Four years ago, local manufacturing startup ASi was riding high, the first ever $1 million prize winner of the state-funded 43North business plan competition.
Now, the company is in financial trouble.
It’s not currently operational, has just one employee – the founder and CEO – and recently defaulted on a $250,000 loan from the Erie County Industrial Development Agency.
In exchange for the prize money, 43North takes a 5 percent stake in each winning company. 43North officials say the struggles of one company, even a winner of the $1 million – the largest prize offered – don’t reflect the track record of the competition’s broader portfolio of winners.
“We’re in this for the long haul and we’re happy with the returns we’ve seen,” said Nate Benson, a spokesperson for 43North.
The IDA’s lending arm approved the $250,000 loan for ASi in 2015, under a federally-funded program for high-risk business loans. At the time, the company anticipated hiring 15 new employees.
The loan was restructured several times, in an effort to help the company stay afloat and ASi made just over $22,000 in payments, an IDA spokesperson said, adding that the company struggled after several contracts failed to materialize.
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