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The Governor’s Office for Economic Development (GOED) is investing in entrepreneurship this session with bills such as AB41, which would create the Nevada Innovation Account, and AB77, Assemblyman Steve Yeager’s (D-Las Vegas) proposal to create an Office of Entrepreneurship within GOED.
In Gov. Joe Lombardo’s State of the State address, he said Nevada should be “the most entrepreneurial-friendly state in the nation.” However, Karsten Heise, GOED’s senior director of strategic programs and innovation, said Nevada is “lagging behind” other states and could be using successful models across the nation to bolster a healthy entrepreneurial ecosystem.
“This is not a sprint, it’s a marathon,” said Heise, who brought AB29 — a bill that would have created the Nevada Innovation Account from the Knowledge Fund but did not become law — to the Legislature last session.
Now, after the previous bill failed to pass, Heise is taking another stab at creating the Innovation Account as AB41 and AB77 make their way through the Senate in the final days of the session after passing in the Assembly.
There is no fiscal note for AB41, meaning it is not expected to cost the state money. Instead, it will create a framework for entrepreneurial support, a move Heise said will make it easier for the state to apply for federal grants. With the Innovation Account, he said he hopes to help small technology startups — those with a staff of less than 10 and generating less than $2 million a year — grow, filling gaps where those businesses tend to struggle.
“The structure of the bill is important,” Heise said. “We have written in four main programs and that represents basically four gaps that we have identified.”
The first program addresses the need to finance the start of a company. While money sometimes comes from family and friends, the program aims to help companies acquire research and development grants to establish their ideas.
The second program addresses a gap GOED described as “the valley of death” — when companies are doing the work between conception of the idea and the business’ launch. The program would work to maintain and operate incubators and accelerators by providing grants or other financial assistance to companies, nonprofit entities, economic development agencies, educational institutions, governmental agencies or other entities for programs that promote an entrepreneurial business environment or train entrepreneurs.
The third program eases companies’ burdens as they begin to grow their newly launched business with a small business innovation research (SBRI) fund matching program. The fourth program, which comes into effect as the company grows into maturity, invests in internship and retention programs.
AB41’s proposed investment into education and internship programs drew support from higher education and entrepreneurship nonprofits.
“Historically, we’ve lost a lot of our STEM graduates to opportunities outside of Nevada,” said Heather Brown, a regent and president of Startup Vegas who testified in support for AB41. “I would love to see students who graduate from our [Nevada System of Higher Education] institutions actually stay and help grow our economy, especially in these economically diverse sectors.”
Though Yeager’s AB77 is not sponsored by GOED, the two pieces of legislation would work together if both pass, Heise said.
“These two bills reinforce each other and there is that link to really strengthen that entrepreneurial ecosystem,” Heise said.
AB77 would create the Office of Entrepreneurship within GOED to track the amount of money the state gives to businesses that have been in operation for less than five years, are owned by women, minorities and veterans, as well as make recommendations on improving overall entrepreneurship within the state. AB77 does have a fiscal note, partly because it would add two full-time employees to establish the office.
AB77 also has a provision that would make the data collected by the Office of Entrepreneurship confidential.
Though Heise said he doesn’t want to be too hopeful about the bills’ passages, he says he is pleased they seem to be moving through the process.
“We don’t want to tempt fate here, but it’s looking good so far,” Heise said.
AB41 passed unanimously through the Assembly on May 26 and passed unanimously through the Senate Committee on Revenue and Economic Development on May 30. AB77 passed unanimously from the Senate Committee on Revenue and Economic Development on Friday and is awaiting further action in the Senate. It passed in the Assembly despite 12 votes in opposition — all from Republicans — on May 31.
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