DED suspends $1.2 million grant to Nebraska Startup Academy after reports of mismanagement

The Nebraska Department of Economic Development has suspended its $1.2 million grant to the Nebraska Startup Academy, a startup support nonprofit led by much of the same leadership team as MOVE Venture Capital, according to Silicon Prairie News (SPN), which obtained a copy of the suspension notice from the agency. The grant comes through the North and South Omaha Recovery Grant (NSORG) program, managed by DED to support job creation, business development and economic revitalization in historically disinvested parts of Omaha. NSA was awarded the funding in early 2024. DED had already stopped disbursing the grant in December 2025 because of grant reporting issues. Under the suspension, NSA cannot use state grant funds for any expense without written permission from DED. The state grant makes up almost 90% of NSA's total funding.

DED cited mismanagement of grant funding, undisclosed conflicts of interest and concerns about the reasonableness of expenses, including $1,100 for office furniture and about $54,000 for professional development and travel. The suspension came hours after the Nebraska state auditor's office released a preliminary review of the grant. The auditor found that NSA's 2022 application projected more than 300 jobs over three years, but the nonprofit created just four jobs across 2024 and 2025. The report also said NSA significantly underreported revenue, improperly handled grant funds and has serious conflicts of interest. Board members and employees who oversee MOVE's investment funds had business relationships that NSA did not disclose in its 990 filings. Over 80% of the nonprofit's funding went to payroll. The auditor said NSA's employment reporting appeared to be inaccurate, inflating the apparent impact of its work. The report indicated the nonprofit may have violated the state's abuse of public records law and may be eligible for revocation of its tax-exempt status and termination of its NSORG grant.

According to the auditor's report, NSA commingled grant funds with other money by transferring the dedicated NSORG account balance into other accounts, which violates the grant agreement with DED. In 2024, NSA received a $600,000 grant tranche but told DED it had about $180,000 in revenue, while its 990 reported roughly $770,000. Executive Director Charlie Cuddy was paid almost $240,000 in 2024 and $150,000 in 2025, according to NSA's nonprofit records. DED said it prefers curative measures but reserves the right to pursue termination or recoupment.

NSA disputed the auditor's characterization. In a three-page statement it said it takes the concerns seriously, denied any conflict of interest with MOVE, and said it initially reported 15 direct and 31 indirect jobs for 2024 and 2025 before resubmitting figures of two direct and two indirect jobs after the auditor's review. It said its annual report's figure of more than 300 jobs reflects growth among supported startups rather than jobs created directly by NSA. Cuddy said he had not been notified of the suspension and cited DED staffing reductions and reporting inconsistencies. NSA said reimbursements have been pending for more than nine months. State Sen. Margo Juarez commented that fund abuse is unfortunate and that the governor must ensure efficient state operations. Scott Henderson of NMotion had earlier raised similar concerns on LinkedIn before deleting the post. Invest Nebraska, which has subcontracted NSA and co-invested with MOVE, declined to comment.