$12M in 2012 Angel Tax Credit Funds Almost Gone
More than two-thirds of the $12 million in angel tax credits that’s available this year has already been allocated—and the remaining $3.3 million in credits will likely be gone by the end of summer, according to a report released Monday by the Minnesota Department of Employment and Economic Development (DEED).
The Angel Tax Credit Program gives a 25 percent tax break to individuals and investment funds that provide between $10,000 and $4 million in seed money to businesses focused on high technology or new proprietary technology.
In the two years since its inception, the program has attracted more than $126 million in private investments for small and emerging companies in the state, according to DEED. This year alone, 100-plus businesses have received funding from more than 314 investors and 15 angel funds.
Businesses that have attracted the greatest portion of funding are software, medical device, and biotechnology firms.
“The Angel Tax Credit Program has been a tremendous help for promising businesses that need access to funding during the early stages of their development,” DEED Commissioner Mark Phillips said in a statement. “Some of these businesses could become Minnesota’s next high-tech success story, providing lucrative opportunities for the state’s work force and economy.”
The state will fund $12 million in angel tax credits through 2014, and credits cannot exceed $125,000 per person per year. Last year, the credit spurred $63.1 million in funding for 113 Minnesota start-ups.
The angel tax credit is available to investors and investment funds that funnel money into start-ups that are less than 10 years old, have fewer than 25 employees, and have less than $4 million in previous equity investments. The businesses also must be headquartered in Minnesota and have at least 51 percent of their workers and their full payroll based within the state.