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  • August 14, 2019 5:28 PM | Anonymous

    Indiana Technology & Innovation Association officials visited Fort Wayne late last month for an Aptera-hosted event explaining the organization’s mission and how the region’s tech community can help shape public policy.

    Hundreds of industries have organizations at the Statehouse representing their interests, but until ITIA was formed in Indianapolis last year, the technology industry did not have one, Jennifer Hallowell, ITIA manager, said during the visit.

    Techpoint works on the development of Indiana’s tech ecosystem, helping it build community and attract talent and resources, but it doesn’t get into government advocacy and lobbying. Instead, it supports ITIA efforts along those lines, she said. Mike Langellier, Techpoint’s president and CEO, serves on ITIA’s board.

    To maximize ITIA’s impact, “it’s really important to have voices from all over the state of Indiana — not just central Indiana — advising, guiding, shepherding, changing, fixing, educating our legislators on what we need in all parts of our state,” said John McDonald, Clear Object CEO and ITIA board member.

    “The people who make those policies, the state legislators, need to hear from them about what’s important to them. And, if they’re not there, their voices have not been heard,” he said.

    The regional tech community’s involvement with ITIA also is important as a means of keeping up with new resources and opportunities that become available through the organization’s advocacy for the technology industry, McDonald said.

    Discussion at the event included a review of programs “that are available through the state to assist technology companies and unfortunately, very few people that were here tonight knew about them, let alone knew that they were for them,” he said shortly after the event.

    A 2019 legislative recap the organization presented boasted ITIA helped secure $3 million per year in state funding for the Next Level Computer Science Program, which will make sure every school in Indiana is offering computer science education by 2021.

    It also helped restore $30 million per year in state funding for the 21st Century Research and Technology Fund, which supports tech-related entrepreneurship and research as well as academic technology transfer.

    “There were a couple of different times during the legislative session that some of those funding mechanisms were challenged. So, when the Senate version of the budget came out, there were cuts in computer science education for schools and cuts in the 21 Fund,” Hallowell said.

    “Our members mobilized and worked to get the funding levels restored to what they originally were,” she said.

    ITIA also advocated successfully for legislation that made venture capital investment tax credits transferable to third parties, which was designed to help Indiana attract more out-of-state venture capital investment.

    Other legislation and initiatives receiving ITIA support included those providing tax incentives for data centers, Gov. Eric Holcomb’s $100 million rural broadband initiative and a bias crimes law allowing judges to increase criminal penalties for hate crimes.

    ITIA also supported the governor’s initiative to double funding for Next Level Employer Training Grants and Workforce Ready Grants designed to upskill Indiana workers in high-wage, high-demand fields.

    https://www.fwbusiness.com/fwbusiness/article_7d7240f8-a386-5529-b6cf-0acbeeaa1804.html

  • July 29, 2019 5:30 PM | Anonymous

    Fort Wayne technology leaders and entrepreneurs will gather at a downtown business Tuesday evening for a “call-out” meeting that could influence policy talk among Indiana lawmakers.

    The Indiana Technology & Innovation Association (ITIA) will meet from 5 to 6:30 p.m. at Aptera, 113 W. Berry St., according to a Monday media advisory.

    The association officially launched in November 2018, representing an industry it says is Indiana’s fastest-growing sector. The association has recruited about 115 technology company members across the state.

    “Leaders involved in the Fort Wayne technology scene will meet to discuss ways they can get involved and shape Indiana’s tech policy at the Statehouse,” the advisory said.

    The association’s policy priorities include better preparing the workforce for technology jobs, increasing access to venture capital and attracting tech talent to Indiana.

    http://www.journalgazette.net/article/20190729/WEB/190729877
  • June 12, 2019 2:52 PM | Anonymous

    Indiana startups might soon have an easier time attracting out-of-state investments thanks to a change lawmakers made this year to an instrumental tax incentive program.

    The state has offered the venture capital investment tax credit since late 2003 as a way to make investing in startups a little less risky, but it really only benefited Indiana residents because it applied to an individual’s state tax liability. That meant investors who didn’t pay Indiana taxes were left out.

    Senate Bill 563, authored by Republican Sen. Travis Holdman and signed by Gov. Eric Holcomb, changed that. Starting in 2020, investors will be allowed to transfer the tax credit, which means out-of-state investors can essentially sell the credit to someone in state who can take advantage of it.

