Startups and small tech companies are at the heart of our vibrant ecosystem in Massachusetts. While still in its early phase, the economic impact of COVID-19 is having a significant impact on start-ups and small businesses in Massachusetts. As the state’s largest tech organization, MassTLC has come together with our national counterparts to help our start-ups and small businesses get the support they need as they seek to ride out this storm.
MassTLC joined forces with TechNet to advocate that the newly enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act be updated to clarify that venture-backed start-ups be included in this important legislation. We further engaged our network of tech councils across the US to help build a coalition and lend support in urging the Administration to take immediate action to ensure startups and small tech companies can access emergency relief under the bill. Overall, the letter was signed by 126 organizations across 39 states.
The CARES Act was drafted to provide relief to small businesses, defined as having fewer than 500 employees. However, due to the Small Business Administration’s (SBA) addition of “Affiliation Rules,” many of these companies will be required to aggregate the employees of unrelated companies in which their investors are affiliated and count them in their employee count, pushing many above the employee size threshold, and out of eligibility for these funds. Clarifying and correcting this detail is essential to the health and well being of the tech economy.
According to MassTLC’s State of the Tech Economy report, one in eleven jobs in Massachusetts is in tech, and, as a whole, tech underpins 35% of Massachusetts GSP. If our equity-backed startups and small tech businesses are unable to access CARES funds, they will be forced to let employees go, which will have a negative impact not just on their company, but on every company that is underpinned by tech in Massachusetts and across the nation, including restaurants, retailers, and real estate brokers.
MassTLC will continue our support and advocacy on behalf of the tech industry throughout this crisis. Let us know if you need assistance by emailing firstname.lastname@example.org. You can also refer to our COVID-19 Resources page for up-to-date information and local and federal resources.