LANSING - A Request for Proposals was issued last week by the Michigan Economic Development Corp. on the first phase of a $396 million capital infusion into promising Michigan technology and life sciences companies called the 21st Century Jobs Fund.
The $396 million has been appropriated for investments through fiscal 2007 with some $100 million already earmarked for priority technology projects. The total state investment in the project through 2011 is expected to be $1 billion with another $1 billion plus expected in private investments.
The money will come as loans to start-ups and small businesses and as grants for universities and non profit research in the areas of life sciences, alternative energy, advanced automotive, manufacturing and materials and homeland security/defense.
The state issued the RFPs for the first round of awards on Jan. 27. Those awards are expected to be made by June 30. Then a second round of awards will be announced in July with checks expected to go out before the end of the year, Michigan Treasurer Jay Rising said in an interview with Mitechnews.Com Editor Mike Brennan.
“We could do $396 million in one year,’’ Rising said. “But the idea is to create jobs in Michigan and to use the money to fund Michigan projects.”
How many jobs? Rising said some federal studies show that up to 72,000 high paying tech jobs could be created in Michigan by the fund if it attracts a matching amount of private capital.
“We’ll have more than one competition this year on the commercial side,” he said. “We also hope to turn our $1 billion investment into $2 billion plus by getting matching funds from the private sector. Our investment will stimulate private investment in Michigan technology and technology companies.”
But there are no guarantees beyond the $396 million committed by the Michigan legislature for the next two years. The legislature still has to appropriate at least $75 million a year in the out years to make the state’s $1 billion funding goal.
Yet the $396 million guarantee does show the private equity finance community Michigan is serious about funding the key technologies that will rebuild the state’s economy, and diversify it away from such heavy dependence on the auto industry, Rising said.
“We want everyone to understand we have a purpose in the program,’’ Rising said. “We have funding available for years. That’s what we wanted from this proposal. We have to get authorization beyond the $396 million, but the $396 million will give us a big kick start. We want the investment community, which was so worried about whether they should go down this path with Michigan, to know we have provided them with financial stability.”
But Rising said the Strategic Economic Investment and Commercialization Board doesn’t want to get locked into a dollar figure to invest over the next two years and then find out there aren’t enough worthy projects to invest in so the money is wasted. So it’s possible the entire $396 million won’t be invested by 2008.
The fine print on the program follows:
Proposals will compete for funding within only one area of commercialization support services and may not be submitted in multiple areas. The following programs are not eligible for funding in any of the areas of commercialization support services: business plan competitions, the capitalization of venture capital funds or angel funds/networks, events, conferences, and symposiums.
Funding is available through a competitive proposal process in which all proposals submitted will be reviewed by independent peer review experts knowledgeable in the field of commercialization as well as the four competitive edge technology sectors. The review process will have two phases. Proposals will first be peer reviewed by mail. The highest ranked proposals will then be recommended to move on to a personal interview phase. The independent peer review results from both phases will be presented to the SEIC Board via a mail review results summary and proposal rankings from the interview phase indicating rankings of highly recommended, recommended, or not recommended for funding, with final recommendations given for proposals to be funded.
There are some important dates for anyone seeking investments from the 21st Century Job Fund to remember:
Due Date for Letters of Intent: Friday, February 17, 5 PM EST
Due Date for Letters of Financial Commitment: Friday, March 24, 5 PM EST
Due Date for Proposal Submission: Friday, March 24, 5 PM EST
The other important fact is all submissions must be sent electronically to the 21st Century Jobs Fund web site. For further information, click on medc.constellagroup.com/rfp.cfm