News: NYS Governor Kathy Hochul Announces Launch of $30 Million Pre-seed and Seed Matching Fund Program

Sarah Rothenberg
13 Jan 2023

Read the full press release on State of New York’s Empire State Development website.

Good news for New York founders and startups building in New York State! New York State Small Business Credit Initiative (SSBCI) and it’s venture capital management firm, NY Ventures is providing support and capital of $30 million for it’s Pre-seed and Seed Matching Fund Program to help early stage startups who are registered in New York. The program will offer early-stage businesses growth assistance starting from $50,000 and up to $250,000 for every matching dollar investment from a private sector investor (there must be at least $1 of private sector investment for every $1 NY Ventures invests). The program is also aiming to support small businesses, especially those owned by socially and economically disadvantaged individuals and very small businesses which traditionally do not receive sufficient access to capital or support.

“For early-stage startup companies, access to capital is critical to ensuring the vitality of those businesses and sustaining them in the long term,” Governor Hochul said. “The Pre-Seed and Seed Matching Fund Program will help these businesses gain their footing and create the jobs of the future while expanding access to funding in traditionally underserved communities. I thank our federal partners for helping to secure this funding and extending a lifeline to New York’s small business ecosystem.”

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Investment Eligibility is as follows:
– Pre-Seed or Seed-stage companies across all technology markets, with a focus on (Advanced Manufacturing, Agricultural Tech, Climate Tech, Consumer Products, Data/SaaS/AI, Fintech, Healthcare, Life Sciences & BioTech, Medical Devices)
– Company has raised $2M or less of dilutive funding to date
– Focus on expanding access to venture capital across New York State, particularly for underserved geographies and historically marginalized individuals and companies
– Preference for companies structured as a C-Corporation to align with investment yield and growth potential objectives
– Company agrees to create economic impact in NYS by having its headquarters and at least one C-suite employee in NYS
– Company must be registered to do business in New York and in good standing.
– Company must raise matching funds from qualified private sector investors; investors who provide private sector match can be part of an investment entity (venture capital fund, angel fund, family office, investment partnership, or LLC), an individual member of an organized investment group who is an accredited investor and qualified purchaser, or an individual that can otherwise establish credibility as an accredited investor.
– Private capital raised within the same funding round as the SSBCI funding may be counted toward the 1:1 financing ratio if a term sheet or similar agreement specifies the inclusion of SSBCI capital and private financing transaction occurs no earlier than 90 days before the SSBCI investment.
– Investment can be in form of convertible debt, SAFE or equity financing.

To read the whole details and how to apply, visit the State of New York Empire State Development site.

There’s a lot to think about when you’re starting your company. Don’t forget, Gust is here to help founders across every stage of the journey from Prepare to Scale.
– Digest key terms in the Gust Start-up Glossary
– Dive down a rabbit hole of knowledge in our Gust Blog
– Explore frequently asked questions in our Gust Launch FAQ

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This article is intended for informational purposes only, and doesn't constitute tax, accounting, or legal advice. Everyone's situation is different! For advice in light of your unique circumstances, consult a tax advisor, accountant, or lawyer.