PROVIDENCE, RI – Mayor Angel Taveras was joined today by HUD New England Regional Administrator Barbara G. Fields and other city and federal officials to celebrate the City’s Innovation Investment Program (IIP) and the 23 New Economy start ups that received funding through an equity investment program supported by the U.S. Department of Housing and Urban Development. The event, scheduled during ‘Small Business Week,’ included representatives of the Chamber of Commerce, area colleges and universities, and graduates of business accelerator programs.
“As Providence strengthens its fiscal ground and makes moves forward on a path for progress, we need to make every effort to foster an economic climate that promotes job growth and makes use of our creative capital. The businesses that participated in the Innovation Investment Program will help create new jobs in our City,” said Mayor Angel Taveras. “More importantly, they will serve as ambassadors for other business owners and other entrepreneurs who will look to Providence as a land of opportunity.”
Providence used $1 million of designated HUD funds to provide $50,000 of seed payments to upstart, entrepreneurial ventures. In return, the City requires the businesses to headquarter in Providence, remain within the City for at least one year and create one full time position for every $35,000 of funding. The program allows the City to take an equity investment share in startup companies with the directive that those companies create at least two, new full time positions. In total, the City’s support for the IIP could create as many as 50 new jobs in emerging fields.
“Through this program, the City of Providence is successfully leveraging its HUD funding to create jobs and spur economic development,” said Barbara Fields, HUD New England Regional Administrator. “We commend the city for achieving great results with IIP, we’re proud to be a partner in this effort.”
The program, conceived in late 2010, was executed under a recapitalization of the federal HUD program late last summer, with the support and assistance of its field and national headquarters. Equity investments are an approved use of funds but have not been used as such. Providence is the first in the country to attempt this application of funds for entrepreneurial growth.
The City partnered with proven incubators to award funds to entrepreneurs and business-owners. Twenty-two companies based out of Betaspring and one from Slater Tech participated in the IIP during this round of funding. If additional HUD funding is available in future years, the City will look to expand its partner base to include additional incubators.
“Helping to launch new companies is one of the smartest things we can do to stimulate economic growth. Our entrepreneurial community is getting stronger everyday and the IIP program has significantly accelerated our efforts to launch more companies in Providence. We thank HUD, Mayor Taveras and the City of Providence for their leadership and support,” said Allan K. Tear, co-founder of Betaspring.
“As managers of an economic development fund that operates by venture capital principles, we spend every day working to support the smartest entrepreneurs attacking the most meaningful problems,” said Thorne Sparkman, managing director of the Slater Technology Fund. “We’ve seen first-hand the dramatic effect on employment when we get capital into the most capable ventures. We are gratified to be joined in our efforts by the city of Providence, and welcome the opportunity to work with them on the IIP initiative.”
Small businesses employment for than half of all working Rhode Islanders. Tomorrow, Mayor Taveras, Economic Development Director James Bennett and representatives from the U.S. Small Business Administration will partner for another ‘Small Business Week’ event at Bob and Timmy’s Pizza in Providence.
Filed Under: Press Releases