    Leaders in the tech community say that is a big win for their industry, because it will help motivate out-of-state individuals—who regularly ask about the tax credit—to invest in Indiana startups.

    “It’s certainly not the only driver when making the decision about whether to invest in a company,” said entrepreneur Mike Simmons, who is now executive chairman and president of Sharpen Technologies. “But it certainly makes it a much easier decision.”

    The change could also have a ripple effect for regular in-state investors. If startups’ pool of potential investors grows, local investors might hear fewer pitches.

    “There are 15-20 people that probably get hit on pretty regularly for investment,” Simmons said. “The more we can broaden that out, it’s definitely better for the community.”

    The VCI tax credit program allows someone who invests in an early-stage Indiana company to claim a tax credit worth 20% of the investment. The credit is capped at $1 million.

    An individual who invests $500,000 in an eligible startup, for example, can receive a $100,000 cut in the income taxes he or she owes the state.

    Eligible startups have to register with the Indiana Economic Development Corp. and set a venture capital fundraising goal. Investors then can receive the 20% credit until the company hits that goal, which is capped at $5 million.

    In the program’s first 15 years, 778 startups have been certified to use it, but only 39 have reached the $5 million cap.

    In 2018, more than 100 companies used the VCI tax credit program, and investors committed nearly $60 million to qualified startups.

    Scott McCorkle, who used the credit as part of his strategy to attract investors to his software-as-a-service firm MetaCX Inc., said the program definitely helps.

    “It makes for more aggressive investments, so a higher level of funding,” McCorkle said.

    Investors have five years from making the financial commitment to claim the tax credit.

    The IEDC is limited to awarding $12.5 million in tax credits every year—but the total credits have never reached the cap.

    From 2014-2018, the approved credits totaled upward of $10 million, nearing the cap. Before that, totals were $6 million to $8.5 million annually.

    “Only in the last few years has that [cap] become a concern,” IEDC President Elaine Bedel said.

    Mike Langellier, president and CEO of TechPoint, said the credit has been “a really important instrument in the startup finance ecosystem” because it can be difficult to convince investors to take a risk on an idea or new company.

    The companies involved in the program are typically in their first round of funding, and investments could take a long time to materialize. The credit essentially makes the investment 20% less of a risk.

    “What’s so great about it is, it provides virtually an immediate return on investment,” Simmons said.

    It’s not clear how much money Indiana startups have missed out on because the tax credit wasn’t transferable, but tech leaders say they know dollars have gone elsewhere.

    “It’s real. I absolutely see it,” Langellier said. Investors “have tons of options to prospectively invest in. A big part of that decision is the risk/reward trade-off.”

    Simmons said allowing the credit to be transferable will “definitely broaden the investor base.”

    Now, Hoosier startups might have an easier time targeting wealthy individuals in bigger markets like Chicago, Louisville, Seattle, San Francisco and Boston, for example.

    Some states, like Kentucky, already allow the VCI tax credit to be transferred to another individual. But the move by lawmakers this year does give Indiana a leg up over Illinois, Michigan and Ohio, where the credit is not transferable.

    “It just gives us a bigger platform to tell the story of all the great things that are happening in the state of Indiana startup scene,” said Scott Dorsey, tech entrepreneur and investor who helped found venture studio High Alpha.

    The IEDC is still working out the details of just how the transfers—or most likely sales—of tax credits will work. The state will not be involved in determining how much an in-state investor will pay to buy a tax credit from an out-of-state investor, but the parties will have to notify the IEDC.

    Bedel said the price might depend on whether the buyer could immediately claim the tax credit or would be saving it for a year in which he or she has a high enough tax burden to apply it.

    “I see it as a real win-win for the state of Indiana,” Bedel said. “We’re just bringing more money in to help start these small businesses in Indiana.”

    Langellier said he thinks there is a large pool of potential investors among out-of-state alumni of Indiana’s colleges and universities since they already have a connection to the state.

    John Hanak, managing director of Purdue Ventures, said its donor network is predominantly alumni, so the impact from the change could be huge.

    “There’s definitely been a market need for this to happen,” Hanak said. “It’s just another in a number of growing factors for investors to look at Indiana.”

