Startup business leaders often face a dilemma when taking that first step to fulfilling the entrepreneurs’ vision: Do they go it alone, or should they reach out for help and support? The issue with taking the former route is that they may find they lack the innovation resources, support, and guidance needed for the long haul. The challenge with the latter strategy is: Where do they find the assets and resources needed to build their teams and set themselves up for success? We have the answers!
What is the Best Asset for Startup Success?
The best assets to have, to succeed in a startup venture, are the innovation resources required to build a resilient team. And then, around that team, venture founders typically establish other important building blocks for success. With Maryland’s magnanimous financial support programs, startup businesses can access:
- A range of financial incentives, including generous tax credits
- Startup business loans with highly affordable terms
- Other seed funding and entrepreneurial financing
- Venture-specific grants targeting their specific business or industry
While Maryland startup funding programs are the lifeblood for startup success, it takes other types of assets too for fledgling ventures to survive and thrive into successful businesses. That success also requires technical, operational, and professional support to help newly-minted business leaders access the financial assets, and build their teams. That’s the kind of support one only finds in venture incubators like the Maryland Innovation Center (MIC).
Why is Knowing What’s Available Important for Success?
It is important to know all the available Maryland entrepreneurship operational and financial resources available to you, so that you can prudently plan your venture’s financial future. While having a vision is critical for startup success, a mix of other resources, such as:
- Office space, furnishing, and workspace logistics and support
- Meeting and conference infrastructure
- Assistance in developing business plans
- Help with marketing and promoting your venture
- Support with team building and staff development strategies
- Mentorship programs
- …and a whole lot more!
…are equally essential. Without these supporting resources, financing alone will not ensure your fledgling businesses’ vision comes to fruition. Financing is the bloodline for venture startups. But other resources, such as shared office space, access to experienced mentors, and the opportunity to network with like-minded entrepreneurs, is what leverages that financing to transform visions into viable enterprises.
As a newly established venture, you may understand what Maryland government offered financial incentives and rewards programs are available to you. However, you’ll also likely need support and assistance accessing those resources, and making full use of the incentives to maximize their benefits. As part of the MIC network, you can access office space, a vast network of professional connections and networking opportunities, mentorship and leadership programs, knowledge sharing, and much more.
MIC teams also help fledgling businesses test their business plans, develop their ideas, build their team’s capabilities, and help early-stage businesses establish the right pathways to achieve their business goals. MIC specialists can also help you find the right innovation resources available for your startup. And here’s some of what’s out there, as part of the Maryland government’s business startup incentive plan.
Understanding Advantage Maryland (MEDAAF) and MIDFA Programs
As a new business venture, you have two entities that’ll champion your cause by offering you the financial support you need. The Maryland Economic Development Assistance Authority and Fund (MEDAAF), popularly called the Advantage Maryland program, and the Maryland Industrial Development Financing Authority (MIDFA) serve as broad-based Maryland entrepreneurship financial resource providers for startups.
- MIDFA is tasked with the review and approval of financial transactions in the form of loan guarantees and private activity bonds
- MEDAAF, on the other hand, assists in reviewing and approving grants, loans and financial support for economic development initiatives
In the case of MIDFA, the private sector is encouraged to invest in various business activities through incentives such as insurance, and by issuing taxable and tax-exempt revenue bonds. Startups can tap into these financial resources for financing construction costs, acquiring buildings, purchasing land, machinery, equipment and fixtures and furniture. Fledgling ventures might also consider MIDFA financing for other “soft costs” eligible under the program, as well as for funding leasehold improvements and working capital requirements.
Funding under the MEDAAF program is secured through a competitive process. Startups can tap into these funding resources for economic activity, such as brownfield redevelopment, infrastructure development and support, business attraction and retention plans. The funds may also be used as a revolving loan fund to support planning and implementing local strategic activities.
What is The Enterprise Zone Tax Credit (EZ)?
