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The membership of the National Association of Seed and Venture Funds (NASVF) commends thoughtful application of lessons learned in modeling the Angel Investment Tax Credit legislation. We believe that tax credit for investing in qualified early stage companies is crucial to enhancing the local and regional entrepreneurial business environment. Clearly, Wisconsin Act 255, which provides tax incentive for investors in early stage companies, has helped to create a healthy angel community, which helps sustain that region’s innovative early-stage companies. Every effort should be made to take advantage of lessons learned from this legislation, in order to build effective tax policy that helps sustain local and regional economic improvement on a national basis.
We urge a comprehensive legislative initiative regarding angel investor tax credits, with specific attention to the areas of immediate behavioral reward, venture eligibility, and investment eligibility.
Immediate behavioral reward
Incentives must reward changed behavior, and to benefit our current economy, that behavior must change immediately. The incentive to invest in early stage companies must be one that encourages immediate action. To do that, the incentive must have an expiration date and be of a high enough value to warrant action. We recommend a five-year term on the credit, with a three-year carry forward/ carry back provision. A 25 – 30 percent credit for the total investment would illicit action, and the investment should be held for three years or the tax credit could be recaptured (with the exception of a liquidation of the business). Alternatively, a 10 percent credit awarded every year for the first three years of investment would assure patience in exiting and multiple years of capital investment.
Venture eligibility
Care should be taken to define the types of ventures that would be eligible for the investor to receive the credit. We recommend qualifying such ventures as per the exclusion 1202 (e) (3) in the IRS code, as well as excluding ventures that are shell companies, real estate or life style businesses.
Investment eligibility
Legislation should also define how the investment funds may be used if they are to qualify for a tax credit. We recommend excluding investments to repurchase or redeem shares, funds invested by family members, and capping investments to $2 million per taxable year and with a maximum in any one venture capped at $1 million.
Supporting and encouraging angel investment will allow local businesses to create high-skill, high-wage jobs, resulting in a positive economic impact in local and regional communities. We support proper legislation that rewards immediate investing in qualified early-stage ventures.
NOTE: you can comment on this article on the NASVF website by clicking here.
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Member Spotlight
Automation Alley presents economic stimulus ideas to Obama’s Forum on Jobs and Economic Growth
Automation Alley's executive director, Ken Rogers, represented Michigan's largest technology business association at President Obama's Forum on Jobs and Economic Growth as a guest of Congressman Gary Peters. Rogers discussed with Elizabeth Vale, White House Business Council and Senior Advisor to Commerce Secretary Gary Locke, a variety of ways to stimulate today's economy, foster job creation and the need to increase credit for companies.
NASVF member Automation Alley is a technology business association, founded in 1999, to drive the growth and image of Southeast Michigan's economy through a collaborative culture that focuses on workforce and business development initiatives.
Read More Here
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KTEC - Open Position
FEDERAL RESEARCH FUNDING SPECIALIST sought to provide professional management counseling and technical business assistance to early-stage Kansas companies in the area of SBIR/STTR and technology commercialization, administer and monitor any related programs for participants, coordinate periodic training seminars and workshops, and provide mentoring and intermediary services for businesses with federal agencies and federal laboratories.
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Calendar of Events
Details to come.
The WBTshowcase is the nation's premier event showcasing the largest collection of vetted and mentored companies and technologies emanating from top universities, labs, research institutions, and the private sector from across the country and around the globe.
The 2010 AUTM Annual Meeting will take place March18-20 in New Orleans at the Hilton New Orleans Riverside. The meeting is a three-day educational conference that draws from the global community of technology transfer professionals, researchers and other intellectual property experts. The Annual Meeting features 12 educational tracks and 60 interactive workshops developed for seasoned technology transfer professionals and newcomers to the field.
View the NASVF Calendar Online
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