    Langellier also said the tool could convince startups to locate in Indiana, because access to capital is typically a top consideration for entrepreneurs.

    But the measure’s significance, he added, will depend on key details like how easy the process is to use the credit and how well the startup community markets it.

    “We shouldn’t see it as a ‘build it and they will come’ kind of strategy,” Langellier said. “It’s not going to happen to be successful on its own.”

    One unchanged aspect of the program is the cap on how much the IEDC can award each year. That will stay at $12.5 million, but tech community leaders are likely to push the state to increase it if the credits start reaching that level.

    Bedel said hitting the maximum would be a good thing.

    “That would mean we have more money coming in from outside the state,” she said.•

    ... Read more

  • June 12, 2019 2:49 PM | Anonymous

    To hear state officials, site-selection experts and local tech execs tell it, a new tax break has made Indiana an instant player in the national data-center scene.

    State lawmakers last month passed a much-ballyhooed law that exempts sales taxes on equipment, infrastructure and electricity costs for sizable data centers constructed in Indiana.

    Those tax breaks could amount to $1.75 million to $10.5 million in savings for each Indiana-domiciled data center that qualifies. While a portion of the incentives—namely the forgiveness of sales taxes on electricity—would come over a number of years, facility operators would see much of their savings at the front end of a project.

    Some of the law’s provisions take effect July 1, though others are retroactive to Jan. 1.

    “Indiana was not in the game before this legislation,” said Larry Gigerich, executive managing director at Ginovus, a locally based site-selection firm that works with clients across the United States and Canada. “It is now.”

    According to the National Conference of State Legislatures, Indiana joins at least 25 states with similar incentives for data centers, which house computer systems, servers and digital storage.

    Indiana is “not playing catch-up anymore,” said Tom Dakich, a local attorney and partner in a massive data center project under construction in Hammond. “In no way is Indiana less than a top-five site in the country for data centers after the passage of this legislation.”

    Indiana is already attractive—tech experts and officials for the Indiana Economic Development Corp. say—due to its proximity to underserved areas of Chicago and Louisville as well as a pent-up demand to have the facilities in central Indiana. In addition, the state is known to have relatively low electricity and water rates, key needs in running a large power-intensive data center.

    The tax-incentive bill garnered wide bipartisan support, clearing the House 95-1 and the Senate 46-0. Gov. Eric Holcomb, fast becoming a darling among local tech companies, eagerly supported the bill and signed it into law.

    “Data centers can be billion-dollar projects that greatly enhance the economies of the cities and states they locate in through the creation of jobs and strong investments in the community,” said Rep. Ed Soliday, R-Valparaiso, who authored the bill. “In order to encourage development of this caliber in Indiana, we have to make ourselves competitive and give these companies a reason to choose us over another state.”

    But the impact of the bill is somewhat unclear—partly because the future need for goliath data centers is uncertain, tech experts told IBJ, and partly because the state’s prize will be difficult to quantify since data center operations, and locations, in many instances are cloaked in mystery.

    There’s good reason for some secrecy, according to data center operators. Most centers contain data and servers that are vital to the operations of transportation, finance, health care and other crucial sectors. Some data centers contain large caches of classified digital information.

    “Many data centers are thought to be significant targets for terrorists,” one local data center operator told IBJ. “Crippling the country’s data centers could be catastrophic.”

    In the chase

    So counting the data centers in Indiana is a tall task. Most familiar with the local industry say the state has a handful, although none are the size of those run and occupied by giants such as Google, Amazon, Microsoft and Facebook, which sometimes occupy more than 500,000 square feet and cost $500 million to $1 billion.

    Locally based Lifeline Data Centers runs two local data centers, including an 80,000-square-foot center at the former Eastgate Mall. A number of smaller centers are near Lucas Oil Stadium; and Hammond, Fort Wayne and South Bend each have one.

    “Our data center inventory is not very robust right now,” said Dakich, whose company, Digital Crossroads of America, plans to open a 100,000-square-foot data center by Nov. 1. “I would not be surprised if we didn’t quadruple our present capacity within five years.”

    It’s been just a few weeks since lawmakers approved the data center tax breaks, yet already the Indiana Economic Development Corp. has had multiple “official and unofficial inquires,” said David Roberts, IEDC’s chief innovation officer.

