The Texas Emerging Technology Fund

In June 2005, Governor Rick Perry signed House Bill 1765, creating the $200 million Texas Emerging Technology Fund (ETF).  In June 2007, the fund was renewed for an additional two years, through August 2009.

The goals of the Emerging Technology Fund are to:

• Expedite innovation and commercialization of research,

• Attract, create or expand private sector entities that will promote a substantial increase in high-quality jobs, and

• Increase higher education applied research capabilities.

Among the eligible emerging technology industries are semiconductors, information, computer and software technology, energy, manufactured energy systems, micro-electromechanical systems, nanotechnology, biotechnology, medicine, life sciences, petroleum refining and chemical processes, aerospace and defense. Other emerging technology areas may also be eligible for funding.

Emerging technology industry participants are eligible for funding if the activity:

• Has the potential to result in a medical, scientific or clean energy breakthrough,

• Has meaningful collaboration with a Texas university, and

• Will result in the creation of high-quality new jobs in the state (immediately or over a longer period).

The ETF provides funding for incentives for private and non profit entities to collaborate with public or private universities on emerging technology projects with a demonstrable economic benefit to the state.  Regional Centers of Innovation and Commercialization have been assigned by the State (regional map). The seven RCICs will provide:

• Applied Research & Development activities,

• Commercialization of the applied R&D,

• Incubators for new business and expansion of existing business resulting from applied R&D, and

• Workforce Training for business resulting from the applied R&D.

The Governor has appointed a 17 member ETF Advisory Committee, composed of individuals who are industry leaders in the state or who are nationally recognized researchers from public or private institutions of higher education in the state. The committee reviews proposals for all three funding areas and makes recommendations to the Governor, Lt. Governor, and Speaker of the House.

The fund is divided into three main areas of interest (projected funds to be distributed in each area, on a quarterly basis over two years):

• Commercialization Awards - 70% ($130M)

• Research Grant Matching Awards - Subchapter E - 10%

• Research Superiority Awards - Subchapter F - 20%

The Gulf Coast RCIC only accepts applications for Commercialization Awards.  Applications for Research Grant Matching and Research Superiority awards are submitted directly to the Governor's office.

Commercialization Awards - 70% of available funds

Projects eligible for Commercialization grants:

• involve emerging scientific or technology fields that have a reasonable probability of enhancing the state's national or economic competitiveness,

• may result in a medical or scientific breakthrough, or a breakthrough in clean energy technologies,

• must be collaborative with Texas universities,

• must have a defined project scope, a defined commercialization path, and a complete business plan,

• commit to raising matching equity investments, and

• will have a demonstrable economic impact to the State

For-profit companies that have raised less than $500,000 in prior equity investments are qualified to apply for a Pre-Seed Commercialization Award of up to $250,000.  These businesses may be earlier stage companies, with less mature management teams and business plans.  The State will reserve $1,000,000 of ETF funding for Pre-Seed awardees.  The awardee will receive up to $250,000 for an initial project, and upon project completion can request their remaining ETF funding.  The first $500,000 received in ETF funding may be in the form of convertible debt.  Businesses receiving Pre-Seed Commercialization Awards may have up to 30 months to raise matching funds from qualified investors.

Applications for Commercialization awards (including Pre-Seed) are submitted to one of the seven RCICs.  The RCICs will review all submitted applications, and select the applications that will be submitted to the ETF Advisory Committee for consideration.

Research Grant Matching Awards - 10% of available funds

Priority for research grant matching awards shall be given to proposals accelerating commercialization into production by targeting programs that:

• address federal or other major research sponsors' priorities in emerging scientific or technology fields

• are interdisciplinary

• are collaborative

• are likely to result in a medical or scientific breakthrough, or a breakthrough in clean energy technologies

• will have a demonstrable economic impact to the State

Research Grant Matching Awards can only be given to a Consortium, with the application submitted by a non-profit or Texas university member of the Consortium.  The Consortium must consist of at least 3 entities that are for-profit businesses or Texas universities:

• at least one Texas university.

• at least one for-profit business, involved in commercializing the project's technology.

The ETF will match federal, foundation or corporate grants.

Applications for Research Grant Matching Awards are submitted to the Governor's office, by a non-profit business or Texas university, serving as the fiscal agent on behalf of the consortium.

For more information, visit the Governor's website.

NOTE - For-profit businesses with federal grants cannot apply for a Research Matching Award.  Instead, for-profit businesses are encouraged to apply for a Commercialization Award.  The federal grant for the technology being developed will satisfy the "independent technology validation" requirement for a Commercialization Award.

Research Superiority Awards - 20% of available funds

These awards shall be used to acquire new or enhance existing research superiority (talent) at public institutions of higher education in the state.  Public institutions of higher education may submit proposals to the State ETF Advisory Committee for:

• creating new research superiority

• attracting existing research superiority from institutions outside of the State

• enhancing existing research superiority by attracting from outside the State additional researchers and resources

For more information, visit the Governor's website.