The Enterprise Zone Tax Credit is another incentive that new ventures can tap into as an innovative source of early-stage funding. One way for startup businesses to make the best of available innovation resources is to consider investment opportunities in Maryland’s enterprise zone. As a fledgling business, doing so opens the doors for you to tap into benefits and incentives offered under the EZ Tax Credit program. These benefits include real property and state income tax credits when businesses locate their operations, or fund activities, within designated industrial/commercial zones.
Under the program, which includes 19 jurisdictions that host 34 EZ’s, and two zones with 7 focus areas, businesses receive the incentives in return for investing in those locations, and/or creating jobs there. Depending on how your fledgling business invests in projects within the EZ’s and focus areas, you may also be entitled to benefit from other opportunities, including enhanced income tax credits when you create new jobs; or personal property tax credits for your investments in personal property.
How Can the ExportMD Program Help Startups?
The ExportMD Program can be used as a creative Maryland startup funding resource for fledgling ventures looking to market their businesses internationally. While local, regional-focused, and national-based ventures have several resources available to tap into, including MEDAAF and MIDFA programs, this program is ideal to support ventures with an eye to doing business overseas. Your venture might be eligible for an award of up to $5,000 in reimbursable expenditure to:
- Support you with an international marketing campaign
- Help you cover the cost of developing and launching a website to attract foreign clients
- Fund international travel expenses
- Pay some expenses related to your participation in foreign trade missions
- Cover the cost associated with attending virtual trade shows
Because this program is operated in conjunction with the U.S. Small Business Administration (SBA), to be eligible, your business must be considered “small” as defined by the SBA. You must also be in business for at least one year prior to applying for the award. Your eligibility will also depend on your status with the Maryland Department of Assessments and Taxation – only a business with good standing may apply for benefits under the ExportMD Program.
Upon initial review, it may seem as though your fledgling venture might not qualify for this set of innovation resources. However, the Maryland Office of International Investment and Trade (OIIT) may have other financing options that are right for you. You can work with the Maryland Innovation Center (MIC) team to review your financing needs, and then lean on their support to help you tap into the most appropriate financing program.
How Can the Innovation Investment Tax Credit Program Help?
The Innovation Investment Tax Credit program is a Maryland entrepreneurship funding and financing option that new, small, and growing ventures may tap into. It enables small businesses to raise venture capital directly, through private investors, without getting into complex financing relationships with large banks and financial institutions. The mechanics are simple:
- It is open to businesses with less than fifty full-time employees
- It is a sector-specific financing vehicle used to provide liquidity for up-and-coming companies
- Investors, who invest in designated companies, may receive up to 33% of invested funds in income tax credits – up to a maximum of $250,000
However, because of the restricted mandate for this tax credit program, not every startup venture may qualify to participate in its benefits. The tax credit is only available for investors interested in growing and financing Maryland’s early-stage technology companies. This program is great if your small, recently created (new), or startup venture operates in the tech sector, including energy, blue technology, aerospace, defense, cybersecurity, and robotics. As MIC specialist can help you determine if your startup can tap into this program.
Is the Maryland New Start Microloan Program Right for You?
This program is a Maryland startup funding resource that the Department of Commerce and the Maryland Department of Labor jointly operate. It is supported by the Governor’s Office of Small, Minority, and Women Business Affairs. Under the program, if you are starting a small business, you could be entitled to a no-interest loan of up to $50,000.
Tapping into Business Incubator Resources
As a startup venture, tapping into the innovation resources offered by incubators, such as MIC, makes good business sense. For instance, through the MIC’s Business Revitalization Initiative Through Entrepreneurship program—or BRITE—qualifying businesses may get the coaching, training, mentoring, and technical support needed for entrepreneurial success.
As part of the MIC network, startups also have access to 5-floors of shared office space – up to 63,000 square-feet of it! These spaces come with modern, state-of-the-art facilities too, such as a 150-person conference/event space, break-out rooms, meeting and collaboration spaces, and audio, video and podcast studios.
This support helps start-up teams focus on inventing, innovating and creating, rather than trying to build day-to-day infrastructure from scratch. With so much else on a fledgling business leaders’ plate, tapping into these resources gives startups a “flying start” on the road to entrepreneurial success.