    “I would be surprised if we don’t see at least one $500 million-plus project within the first year,” he said.

    The lack of tax incentives until now has put Indiana behind in the chase for data centers, especially the much-coveted mega centers being built in strategic locations across the country—including in some neighboring states.

    Iowa and Ohio have become leaders in luring data centers. Both already offer sizable tax breaks and have low electricity costs. Iowa, Des Moines in particular, has become a data center powerhouse, with most or all of the nation’s largest tech companies building operations there over the last decade.

    Other data center hot spots are in parts of Idaho, Arizona, Nevada, Oregon, Texas and Washington state. Data center operators are keen on regions not prone to natural disasters such as hurricanes, earthquakes and blizzards. That, Gigerich said, knocks out many locations on the East and West coasts.

    A look inside

    So what exactly is a data center and what is pushing the growth?

    In some respects, data centers are nothing more than massive warehouses full of digital storage with precise environmental controls—state-of-the-art heating and air conditioning systems are essential—and a high level of security. Many are gated, some are bomb-proof, and all are guarded 24/7.

    “Data centers are weird animals,” said Alex Carroll, co-founder of Lifeline Data Centers. “On one hand, it’s a real complex world. On the other hand, it’s just about keeping the electricity on and the computers up and running.”

    Dakich said once his Hammond project is completed, he and his partners will rarely set foot inside the facility, explaining that operations are best left to companies that rent space in the facilities and technical experts.

    Data centers are generally filled with rows and rows of servers and other computer hardware that enables internet connectivity, streaming and other functions of cloud computing.

    Carroll explained his data center infrastructure in plumbing parlance.

    “If you think of the interconnectivity that connects all computers to the internet and the cloud, you could think of the pipes in residences or even many businesses as being a few inches” in diameter, he said. “You can drive a truck through the pipes of a commercial data center like ours.”

    At its two central Indiana data centers, Carroll’s company has 20 generators, about 100 HVAC blowers and 15 uninterrupted power-supply devices.

    “If you’re not already in the data center business, you’re probably not going to get into the data center business,” Carroll said. “It is extremely capital-intensive to launch a data center.”

    The growth in data centers over the last five to 10 years has been pushed by the explosion of ever-more-advanced mobile data devices, increased demand for cloud computing, and the swift growth of the internet of things—which is essentially devices connected to the internet, anything from household appliances and lawn mowers to HVAC systems and traffic lights.

    Data centers vary widely with respect to occupancy. Many boast multiple occupancy, like the ones run by Dakich and Carroll, in which several companies share the space. Dakich hopes to have seven or so occupants at his Hammond center, maybe a few more when it expands to its full size of 400,000 square feet.

    Lifeline Data Centers at Eastgate has about 150 occupants, Carroll said.

    ... Read more

  • May 09, 2019 2:54 PM | Anonymous
    INDIANAPOLIS - Some of the biggest names and businesses in Indiana's tech sector are coming together to launch an organization to advocate for the industry with state leaders. The Indiana Technology & Innovation Association says it will push for policies to ensure the state has a strong infrastructure for tech companies to start, enough capital for them to grow and enough talent for them to sustain and scale. 

    http://www.insideindianabusiness.com/Clip/14693797/group-to-bring-tech-voice-to-statehouse#.W_iwZAbrT6E.twitter

  • March 06, 2019 2:43 PM | Anonymous

    Indiana tech industry leaders say the lack of a comprehensive hate crimes law is a barrier to attracting talent.

    Those leaders say they’re ready to engage with lawmakers to advance the issue.

    Many in the business community want a hate crimes bill with a list of victim characteristics. And they were upset when Senate Republicans eliminated that list earlier this session. Clear Software CEO Jon Gilman says if House lawmakers don’t add it back in, they’ll give Indiana a “black eye.”

    “Just simply reaffirms the reputation of Indiana as being socially regressive and essentially not inclusive,” Gilman says.

    ClearObject CEO John McDonald is on the board of the Indiana Technology and Innovation Association. He says he wants tech companies to dispel the myth that Hoosiers don’t care about the hate crimes debate.

    “Get engaged with their local legislators and help them understand the importance of this issue, not on a sort of a wide scale but specifically, in that district, to those companies,” McDonald says.

