Pre-seed and Seed Matching Fund Program
Frequently Asked Questions
I believe I meet all the eligibility criteria. Does this mean I will get funding?
Our team reserves the right to exercise authorized discretion in determining which applications will successfully advance to the funding stage, based on our holistic evaluation of each application’s merits and fit with our program goals and priorities. NY Ventures invests in diverse teams that are using technology to solve important challenges in areas of strategic interest across the state. Through the Pre-Seed and Seed Matching Fund Program (NYVPSSF), we are focused on expanding access to venture capital across New York State, particularly for underserved geographies and socially and economically disadvantaged individuals.
What is the deadline to apply?
We are accepting applications on a rolling basis, and there is no fixed deadline to apply at this time.
What is the application process and timeline?
After companies submit an application, our internal investor team will review the materials. It is our goal to be in touch about the status of your application within approximately 30 days of your submission. If we think there is a potential fit, we will conduct due diligence vetting using submitted materials, and may request additional information to facilitate our due diligence processes. For due diligence, we evaluate business model, market size, team, product, financials, competitive advantage, impact for New York State, and any other criteria the team finds relevant. We will then reach out to select applicants to schedule a meeting with the company and with the lead investor, which may in turn result in the need for further due diligence review. Upon the conclusion of all required and recommended due diligence activities, funding decisions will be made, and we will initiate the process of closing on the investment transactions.
The federal program requires that our investment be made within 90 days of securing eligible matching investment(s). Because of that, if you raised capital more than 30 days ago, it is unlikely that we will be able to use the funds already invested against the match requirements. If you are able to raise additional matching funds and are still under the $2M dilutive funding cap, you are welcome to apply using those.
Based on the federal program requirements, when in the fundraising process do you recommend that I apply?
Federal program requirements mandate that investment from the NYVPSSF can only match private funds raised not more than 90 days earlier. The 90-day period will be measured from the date that transaction documents are executed. In addition, while the evaluation process can start earlier, investment from NYVPSSF requires a qualified lead investor and commitment of the matching private funds. Therefore, we recommend that companies begin their fundraising process and ideally secure private investment commitments before applying, but also apply with enough time to allow for thorough review and due diligence before the round closes.
Do you consider cannabis businesses?
At this time, applicable laws and regulations do not allow us to consider cannabis businesses for receipt of federal funds under our program.
What terms do you invest on? Is this a grant program?
No, the funding provided through the NYVPSSF is dilutive, as opposed to non-dilutive grant funding. Our funds are required, according to federal program guidelines, to be invested on the same terms as any other private investor in the same financing round.
I am raising an angel round and do not have a “lead” investor. Do I still qualify?
As stated in the investment eligibility guidelines, a “lead” can be: any qualified private sector investors; investors who provide private sector match as part of an investment entity (venture capital fund, angel fund, family office, investment partnership, or LLC); an individual member of an organized investment group who is an accredited investor and qualified purchaser; or an individual that can otherwise establish credibility as an accredited investor.
As part of the application process, NY Ventures will speak with at least one of the investors in the financing round. We expect this would be the largest investor, if not your lead, or one who can best speak to the investment opportunity and why they participated. Please be advised that in accordance with our policies and best practice standards, we cannot accept a family member or relative as a reference.
What does the requirement to be registered for business in New York State mean?
While eligible businesses can be incorporated in another state, they must be registered to do business in New York State, and must also be meaningfully and demonstrably positioned to advance the program goals and priorities of expanding access to venture capital across New York State. Read more about registration information here.
As a government entity, what are your reporting requirements?
We have certain responsibilities to gather information that is responsive to the requirements, terms and conditions attached to our state and federal sources of funding that make us a little different from a typical investor. Program funds are being provided by the State Small Business Credit Initiative administered by the U.S. Treasury, as well as via the State of New York. As such, we need to be sure we can be responsive to our stakeholders and fully compliant with our obligations to collect the information needed to demonstrate the impact and success of the program. We will require companies to sign a side letter stipulating that they provide data including, but not limited to, primary and secondary uses of the proceeds from the ESD investment; climate alignment and community impacts of use of ESD Proceeds; impacts on job creation/retention from use of ESD Proceeds; race, gender, sexual orientation of the Company’s principal owners; and additional financings. While we appreciate the sentiment that this approach and context may be different, we also hope that it helps even the earliest stage start-ups to be sure they develop the fundamental reporting/tracking structure and systems they need as they continue to develop and grow.
My business is not currently located in New York State, but if I receive this funding, I could move. Should I still apply?
NY Ventures, in alignment with the goals of the SSBCI program, is focused on expanding access to venture capital across New York State. We require companies to be headquartered and have at least one C-suite employee in the state for at least 12 months after investment. This will be a legally binding agreement. We strongly discourage companies from applying if they are not currently based in the state. We love to see more businesses come to New York, so we welcome you to move and submit an application once you are better able to meet our requirements.
Will my application be confidential?
As a general matter, our application portal is only open to reviewers internal to Empire State Development.
ESD is subject to the Freedom of Information Law (“FOIL”), as set forth in Article 6 (Sections 84-90) of the New York State Public Officers Law. FOIL provides public rights of access to records reflective of governmental decisions and policies. Consequently, ESD cannot strictly guarantee the confidentiality of records submitted to its custody and control; since legally mandated disclosure obligations may arise pursuant to FOIL, as well as other laws, regulations, rules, and court orders, where applicable. It should be noted that there are recognized exemptions under FOIL that may be invoked to safeguard the confidentiality of trade secrets and other highly sensitive information which, if disclosed, would cause substantial injury to a company’s competitive position. ESD has procedures in place to provide for notice to companies whose records are impacted by FOIL requests, and to ensure legally appropriate application of relevant exemptions.
More information about FOIL is available here: Freedom of Information Law | Department of State (ny.gov).
How do I find out about the status of my application?
We are not able to provide individualized updates on the status of your application while our review process is ongoing. Our goal is to be in touch about the status of your application within approximately 30 days from the date of your submission. If we are interested in moving forward, we will be in touch to schedule an interview. If we do not think there is a fit with our program, we will let you know.
I put a lot of work into my application and was rejected. Can I get feedback or appeal the decision?
As an equity investment program, we reserve the right to reject applicants in the exercise of our authorized discretion. Unfortunately, due to the high volume of applications we receive, we are unable to provide individualized feedback on each one. Please note that you are welcome to review the investment eligibility guidelines and re-apply at a later date if you believe you can better meet our criteria. Otherwise, we encourage you to explore the other business resources at Empire State Development.
I still have questions, what should I do?
If you still have questions, please email us at [email protected] or register for our bi-weekly office hours on Mondays or Thursdays.