From Labs to Grants to Tax Credits
Delaware helps companies grow.
New science and technology companies, like young children, often reach that awkward period when they’ve learned to walk but aren’t quite sure how to run.
With biotech companies, that often means they have moved past the proof-of-concept stage and acquired adequate startup funding, but they can’t find available, ready-to-go wet lab space, nor can they yet afford to build their own.
To help meet this critical need, this past February, Delaware’s Council on Development Finance (CDF) allocated up to $3 million to launch a pilot grant program designed to spur private sector-led projects to expand the inventory of ready-to-go lab space to give startups a place to grow. Shortly afterward, Gov. Carney committed to include more funding for these labs in his annual budget.
“This program will be a great boost to small, early-stage companies who need to now pivot to acquire lab space that they need to grow,” explains Noah Olson, director of innovation for the Delaware Prosperity Partnership (DPP), the state’s nonprofit economic development agency. (More good news for startups in search of lab space: the former DuPont site at Chestnut Run is being redeveloped into Chestnut Run Innovation & Science Park, which will provide lab space and many other crucial amenities for tenant companies.
The ready-to-go wet labs program is only the latest of a network of governmental, academic and business programs and incentives to help Delaware’s innovative companies of all stages grow and further build a large, diverse R&D self-perpetuating community within the area.
THESE MEASURES INCLUDE:
EDGE (Encouraging Development, Growth and Expansion) Grants from the Delaware Division of Small Business. “Companies with fewer than 10 employees who have been in business for less than 10 years can apply for developmental grants of up to $100,000,” says Jessica Welch, the department’s communications director. “The grants are geared to people who have good business ideas, but still need capital.” There are two rounds of grant competition annually, one in March and one in September, with five of these grants awarded each round for STEM companies. Welch says more than $2.75 million in grants have been awarded since the program began in 2019.
Welch further cites two examples of how the EDGE Grant program has given young Delaware businesses a needed boost. “Avkin, which markets medical simulators for health care training, received a grant in 2019 and now has 20 employees,” she says. Resonate Forward, she adds, received $100,000 to help it bring to market a device to help movement in Parkinson’s patients.
Delaware R&D Tax Credits
“This program is focused on early-stage companies,” Olson says, “and provides tax credits that are refunded and not capped and which can be added on top of federal tax credits.” Olson also points out that Forbes magazine has ranked Delaware #2 in terms of which states have the lowest overall cost of doing business. “Add on to this the low personal tax rates that Delaware has, and that makes it easier to attract employees to locate here,” he says.
“This is an annual competition for under-represented business founders — women, Blacks, Latinx, Native Americans,” Olson says.Last year, 10 such awards were made, totaling $275,000 in seed money. “I think it’s important to note that this competition is open to companies both in Delaware, which is the organizers ’focus,” he notes, “but also companies outside of Delaware to help open up a bridge to the Delaware startup ecosystem.
Delaware Business Resource Connection
The Division of Small Business also maintains a web portal (business.delaware.gov/find) that contains information on about 100 different organizations within the state, which operate around 300 different programs that can be of help to small businesses. A business seeking help can filter results by location, needs, industry, stage of business and those resources which focus on supporting disadvantaged business communities.
In addition to these economic programs, there are many other ways Delaware helps to make business grow, including assistance with finding site locations in the state, help with setting up business here and providing a collaborate atmosphere that offers diverse opportunities to network with existing STEM businesses, academic institutions and governmental agencies.
‘Not Something You Could Find Elsewhere’
For example, Olson says a professional site selector connected WuXi STA,a China-based pharmaceuticals company, with the DPP, resulting in WuXi’s commitment to build a new campus in Middletown that is expected to provide 500 jobs by 2026. WuXi was already located in the Philadelphia Naval Yard and looking for someplace to grow, Olson explains, and the state agreed to award the company $19 million in performance-based incentives.
“I’ve always appreciated the business atmosphere in Delaware,” says Charles Saller, who in 1990 founded his firm, Analytical Biological Services (ABS), which has among its customers almost every major pharmaceuticals company worldwide. “I’ve always found working with the Delaware Prosperity Partnership very productive,” he adds— so much so that he is considering doing some positive payback. “We have a little extra space, and we would like to take on one or two small companies that need a little help — not as an incubator, but as add-ons that can fit in with the services we have,” offering a growth opportunity for the smaller firms as well as for ABS.
“Not only is Delaware a great location geographically, but it has a very healthy life sciences ecosystem,” adds Fred Kielhorn, who founded DeNovix, which markets proprietary cell lines, in Delaware in 2012. “It’s the one state where you have good access to local and national politicians. You can attend a bio breakfast, for example, and you may have a U.S. senator or the governor [in attendance too]. I’ve always found that very helpful.”
Franchessa Sayler, founder, president and CEO of ThruPore Technologies, a company that specializes in chemical catalyst development, credits her business’s success to Delaware’s incubative atmosphere, along with the presence of the University of Delaware and organizations such as the Delaware Sustainable Chemistry Alliance (DESCA). And she feels her business is in good company. “In Delaware,” Sayler says, “there are chemical companies of all sizes.”
Olson notes that Delaware’s reputation for being a good place todo business serves as a calling card for businesses wanting to expand or relocate to consider the state. “We get inquiries for people who are thinking of locating to Delaware in a variety of ways,” he says, “including referrals from business partners here that we have helped build out their businesses, and we are well-known to the national consultants who help companies with site selections.”
The state’s Division of Small Business also tries to help new businesses just starting up in the state or relocating here to get settled in. “We have regional managers in each of the three counties, plus one in Wilmington that we can assign companies to,” Welch says. “Many of the founders have never run a business before, so we can help them navigate getting all the permits. After all, we know all the state agencies.”
Surprisingly, the two years of the COVID pandemic apparently did not halt business progress. “It had an interesting effect,” Olson says. “We expected things to slow down, but we had 18 projects with various businesses close last year, more than we normally have completed in an average year.”
The pandemic also produced a particularly interesting example of how the state’s smallness can be a blessing. Incyte is a 20-year-old Delaware-based pharmaceuticals company with annual sales of about $2.7 billion, and, as with other companies big and small, CEO Hervé Hoppenot says Incyte didn’t anticipate the suddenness of the first lockdown order in March 2020.“
We immediately found ourselves in need of reagents and needed some assistance,” he says, “so we started exchanging messages about what we could do with [U.S. Senator] Chris Coons, the ChristianaCare cancer center people and Governor Carney. That aspect of Delaware is something rare — not something you could find elsewhere.