    House GOP leaders are not supportive of a hate crimes law with a list of victim characteristics, though Gov. Eric Holcomb has advocated for one.

    https://indianapublicmedia.org/news/tech-leaders-lack-of-hate-crimes-law-black-eye-for-indiana.php

  • March 06, 2019 2:39 PM | Anonymous

    INDIANAPOLIS, Ind - Several CEOs from Indiana technology companies are calling for Indiana lawmakers to pass a hate crimes bill that specifically lists protected groups, comparing the discussion to the Religious Freedom Restoration Act controversy of 2015.

    Members of the Indiana Technology & Innovation Association held a Wednesday news conference in the Statehouse atrium and argued that Indiana’s lack of a hate crime law is hurting their efforts to recruit talent from out of state.

    “Technology is Indiana’s fastest growing sector, but we are in a death match for talent with other places and other states,” said John McDonald, CEO of Fishers-based ClearObject. “There are not enough skilled workers to fill the jobs that we’re creating every day. And so we can’t afford to have anything be a barrier to that talent and recruitment.”

    “Passing a watered down unenforceable bias crimes law just simply reaffirms the reputation of Indiana as being socially regressive and essentially not inclusive,” said John Gilman, CEO of Zionsville-based Clear Software. “It really makes it difficult to run a technology company when we have this reputation because talent is our number one need.”

    Last month, the Indiana Senate passed a biased crimes bill that allows a judge to consider bias as an aggravating factor when sentencing a person convicted of a crime. The bill did not include a list of specific characteristics such as race, religion, sexual orientation or gender identity. Critics called the removal of the specific list a watering down of the legislation. Senate Bill 12 was passed to the House and assigned to the committee on Courts and Criminal Code.

    Members of the coalition said passing a bias crimes bill without the specific list would do nothing to improve Indiana’s reputation on social issues.

    “I’m worried that if we don’t do this, we will have another RFRA on our hands,” said Anderson Schoenrock, CEO of Indianapolis-based Memory Ventures. “But this time it could be worse because it will be a second black eye on the state.”

    Schoenrock said when he moved his business from California to Indiana, his company’s COO refused to make the move because of the Religious Freedom Restoration Act debate.

    Avon Republican Representative Greg Steuerwald, who authored the House version of the bias crimes bill and signed on as co-sponsor for SB 12, says the comparison to the 2015 debate is off base.

    “No, that’s not a fair comparison at all,” Steuerwald said. “What we’re trying to deal with here is making sure that every form of hate is covered, and that’s exactly what we intend to do.”

    Steuerwald says the language in his bill, House Bill 1093, allows a judge to consider all types of hate without excluding any particular groups. The bill states a judge can consider bias as an aggravating circumstance if a person commits a crime “because of the individual's or the group's real or perceived characteristic, trait, belief, practice, association, or other attribute the court chooses to consider.”

    “Worked very hard to make sure no form of hate is excluded,” Steuerwald said. “The judge is empowered to consider every form of bias under House Bill 1093.”

    The comments come as Governor Eric Holcomb is traveling Europe in an effort to bring new business back to Indiana. Last week, the Governor said the Senate version of the bill would not be enough to get Indiana off the list of five states that do not have their own bias crimes law. The Governor said he wants lawmakers to pass a bill that includes specific list of specific groups. He suggested using language taken from federal hate crimes law and inserting it into Indiana law.

    “And I say that coming from A, it’s the right thing to do,” Holcomb said February 27. “And B, it does, in terms of our business community, matter.”

    Members of the ITIA say they appreciate Holcomb’s efforts, but they don’t believe the federal language would be sufficient because it does not include age discrimination.

    Steuerwald said he couldn’t predict whether Representatives in the House will eventually insert a specific list.

    “There’s pretty strong opposition to it at this point,” Steuerwald said. “I don’t know where we’re going to end up, but I do believe that the common goal for everybody is that there’s no form of hate excluded.”

    https://fox59.com/2019/03/06/ceos-of-indiana-tech-companies-call-for-specific-bias-crimes-law/
  • March 06, 2019 11:24 AM | Anonymous

    INDIANAPOLIS, IN – Members of the Indiana Technology & Innovation Association (ITIA) gathered at the Statehouse today to urge the Legislature to pass a clear, comprehensive and inclusive bias crimes law.

