{"id":118834,"date":"2025-08-29T16:49:13","date_gmt":"2025-08-29T16:49:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/118834\/"},"modified":"2025-08-29T16:49:13","modified_gmt":"2025-08-29T16:49:13","slug":"funding-cuts-to-missouri-technology-corp-worry-startups","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/118834\/","title":{"rendered":"Funding cuts to Missouri Technology Corp. worry startups"},"content":{"rendered":"


\n Jacob Barker | Post-Dispatch
\n <\/a><\/p>\n

ST. LOUIS \u2014 The Missouri Technology Corp., a state-sponsored entity that invests in early-stage companies and supports entrepreneur programs, is curtailing some of its programs after the Legislature withheld all of its funding for the current fiscal year.<\/p>\n

The $8.5 million cut has thrown a wrench into the MTC\u2019s strategic plan to provide reliable funding for the sector by both investing in tech and life sciences companies and providing grants to innovation communities that foster startups across Missouri.<\/p>\n

MTC\u2019s leaders and others in St. Louis\u2019s startup community, where the bulk of the state\u2019s life sciences industry is based, are worried. A report from industry group TechSTL last week indicates the region\u2019s startup ecosystem is under strain due to the closing or retooling of many programs and groups in the space, along with uncertainty around federal funding for innovation and entrepreneurship programs.<\/p>\n

\n People are also reading\u2026\n <\/p>\n

\"MTC<\/p>\n

Missouri Technology Corporation logo.<\/p>\n

\u201cThe question of how big of a wrench comes down to what happens next year,\u201d MTC Executive Director Jack Scatizzi said. \u201cIf we\u2019re returned to funding next year, well, we put the Band-Aid on, we survive. Probably no long-term damage. But if we\u2019re not returned to funding next year, or if we\u2019re only returning to a couple of million dollars, that\u2019s where the long-term damage starts.\u201d<\/p>\n

Among the programs MTC is suspending<\/a> is a recently approved plan to pool its resources with private investors to help raise capital funds for startups. It also put on ice grant programs that funded the build-out of wet lab space and supported nonprofits trying to pool their assets to build startup communities.<\/p>\n

MTC still has money for its venture capital investments. A major federal grant will allow MTC to continue providing early-stage capital to companies this year and beyond. The rest of that funding is no sure thing, however, and the elimination of state funding curtails MTC\u2019s ability to grow the organizations that build entrepreneurship networks critical to fostering collaboration and attracting talent.<\/p>\n

For the past several years, MTC had strong state support, receiving $40 million in state appropriations since 2023. While a small blip within Missouri\u2019s $50 billion budget, St. Louis economic development leaders say MTC has an outsized impact helping new companies attract investment and create jobs.<\/p>\n

In the past decade, MTC has invested more than $50 million in 160 companies, which in turn have raised another $2.1 billion and created 8,000 jobs, according to their most recent annual report. Meanwhile, it has sent millions in grants to groups building the communities that support such firms, helping them construct new lab space or provide programming.<\/p>\n

\u201cWe don\u2019t have any other state-level leadership or investment that\u2019s really driving the broader technology-based economic development conversation for the state of Missouri,\u201d said Emily Hemingway, executive director of industry support nonprofit TechSTL. \u201cHaving that statewide ecosystem leadership is critical, and it\u2019s not like we have another organization that would fill that hole.\u201d<\/p>\n

TechSTL, which itself has relied on MTC grants to grow, released a report Tuesday on the state of the St. Louis entrepreneurial ecosystem<\/a> that found nearly half of the entrepreneur support programs here have changed or closed in the past five years. It warns the \u201cerosion of infrastructure\u201d could hamper the region\u2019s ability to grow startups and compete with other cities amid a wave of artificial intelligence-fueled innovation and turmoil in the tech economy.<\/p>\n

\u201cIn times of market uncertainty, entrepreneurial ventures are our strongest defense against economic decline,\u201d the report says. \u201cThe time to invest is now, because if we wait, we lose.\u201d<\/p>\n

