may establish a program fund for program use and pay into\nsuch fund any eligible funds available to the corporation from any\nsource, including moneys appropriated by the state.\n 8. The corporation shall submit a report annually on December\nthirty-first to the director of the budget, the temporary president of\nthe senate, the speaker of the assembly, the minority leader of the\nsenate and the minority leader of the assembly detailing (a) the total\namount of funds committed to each applicant that receives funds and the\namount of such funds that has been invested by each such applicant; (b)\nthe amount of Innovate NY and private funds invested in each beneficiary\ncompany; (c) the type of product or technology being developed or\nproduced by each beneficiary company; (d) the location of each\nbeneficiary company; (e) the number of jobs projected to be created or\nretained; and (f) such other information as the corporation deems\nnecessary.\n 9. The corporation is hereby authorized to promulgate rules and\nregulations in accordance with the state administrative procedure act as\nare necessary to fulfill the purposes of this section, including with\nrespect to reasonable management fees, promotes, share of return and\nother fees and charges of applicants that receive funds, and to provide\nfor the repayment of funds received by the beneficiary company if the\nbeneficiary company leaves New York state within a period of time to be\nestablished by the corporation.\n 10. In accordance with the rules and regulations to be promulgated by\nthe corporation, the corporation may impose fees, establish repayment\nterms and provide for equity participation by the corporation in\nconnection with investments from the Innovate NY fund.\n 11. The provisions of section ten and subdivision two of section\nsixteen of this act shall not apply to assistance provided under this\nsection.\n