    ITIA, which launched in November, represents more than 100 technology companies across the state and Indiana’s fastest growing sector.

    The Indiana General Assembly is considering bias crimes legislation this year, but the Indiana Senate recently stripped the bill of its enumerated list of characteristics, including race, religion, color, sex, gender identity, disability, national origin, ancestry, sexual orientation, and age.

    ITIA today urged the House of Representatives to add the list back in and pass a true, enforceable bias crimes law this year. Governor Eric Holcomb has also advocated for this change.

    “Passing a fully inclusive bias crimes statute demonstrates to our employees, our prospective employees and our community that Indiana is a safe and welcoming place for them to live and work,” said CEO of Salesforce Marketing Cloud and Chief Analytics Officer Bob Stutz who was represented today by ITIA Board Member and Salesforce Director of Midwest State and Local Government Affairs Amy Waggoner.

    Indiana is one of only 5 states without a bias crimes law, and 44 of the 45 states with a bias crimes law include a list of enumerated characteristics to ensure the law is enforceable.

    “Technology is Indiana’s fastest growing sector, but we’re in a death match for talent. There aren’t enough skilled workers to fill the jobs we’re creating,” said John McDonald, CEO and Co-Founder of ClearObject and ITIA Board Member. “Having Indiana on the list of 5 states without a bias crimes law is a barrier to attracting skilled talent to our state. We can’t get off this unflattering ‘list of 5,’ without a list.” 

    “If we’re going to continue to operate in the Hoosier state and stay competitive, we have to be able to recruit and retain talent,” said Jon Gilman, CEO of Clear Software. “Let’s take unnecessary recruitment barriers off the table and pass a comprehensive, inclusive bias crimes law this year.”

    Several ITIA members who were negatively impacted by the 2015 passage of the Religious Freedom Restoration Act (RFRA) fear similar fallout if a comprehensive bias crimes law fails to pass this year.

    “Our company was preparing to relocate to Fishers, Indiana from Southern California, just as RFRA gained national attention. Unfortunately, it cost us our Chief Operations Officer and my right-hand man who decided not to relocate here because of concerns about Indiana’s inclusiveness and diversity,” said Anderson Schoenrock, CEO of Memory Ventures. “My fear now – is that if legislators pass a bias crimes law without a list or, once again, fail to pass one – we will face a backlash similar to what occurred after RFRA and threaten our industry’s growth.”

    Joshua Driver, a member of the LGBT community and CEO of Selfless.ly, founded Open For Service after RFRA to combat the negative reputation harming the tech industry.

    “Passing a bias crimes law without a list will counteract all of the work we’ve done in recent years to rebuild our state’s reputation, share Indiana’s story and grow our industry,” Driver said. “We urge our representatives to pass a bias crimes law with enumerated characteristics that include sexual orientation and gender identity.”

    He also noted the lingering effects of RFRA that will likely worsen without passage of a true bias crimes law.

    “These policies can lead to employee losses as well as investment losses. An investment group my company hoped to pitch wouldn’t even consider us because they had made the decision not to invest in Indiana companies after RFRA,” Driver said.

    ITIA members will be sending a letter to members of the Indiana House of Representatives today asking them to stand with Governor Eric Holcomb and add the list of enumerated characters back into the bias crimes legislation before passage.

    “We need to send a strong message that Indiana is a welcoming, diverse state,” McDonald said.

    PHOTO from today’s press conference is available here. PICTURED LEFT RIGHT: (Ray Ontko with Doxpop, Jon Gilman with Clear Software, Joshua Driver with Selfless.ly and Open For Service, Anderson Schoenrock with Memory Ventures, John McDonald with ClearObject, Amy Waggoner with Salesforce, John Wechsler with Launch Fishers and Indiana IoT Lab, Ade Olonoh an angel investor)

    ##

    About ITIA
    The Indiana Technology & Innovation Association (ITIA) is a statewide association of Indiana’s technology driven companies and partners.  ITIA represents more than 100 technology companies across the state and Indiana’s fastest growing sector. More information at indianatechnology.org.

