Feds to Release Millions for Small Business Investment in Vermont | News | Seven Days | Vermont's Independent Voice

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Feds to Release Millions for Small Business Investment in Vermont


Published July 19, 2022 at 11:06 p.m.

A worker at Colchester startup Vernal Biosciences - COURTESY VERNAL BIOSCIENCES
  • Courtesy Vernal Biosciences
  • A worker at Colchester startup Vernal Biosciences
The Vermont Center for Emerging Technologies in Burlington and the Center on Rural Innovation in Hartland will receive an infusion of federal pandemic relief money to help entrepreneurs take action on their business ideas.

The money is part of a nearly $58 million that was allocated to Vermont this month by the U.S. Department of the Treasury in a bid to make access to startup capital more democratic and to help small businesses create jobs.

Nearly $29 million of that will go to  business accelerator programs that invest in rural, very early-stage companies, and to investments in high-growth innovative companies in the health care sector, Gov. Phil Scott’s office said in a prepared statement.

“This is really good timing,” said Economic Development Commissioner Joan Goldstein. “2022 has not been kind to the financial markets. There are a lot of ideas out there, and this money from the Treasury will help kick-start the companies.”

The Vermont Economic Development Authority will get another $29 million for a low-interest loan program that will leverage private funds to help early-stage businesses.

Investment in Vermont companies has been growing rapidly in recent years. In April, FreshTracks Capital reported that investment had soared nearly 500 percent over the preceding year, mostly due to big capital infusions at the electric aviation company Beta Technologies and at Williston-based Polly.
Entrepreneurship seems to be on the rise as well, said Sam Roach-Gerber, vice president at VCET, a coworking space that offers mentoring and has its own investment resource, the Vermont Seed Capital Fund. CORI is a nonprofit organization with a capital fund, the CORI Innovation Fund, that invests in early-stage technology companies in rural areas.

Nationally, small business development took off during the pandemic. In Vermont, “there has definitely been a jump in people starting companies,” Roach-Gerber said. VCET’s Vermont Startup Collective, an online community started in 2020 to help local entrepreneurs, has grown to membership of 1,000 without advertising, she said.

“A lot of people moving to Vermont are bringing companies with them,” she said. “They are entrepreneurs looking for resources to help scale in the state.”

The local investment community, too, is active, with at least one new investment resource for mid-stage companies, the Dudley Fund, starting this year, and recent growth at more established funders like FreshTracks and Hula.

The $58 million Scott’s office announced Monday is part of $10 billion that is being distributed to states through the U.S. Treasury Department. The money won't land in the hands of entrepreneurs anytime soon; Hilary DelRoss, communications director at the Vermont Department of Economic Development, said Scott's office will release more information about the program in coming months.

VCET — which has partnerships with coworking spaces in other parts of Vermont — also expects to get an additional $9 million this year from the fiscal 2022 Omnibus Appropriations Bill, which Roach-Gerber credits to the work of Sen. Patrick Leahy (D-Vt.).

Companies that show growth potential will likely draw the attention of the investment groups, Goldstein said of the U.S. Treasury program.

“They’re looking for scale; they’re looking for a business model that will create livelihoods for other people.”

If one of those companies expands and is sold, the original investment will be returned to the venture capital fund to be used again, Goldstein said. She expects the program to shed some light on the entrepreneurship underway around the state.

“When you have buckets of money to do this type of work, you learn about all the inventions in the hills,” she said. “Without this, they’re not necessarily going to call the state.”