Partner leaders spoke about the value their organizations provide to the state and why they should be restored to historic funding levels, rather than the lower level of funding they have received since the last recession.
Speaking at the hearing:
• Chad Paul, president and CEO of the Ben Franklin Technology Partners of Northeast Pennsylvania;
• Steven Brawley, president and CEO of the Ben Franklin Technology Partners of Central and Northern Pennsylvania;
• Richard Lunak of the Ben Franklin Technology Partners of Southwestern Pennsylvania;
• Scott Nissenbaum, chief investment officer for the Ben Franklin Technology Partners of Southeastern Pennsylvania
In the 2007-2008 budget, the state shrunk the agency’s funding from the $28 million it had been receiving by nearly 50 percent to $14.5 million per year. The lower level of funding has been what the partners have received since then and is what has been allocated to them in Gov. Tom Wolf’s current budget proposal.
What the agency leaders said was that they’re not just looking for handouts. They are offering something in return.
Money the state gives to Ben Franklin is leveraged against private investment sources to grow tech businesses in the state, which go on to earn money and return that investment to Ben Franklin.
For example, for every $1 Pennsylvania invests in Ben Franklin’s program, it generates $3.90 cents in state tax revenue.
“This is a revenue line item in the state budget in the long term,” said Nissenbaum.
Since it began, Ben Franklin has invested in more than 4,500 technology-based companies and boosted the state economy by more than $25 billion, helping to generate 148,000 jobs through investments in client firms and spinoff companies in Pennsylvania. It has also provided, what they described as thousands of hours in business development support and networking opportunities.
Paul said that Pennsylvania has been a leader in tech development for more than 30 years and he considers their program to be the “gold standard” in the country, and one that is often mimicked by other states.
“We’ve been a reliable source of funding and a reliable source of networking and connections to help entrepreneurs succeed in ways they couldn’t get in other states,” said Paul.
But in the meantime, those other states have been catching up and putting more funding into early-stage technology companies to help them grow into larger companies that bring family-sustaining jobs to the community.
“Pennsylvania doesn’t want to lose what it has already invested in,” said Paul.
“In today’s economy this program is more important than ever,” said Lunak. “Entrepreneurs are more mobile and can go anywhere. This is about investing in the best companies for Pennsylvania in the future.”
Brawley emphasized the value of the education and support Ben Franklin provides startup companies when they first approach the offices for help.
“Most entrepreneurs don’t come to us with a full team of people,” Brawley said. “We really have to put in thousands of hours helping them with their human resources, helping them set up quick books, helping them get set up with a trade show and talking to customers and investors.”
And that takes money.
The men were hoping to get funding restored to pre-recession levels, saying it’s been increasingly hard to provide the full level of services they’re known for on such a tight budget.
If they don’t get more funding than they’ve received over the past several years, they cautioned it could jeopardize some of the programs they’ve running and the amount of investments they make in startup companies.
That, they said, could put Pennsylvania at a competitive disadvantage with other states that are funding tech development.