    About ClearObject
    Based in Fishers, ClearObject is an Internet of Things (IoT) systems integrator that designs, develops, deploys, and manages innovative connected solutions and digital data products. More information at www.clearobject.com.

    About Memory Ventures
    Based in Fishers, Memory Ventures encompasses 8 direct to consumer brands all of which help consumers preserve, share and enjoy their favorite life moments. More information at www.memoryventures.com.

    About Clear Software
    Based in Zionsville, Clear Software is a process automation platform that helps large organizations dramatically improve their operational efficiency. More information at clearsoftware.com.

     About Selfless.ly
    Based in Indianapolis, Selfless.ly logs, tracks, and maintains all charitable involvement in one place. It is then tracked in a system and provides important metrics for marketing, recruitment, and retention initiatives. More information at www.selflessly.io.

  • February 01, 2019 2:48 PM | Anonymous

    Although the federal government shutdown is over for now, some small-business owners in central Indiana are still reeling from the impact and worry they could be in the same situation again soon.

    President Donald Trump and congressional leaders reached a deal Jan. 25 to end the shutdown, which started Dec. 22. But the government could close again if a long-term compromise over whether to pay for a security wall along the Mexican border isn’t settled by Feb. 15.

    According to the Congressional Budget Office, the five-week closure cost the economy $11 billion, and $18 billion in federal spending was delayed.

    Some small-business owners—who often rely on government assistance through Small Business Innovation Research grants, Small Business Technology Transfer grants and loans through the Small Business Administration—are still regrouping after not being able to access money they were counting on because the federal government was closed.

    The practical implications in central Indiana varied:

     Everett Berry, CEO of Fishers-based tech startup Perceive Inc., stopped taking a paycheck so he could pay his four employees.

     Boss Battle Games delayed the opening of its Castleton Square Mall location after an SBA-backed loan was put on hold.

     Ellie Symes, CEO of Bloomington-based The Bee Corp., rushed to submit paperwork for the firm’s next round of grant funding immediately after the government reopened in fear that the SBIR grants could be cut off again.

    The company leaders agreed another shutdown would worsen their situations.

    To help encourage compromise in Washington, D.C., the Indiana Technology and Innovation Association—the newly formed advocacy and education association for tech companies—sent a letter to Indiana’s entire congressional delegation on Jan. 29.

    “The chaos and uncertainty caused by these shutdown negotiations is likely to threaten the survival of these startups, hamper major innovations and lead to Hoosier job losses,” the letter read. “It will also send a chilling effect through the startup community.”

    The SBA is rapidly trying to catch up on paperwork, said Laura Schafsnitz, a spokeswoman for Indiana’s SBA office. Within 48 hours of reopening, the SBA processed 1,100 loan applications, totaling hundreds of millions of dollars nationwide. Indiana figures were not available.

    “We’re absolutely overjoyed to be back to work,” Schafsnitz said. “We’re back in business and trying to make sure we have everything in line.”

    Bad timing

    Dustin and Phylicia Burd, owners of Boss Battle Games, were among business owners stuck in limbo for weeks. Just before the government closed, they were ready to sign a $30,000 SBA-guaranteed loan.

    The funding delay came at a bad time—they were scheduled to take possession Jan. 1 of space at Castleton Square Mall for their retro arcade and gaming center, and their existing lease at Washington Square Mall was set to expire Jan. 31.

    “We were scrambling to figure out where we were going to get any funding,” Phylicia Burd said.

    A good friend loaned the company money, she said, and the couple crowd-funded to get by.

    “We stretched ourselves so thin in a panic,” Burd said.

    Barbara Underwood, Indiana director for the National Federation of Independent Businesses, said she hadn’t heard many complaints from the group’s 12,000 members. But she said SBA funding can be important when businesses are expanding.

    “If you’re getting ready to close [on a loan, a shutdown] can be infuriating,” Underwood said.

    The Burds have now received their loan, but the situation delayed the new location’s opening by slightly more than a week and hampered their ability to hire contractors to help with the move.

    “We didn’t feel confident in throwing money around,” Burd said. “We were just scared to.”

    Schafsnitz said that, regardless of whether the government is operating, the SBA encourages businesses to work with their lenders to obtain better terms and rates and use the various resources available on the SBA’s website.

