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The Efactory announced last month its operations were in jeopardy after the Missouri Technology Corp., which supports the Efactory, was defunded through a state budget withholding. Do you have an update on that funding?
The governor’s office withheld the entire fiscal year 2020 appropriation for the Missouri Technology Corp., $2.91 million due to the coronavirus pandemic. The MTC board recently met and approved the fiscal year 2020 withhold repayment to the state, as well as approved an amended fiscal year 2020 budget. MTC is absorbing the loss to the fiscal year 2020 budget allocation and trying to limit the financial impact to the state’s entrepreneurs and small businesses. This allows innovation centers to keep funding received from Q1-Q3 of fiscal year 2020. As of now, our financial impact will be the Q4 fiscal year 2020 withhold, approximately $40,000. When the pandemic occurred, we started preparing for a potential fourth quarter withhold, which has happened in the past with other innovation center funding.
How would losing that funding impact Efactory operations and staff?
We are able to sustain the Q4 withhold, but also need support from MTC next fiscal year. Right now, the state legislature is talking through what a fiscal year 2021 budget will look like. Coming out of the (Missouri House of Representatives), MTC had a zero-dollar appropriation, but on (May 1), the Senate appropriation committee recommended $3 million to MTC, which is great. Sen. Lincoln Hough, for example, is vice chair of that committee. It really helps us to have strong southwest Missouri, Springfield leadership that understands what the Efactory/(Jordan Valley Innovation Center) do, as well as the other innovation centers and entrepreneurial support organizations throughout the state.
Cuts are happening across the board for the state’s fiscal 2021 budget. What is the argument for funding an innovation center?
Now is a really good example of why innovation centers are so helpful, and hopefully our community has been able to see the impact that we’ve been able to provide. The Efactory team, the Small Business Development Center team, they’ve really been all hands on deck helping clients, and just any company really in all of southwest Missouri, figure out the best method for disaster relief funding. March 15 through April 30, we have assisted more than 800 different businesses, we’ve held more than 250 virtual one-on-one consultations, and then we have spent more than 1,120 hours consulting with business owners, so all day, every day. We were, I think, one of the leaders in our community and throughout the state, even with how CoxHealth partnered with JVIC to develop (personal protective equipment) in a matter of two days. Without funding, we wouldn’t have equipment over at JVIC for something like that or even have the staff to be able to help do that. For our community to really recover strongly after COVID, I think it really comes down to what does innovation look like and how are small businesses able to recover.
What are the plans for this year’s accelerator cohort?
Typically we start our accelerator mid-May and that runs through mid-August for a few different reasons. Unfortunately with everything going on with COVID, our board decided that, with guidance from our board members and investors, we’re not going to be able to move forward with cohort five. One, it’s a pretty small room to try to host people in and follow social distancing guidelines. We just didn’t think that we’d be able to do that. And then also, in the past, some of the companies that have been selected are not necessarily local to Springfield. That would have required them moving here. I think that that’s a lot to ask somebody to do during a pandemic. We’re still trying to work through ways that we can get funding to startup companies and small businesses. Our core still is how do we help companies get started and grow.
How do you predict startup activity will change from this pandemic?
All of this shows the importance of innovation. You can’t necessarily just do something that’s always been done because that’s the way it is. You’ll still see investors making investments in business. We have during other disasters or other challenging times. Some investors may be more risk adverse and not invest in companies, others may view it as a time for growth. You look at companies like Zoom, all of a sudden it went from some people using it on a daily basis, but now everybody knows what Zoom is. That’s going to continue through other areas of businesses. Look at anything from online education to online meetings or what do events look like – are people going to necessarily travel as much as they used to? Business in general is going to change by necessity.
Rachel Anderson can be reached at email@example.com.
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