This could be the answer to a maiden’s prayers – if you happen to be a tech company developing an innovative use of broadband and you want free (non- dilutive) equity.  Buried deep in the bowels of the new stimulus law (a/k/a American Recovery and Reinvestment Act of 2009) is an allocation of at least $250 million for innovative uses of broadband for sustainable adoption.  The gist of it is as follows:

• The money will be made available right away – starting in May (we think)

• The money will be mostly in the form of grants – that is nondilutive equity

• The money can fund up to 80% of a project – you get free 4 to 1 leverage

• The amounts in the dedicated Innovation Fund likely will be in the single digit millions per grant in order to spread the money around.

• The money will be available to private companies – VC financed tech companies are eligible

• The projects must involve an innovative use of broadband – such as in the healthcare, education or public safety (but it also could be other broadband- related spaces)

• The companies need to be credible – if you have some VC or other investment you may be in the zone

• The NTIA is not just looking for big companies – quite the contrary,  innovation is key to this dedicated pool of available funds

• The process of getting a grant will require satisfying criteria such as that your project meets acceptable innovation and implementation thresholds

For more on this subject, see our firm’s client alert, “Stimulus Law has at least $250 million available for technology companies developing innovative, sustainable adoption of broadband services.”