Assembly hears how SBDC helps startups cross the 'valley of death' and access capital

A second panel at the Assembly hearing focused on innovation and early‑stage company support, with SBDC advisors and founders describing services that help startups bridge the so‑called “valley of death.”

Mark Clough, a tech consultant with Northern California SBDC, explained the valley of death as the stage where prototypes exist but positive cash flow has not been achieved and where many startups fail for lack of runway. He recommended smart, non‑dilutive capital (grants, customer partnerships) and advisor networks that help founders refine financial models and secure manufacturing or contracting partners. Clough presented a firm‑level example: AT Dev, which SBDC helped position for grants and contracts, secured a $3,000,000 seed financing and a $13,400,000 government grant in late 2025, enabling further scale.

Danny Fitzgerald and Ravi Chala (founder of Chakra Technologies) described SBDC assistance with SBIR navigation, pitch competitions, customer discovery and commercialization. Fitzgerald said the network has logged tens of thousands of advising hours for innovators and that, across SBDC‑assisted clients, roughly $2 billion in equity capital was reported — with about 27% of that equity going to women or founders of color in recent years. Chala described how SBDC‑led customer discovery and advising helped secure corporate interest, letters of intent and intern hiring that expanded his company’s capacity.

Lawmakers and panelists discussed common barriers — limited early capital, technical market funding risk, and limited runway for product commercialization — and asked how the Legislature could help create more bridge financing and appropriate incentives. No action was taken at the hearing; panelists asked for continued legislative attention to programs that accelerate transition from prototype to scale.