    “We’re always concerned [about] any sort of negative impact that might come out of any sort of delay,” she said. “That’s why we try to provide that positive opportunity.”

    Burd said she is grateful for the loan but will be more cautious about obtaining SBA loans in the future because it’s so hard to predict what the government will do.

    “I would make sure to give myself a lot more time,” she said.

    Startup struggles

    Two of the biggest sources of funding for tech startups, aside from venture capital, are Small Business Innovation Research and Small Business Technology Transfer grants.

    when the federal government shut down, so did the website companies use to draw down the grant money.

    The grants range from $150,000 to $1 million and are paid out in phases. Over the past two years, 54 Indiana companies received $23.2 million in SBIR grants and eight companies received $3.1 million in STTR grants.

    Symes, from The Bee Corp., which helps beekeepers use technology to improve hive management and reduce colony losses, said her firm had already been approved for a $250,000 grant and had received some of the money, but was scheduled to receive the rest during what became the shutdown. She hadn’t even considered how the shutdown would affect her business until someone from another startup warned her SBIR funding was cut off.

    The application for the next funding phase isn’t due until the end of February, Symes said. But she was so worried about another possible closure that she has already submitted her application.

    “It’s definitely stressful,” Symes said. “It just shows this stuff infiltrates every aspect of our economy in different ways.”

    An interruption in the grant process could delay The Bee Corp.’s growth, she said, and require the firm to change its funding strategy.

    “We’d have to do more private capital and do that sooner,” Symes said. But she acknowledged that her company is lucky in that it can shift money around to cover expenses until the grant money comes through.

    “We watch our cash flow,” said Symes, who has four employees. “We were able to solve problems with other sources of funding.”

    Other startups, like Perceive, have struggled more.

    Perceive offers software that automates and expands customer service training for high-end sales associates.

    The company received a $750,000 grant, and Berry said it has been waiting on the second payment to become available. About 95 percent of its current funding comes from its SBIR grant.

    Berry said he stopped taking a salary in December, delayed payments with vendors, postponed capital-intensive projects, and had the company take on a consulting project to bring in extra cash.

    “We’re still a little on pins and needles,” he said.

    Berry said he covered the recent round of payroll and will be able to fund the next one. But after that, if the grant money still hasn’t come through, his employees might have to work without pay or stop working.

    “It’s such a major disruption,” he said.

    And the impact could linger. Berry said the company orders some of its supplies from China. Usually, U.S. companies stock up in December and January to prepare for the time Chinese business stop during much of the 15-day Chinese New Year, which starts Feb. 5.

    But this year, “we did basically the bare minimum because of the timing of the shutdown,” he said.

    Perceive could suffer delays if it adds customers before it can buy more supplies. “There will be some negative impact felt for probably three to four months,” Berry said.•

    https://www.ibj.com/articles/72282-small-businesses-still-feeling-federal-shutdown-hangover#.XFSnrUDCJwE.twitter

  • January 31, 2019 4:18 PM | Anonymous

    INDIANAPOLIS, IN – The Indiana Technology & Innovation Association (ITIA) today joined the bipartisan Indiana Competes coalition, which includes several local and regional Chambers of Commerce, to advocate for passage of a bias crimes law in Indiana.

    Adopting a bias crimes law is part of ITIA’s 2019 policy agenda, which the association recently released. Indiana is currently one of only five states without a bias crimes law.

    A majority of ITIA members who participated in a policy agenda survey expressed the need for a bias crimes law that specifically includes sexual orientation and gender identity. Governor Eric Holcomb has also advocated for legislation that includes such language.

    “Indiana’s technology industry is quickly growing but there aren’t enough skilled workers to fill the jobs we’re creating. We need to remove barriers to attracting tech talent to our state and passing a bias crimes law with an enumerated list of characteristics is an important step to send the message that Indiana is a welcoming, forward-looking state,” said John McDonald, ITIA Board Member and Policy Committee Co-Chair. “This will help attract technology companies and talent to Indiana and solidify the state’s reputation as a great place to live, work and innovate. ITIA is proud to join Indiana Competes to amplify this message.”

    ITIA supports a clear and specific bias crimes law that enhances penalties for criminals who target victims based on characteristics such as race, ethnicity, religion, national origin, sex, gender identity, sexual orientation and disability.


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