Missouri Gov. Mike Kehoe is aware of MTC\u2019s loss of state funding. The governor had recommended $8.5 million for the MTC in his proposed state budget. The Missouri House added $2 million to that, but the Missouri Senate stripped out the funding in favor of direct appropriations to several economic development organizations, most of which Kehoe vetoed.<\/p>\n

The governor was in St. Louis on Thursday for the ribbon-cutting ceremony at the new offices of biotech firm Varro Life Sciences, which recently moved here from New York<\/a> to be close to Washington University. Kehoe credited the life sciences ecosystem around the Cortex Innovation District, where Varro\u2019s new labs and offices are, and Washington University\u2019s medical school campus with luring the high-tech company.<\/p>\n

While MTC was not involved in a direct investment in Varro, it has invested millions of dollars over the years in companies based in the Cortex area and funded programming the tech district offers to its startup tenants. MTC is important to Cortex and for communities around the state, Kehoe said.<\/p>\n

\"Varro<\/p>\n

Varro Life Sciences CEO Tom Cirrito speaks Thursday, Aug. 21, 2025, during a ribbon-cutting event for the biotech firm, which is developing sensors that can detect airborne pathogens and moved to St. Louis from New York. Seated from left are former St. Louis Congressman Dick Gephardt, St. Louis Mayor Cara Spencer, St. Louis Development Corp. Director Otis Williams, Missouri Department of Economic Development Director Michelle Hataway and Missouri Gov. Mike Kehoe.<\/p>\n


\n Jacob Barker | Post-Dispatch
\n <\/a><\/p>\n

\u201cI\u2019m a huge fan of MTC, and that\u2019s why we put it in our budget,\u201d he told the Post-Dispatch. \u201cWe\u2019ve got to do a better job, I have to do a better job, personally, of letting legislators know from across the state what good things MTC does.\u201d<\/p>\n

Sam Fiorello, Cortex\u2019s president and CEO, pointed to MTC\u2019s role funding early Cortex programming and other initiatives and said he is \u201cconfident\u201d state leaders in Jefferson City will restore funding for the organization next year. Varro\u2019s move to St. Louis, and the $43 million investment and 30 jobs it plans here, shows the indirect benefit of investing in tech entrepreneurship through initiatives such as the MTC, he said.<\/p>\n

\u201cThere would be no Varro without Cortex,\u201d Fiorello said. \u201cThere\u2019d be no Cortex without stuff like MTC.\u201d<\/p>\n

It is not the first time MTC has faced funding uncertainty from state budget writers. After Gov. Eric Greitens took office in 2017, the Legislature slashed its budget 90%<\/a> to just $2.5 million. It was not until after the pandemic that MTC recovered, with the state upping its appropriation to $16 million in 2023.<\/p>\n

Blunting the impact of the most recent state cut, MTC won a $95 million federal grant in 2022 for its venture capital program<\/a> that invests in companies alongside private funds. It has received the first round of those funds, which it split with nonprofit microlender Justine Petersen. MTC kept about $19 million for its investment fund and has deployed about 80% of those funds, Scatizzi, MTC\u2019s chief, said.<\/p>\n

MTC is in the process of applying for the second tranche of funds from that grant, potentially worth around $30 million, which could come in around the end of the year, Scatizzi said. That grant has not been impacted by the Trump administration\u2019s cuts to federal funding, and Scatizzi said he is confident the next round will come through. What happens with the third round is too far out to predict, he said. Meanwhile, other federal funding that supports small business and entrepreneurship is getting cut.<\/p>\n

That could make Missouri\u2019s support for MTC even more important in the near future.<\/p>\n

\u201cNo one knows what\u2019s happening at the federal landscape for the federal dollars for innovation and entrepreneurship,\u201d Scatizzi said. \u201cIf we see the drop in federal dollars going into innovation and entrepreneurship, then the question is, which states are best suited to fill that gap? And if your state isn\u2019t able to fill that gap, the state may start to fall behind.\u201d<\/p>\n

<\/p>\n


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