A Startup Wisconsin survey of 70 high-growth startups in the state found that many companies who applied for federal COVID-19 relief programs did not receive funding.
The report revealed that only 33.3 percent of startups surveyed that applied for a Small Business Administration Economic Injury Disaster Loan actually received funding, according to the survey conducted by Matt Cordio, Startup Wisconsin president.
Meanwhile, 42 percent of the startups surveyed that applied for a Paycheck Protection Program loan received funding. Startups who applied but did not receive funding reported being ineligible due to a lack of payroll, according to the survey.
The startups surveyed employ a total of 600 employees with an average headcount of 8.5 employees per startup. Only 25 percent of startups surveyed felt confident that federal funding would be enough to support and sustain themselves through the economic impact of the pandemic.
Of those surveyed, 87 percent are startup founders while 13 percent are executives at high-growth Wisconsin startups. Startups who responded to the survey serve industries including health care, business-to-business software, professional services, manufacturing, and biotech.
While 47 percent have not changed hiring plans due to COVID-19, 21.8 percent froze hiring, 18.8 percent reduced workforce, 5.8 percent are hiring more full-time employees and 5.8 percent are hiring less full time workers than planned, according to the survey.
Entrepreneurs and executives surveyed offered ideas for state and local leaders tasked with reviving Wisconsin’s innovation economy. Those ideas include tax credits, grants or loan programs that lead to more investments in high-growth companies.
Survey respondents also suggested implementing programs and policies that incentivize large companies and government agencies to purchase products and services from local high-growth companies. Safely reopening the state’s economy as soon as possible was another suggestion, according to the survey.
“Taking bold action and implementing programs and policies that enable Wisconsin’s high-growth companies to emerge stronger from the COVID-19 pandemic will pay long-term dividends to the state’s economy,” Cordio said. “It is critical that state and local officials allocate some of the $2 billion Wisconsin will receive from the CARES Act to bolster the state’s innovation economy.”
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