Build to Scale (B2S) Grants Program for Entrepreneur-Support Organizations

CONTEXT:

Under the Build to Scale Program, the U.S. government manages a portfolio of grant competitions that further technology-based economic development initiatives that accelerate high quality job growth, create more economic opportunities, and support the future of the next generation of industry-leading companies.

SUPPORT MECHANISM:

The Build to Scale Program seeks to build regional economies through scalable startups, and is comprised of three separate grant competitions for entrepreneur-support organizations:

1. Venture Challenge (formerly known as the “i6 Challenge”): seeks to support entrepreneurship and accelerate company growth in communities, regions or combinations of regions. The Venture Challenge awards grants to intermediary organizations like accelerators, universities, and non-profits supporting new business ventures that are:

  • scalable by nature,
  • challenging the status quo of markets,
  • commercializing technologies, and;
  • furthering job creation

2. Capital Challenge (formerly known as “Seed Fund Support”):

While early access to capital is crucial for startups, but can be difficult to obtain outside traditional startup hubs. The Capital Challenge seeks to increase access to capital in communities where risk capital is in short supply, providing operational support for:

  • the formation, launch, or scale of investment funds that seek to invest their capital in scalable startups
  • organizations with a goal to expand capital deployment within a community, region, or regional industry (i.e. angel networks or investor training programs)

3. Industry Challenge: provides $4 million in funding to pilot a new Industry Challenge, which seeks to support entrepreneurship and accelerate company growth within the Blue Economy for the fiscal year (FY20) cycle.

For the purposes of this Industry Challenge, the blue economy includes freshwater as well as marine activities, and can include lines of business directly connected to oceans, rivers, or other freshwater and marine waterways. Sectors may include, but are not limited to, aquaculture, irrigation, filtration, water-technology, offshore wind, or marine conservation. Eligible entities are those seeking to:

  • support commercialization of these technologies
  • improve competitiveness of these startups
  • increase connectivity and collaboration between these stakeholders
  • leverage the blue economy to support innovation and job creation
IMPLEMENTING AGENCIES:

The Office of Innovation and Entrepreneurship (OIE) at the U.S. Economic Development Administration (EDA) leads the Build to Scale (B2S) Program. 

An agency within the U.S. Department of Commerce, EDA makes investments in economically distressed communities in order to create jobs for U.S. workers, promote American innovation, and accelerate long-term sustainable economic growth.

ELIGIBILITY:

The following entities are eligible B2S Program grant recipients:

  • a State
  • an Indian tribe
  • a city or other political subdivision of a State
  • an entity that is a nonprofit organization
  • an entity that is an institution of higher education
  • an entity that is ia public-private partnership
  • an entity that is a science or research park
  • an entity that is a Federal laboratory
  • an entity that is a venture development organization
  • an entity that isan economic development organization or similar entity
  • an entity that is has an application that is supported by a State or a political subdivision of a State
  • an entity that is a consortium of any of the entities described.

Applicants must provide a minimum of one-to-one (i.e. 50% of the total project) in matching share for all challenges. Applicants must demonstrate that this matching share (cash, in-kind, or a combination of cash and in-kind contributions) is available, unencumbered, and committed to the project.

EDA has promulgated regulations that provide additional guidance on eligibility.

Timeline:

Please note that the B2S Program was named the Regional Innovation Strategies (RIS) Program until 2019.

2010: The America COMPETES Reauthorization Act of 2010 enabled the Office of Innovation and Entrepreneurship (OIE) to lead the RIS Program to spur innovation capacity-building activities in regions across the nation. 

2010: The i6 Challenge, was launched in 2010 as part of the Startup America Initiative. It was then included in the 2014 Regional Innovation Strategies Program.

2014: The RIS program was effectively launched in 2014 as portfolio of grant competitions.

2019:

  • EDA completed a program evaluation of its performance during the 2014-2017 period.
  • The Department of Energy partners with the Department of Commerce's EDA to pilot a new grant competition (Industry Challenge) during the fiscal year (FY20) cycle.

2020: 

  • The name of the program was changed to Build-to-Scale.
  • On September 16, 2020, U.S. Secretary of Commerce Wilbur Ross announced that 52 organizations — including nonprofits, institutions of higher education, and entrepreneurship-focused organizations — from 36 states will receive grants totaling $35 million to support entrepreneurship, acceleration of company growth, and increased access to risk capital across regional economies. Grantees were selected from a competitive pool of more than 600 applications.

Documents of the program over its history from the government are available, here

MONITORING + EVALUATION METHODS

Support and amplify the best organizations, practices, and resources local communities are using to help their entrepreneurs build and scale high-tech, innovative businesses.

RESULTS:

EDA completed a program evaluation in 2019 to determine whether the program was achieving its goals and to determine ways the program can improve. The evaluation concluded that EDA’s 2014-2017 implementation of the program:

  • “has provided critical funding that would have otherwise been impossible for participants to raise and access” and
  • “should be continued as a vital catalyst for supporting state and regional innovation.” 

Reported impact as of 2019: 

  • Entrepreneur-support organizations reached: Through six national competitions the program has solicited more than 1,300 proposals from across the country. It has awarded grants across 224 projects.
  • Cumulative investment: The Program has awarded $100 million in grants, matched by over $115 million in community dollars.
  • Economic impact: Collectively, these grants have helped create over 14,200 jobs and driven more than $1.6 billion in follow on investment capital into startups and new venture funds. 

2020:

  • The 2020 awardees leveraged an additional $44 million in matching funds from a variety of private and public sector sources.
NOTES + ADDITIONAL CONTEXT:

One of the recommendations which the Start Us Up Coalition included in America's New Business Plan is for the U.S. federal government to develop inclusive entrepreneur support mechanisms, given that one of the biggest advantages for an entrepreneur with a new idea or business is getting support from skilled professionals, such as through strong networks, cooperative platforms, co-working hubs, and highquality incubators and accelerators.

Excerpt detailing this policy recommendation (see page 16):

"Government should support the growth and development of those methods and others to connect entrepreneurs with helpful people and tools. Policymakers should:

  • Develop competitive grants to modernize the 63 Small Business Development Centers (SBDCs) and more than 900 service locations, with a focus on facilitated learning through connections and peer support in entrepreneurial ecosystems.
  • Create pay-for-success models that provide federal support to organizations that serve entrepreneurs when certain agreed-upon benchmarks are met, such as the number of new businesses created, ease of accessing appropriate capital, increased revenues, new jobs created and sustained, and underserved areas and populations reached.

Supporting Evidence:

  • About a quarter of black (26%) and Latinx (24%) first-year business owners have only one or fewer other business owners in their network.
  • Recent analysis found that the introduction of accelerators to a region has a significant impact on the number of early-stage deals for new businesses, and these deals are driven primarily by the emergence of local, new venture capital firms." 

CURATED BY

Ewing Marion Kauffman Fundation
United States
Ewing Marion Kauffman Fundation
United States
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