The Minnesota Department of Economic Development (DEED) announced Friday that it has fully distributed $10 million from the Angel Tax Credit Fund. More than 300 individual investors jumped on the opportunity, and 73 businesses are slated to receive investments stemming from the program, according to DEED.
Established in 2010 to encourage investment in tech-focused startups, the Angel Tax Credit program offers a 25 percent tax credit to investors who contribute at least $10,000 to startups—or at least $7,500 to startups owned by women, people of color, and veterans, or to startups in Greater Minnesota.
The program ended in 2017 when then-Gov. Mark Dayton vetoed an omnibus bill that had included a cash budget for the program. It was brought back this year as part of Gov. Tim Walz’s agenda.
The Legislature allocated $10 million in funds for 2019, and $10 million for 2021. The Legislature didn’t allocate any Angel Tax funds for 2020.
DEED opened applications for the program in July. The agency fully distributed this year’s funds in five months, which is generally shorter than usual.
DEED spokesperson Eric Lightner said that “likely reflects pent up need from there not being a program in 2018, as well as anticipatory demand from there not being a program in place for 2020.”
The biggest investments this year included $4 million in Neptune Botanicals LLC, $2 million in Access Point Technologies EP Inc., $1.5 million to SharpLink Inc., and $1.3 million to Luminary Therapeutics Inc. Minneapolis-based workflow solutions provider Civic Eagle was another beneficiary. (The company was one of three winners in the Metropolitan Economic Development Association’s 2019 Million Dollar Challenge minority entrepreneurship competition.)
Since 2010, the Angel Tax Credit has provided more than $450 million in investment to 430 startup businesses, according to DEED.
DEED will have more details on the impact and distribution of the 2019 Angel Tax Credit funds next week, Lightner said.