July 14, 2025

The state of South Dakota is committing $1 million to establish a revolving seed fund for early-stage tech startups.

The program was approved recently by the South Dakota Board of Economic Development, beginning with a $500,000 SD Works Legacy loan to Elevate Rapid City to establish a fund for western South Dakota. The remaining $500,000 “is expected to be awarded to an East River partner soon,” according to a statement from the Governor’s Office of Economic Development.

The fund will focus on innovation-based businesses that often struggle to access traditional financing, particularly in their earliest stages. Many of these startups are still in the pre-revenue or early revenue phase and need flexible capital to get off the ground, the state said.

“South Dakota’s tech sector is our fastest-growing industry. We want to make South Dakota the best place in the country to start and grow a business, especially in emerging technology,” Gov. Larry Rhoden said. “This kind of support gives entrepreneurs a real shot at success and proves once again that South Dakota is ‘Open for Opportunity.’”

The fund will provide early investments with the goal of building a long-term, self-sustaining pool of capital for South Dakota startups. It follows a similar approach to GOED’s COVID disaster loans, which had strong performance and very low default rates, according to the state.

“We’re excited to partner with Elevate Rapid City on this effort to support early-stage startups,” GOED Commissioner Bill Even said. “This program helps close a real gap in South Dakota’s financing landscape and gives more entrepreneurs the chance to grow their business here.”

Elevate Rapid City and the future GOED partner in eastern South Dakota will manage their portions of the fund, helping get financing to businesses that fit the program while supporting startup activity.