Senator Heidi Heitkamp United States Senator for North Dakota

Press Releases

Mar 02 2016

Heitkamp Introduces Bill to Boost Innovation, Startups in Rural States

Senator’s Bill Works to Address Unique Challenges for Startups in Rural States by Providing Early Stage Funding to Help Businesses Grow; ND Has the Third Highest Startup Activity in the Country

WASHINGTON, D.C. – U.S. Senator Heidi Heitkamp today introduced a bill to address challenges facing startups in North Dakota, as well as other rural states and small cities, by helping them get the early stage funding they need to grow their businesses.

Last year, nearly a third of startups in the Fargo-Moorhead area identified early stage funding, known as seed funding, as the greatest challenge to growing their business, with entrepreneurs most often turning to friends or family for early investments. Heitkamp has heard from many in North Dakota’s startup community across the state that the largest barrier for would-be innovators, particularly those in small and rural communities, is the lack of means or resources necessary to turn their ideas into results. In 2015, North Dakota had the third-highest startup activity in the country, but too often, startups can’t access the small amount of funds that are frequently necessary to get their businesses off the ground.

Heitkamp’s Startup Entrepreneur Empowerment Delivery (SEED) Act would seek to alleviate part of that challenge by creating a federal pilot program granting up to $120,000 in federal funds to ten small cities across the country which would be awarded to startups in the communities. By investing in communities across the country with populations of 200,000 or less, Heitkamp’s bill aims to identify and promote the innovative ideas that are emerging in more rural communities throughout the country between New York and Silicon Valley.

“North Dakota is rich with energy resources, and we’re rich with job growers and innovators, too,” said Heitkamp. “Startups aren’t just in New York or California as we’ve seen tremendous growth and innovation throughout North Dakota as well – in our cities, universities, and incubators. When the head of the U.S. Small Business Administrator joined me in North Dakota last summer, we were both blown away by the sheer talent and dedication of the state’s entrepreneurs in a variety of fields. But too often, we heard the same challenges from startups and small businesses that they are trying to fit a square peg into a round hole – meaning they run into the barrier of not being able to qualify for support because they’re asking for too little funding. We can’t let these innovators slip through the cracks. With my SEED Act, we can invest in small cities, like Fargo, in rural states, like North Dakota, helping drive startups to success. Just like anyone from a small or rural town, we know how to make a little go a long way – and this bill will help make that possible.”

“Starting a business in college instead of going to class is not what my mom had in mind for my experience at NDSU – but I knew when we started developing Myriad Mobile that we had something that could innovate and unite our community,” said Jake Joraanstad, CEO of Myriad Mobile and co-founder of Emerging Prairie in Fargo. “And that’s exactly what happened during Fargo’s 2011 flood, when an app we created allowing folks to get synthesized, up-to-date information about the flood quickly caught the attention of our local media, and then local businesses began hiring us in the area. And as a student without the financial, family, or part-time job obligations of many of my startup colleagues – I could commit to fulfilling those contracts. But too many startups in the Fargo community don’t have that luxury, and often need a small amount of funding to offset their financial obligations so they can develop and market their products, hire workers, and grow their business. That’s why Senator Heitkamp’s SEED Act is so needed – by providing the small seed funding investments to cities, we can encourage innovators to start and grow their businesses locally – creating new startup hubs in cities like Fargo and in states like North Dakota.”

Click here to read quotes from supporters of Heitkamp’s SEED Act.

Heitkamp’s bill establishes a one-year federal pilot program designed to help startups in small cities and rural states access small amounts of needed funding for marketing – which 55 percent of startups in Fargo identified as the area where their business is most lacking – as well as infrastructure, recruitment and hiring resources. Her bill directly addresses the problems she heard from business and startup leaders this summer, when she brought Cabinet Member U.S. Small Business Administration (SBA) Administrator Maria Contreras-Sweet to Fargo for the first U.S. Senate Committee on Small Business and Entrepreneurship field hearing in North Dakota. At the hearing, Heitkamp spoke with local entrepreneurs about the roadblocks they often face in obtaining the small funding they need to start or grow their businesses, as that amount is often too small for them to qualify for federal support. Throughout the past year, Heitkamp has been meeting with leaders in the startup community across the state to better understand their needs and concerns.

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Contact Senator Heitkamp's press office at press@heitkamp.senate.gov