Shutdown Harms Some Start-Ups Seeking Investments
The state government shutdown has affected innumerable companies in many different ways. For start-ups looking for investments, the shutdown means they're unable to sign up investors who could benefit from Minnesota's angel tax credit program.
The program gives a 25 percent tax break to individuals and investment funds that provide seed money to businesses focused on technology.
During the shutdown, which began on Friday, companies haven't been able to sign up investors for the program, according to a report by the Star Tribune.
Scott Hughes, president of Blaine-based waste-management technology supplier Visiam, told the Minneapolis newspaper that he has talked to three investors who are committed to giving the company a total of $200,000 but are waiting to invest until they can sign up for the tax credit program.
Margaret Anderson Kelliher, president and CEO of the Minnesota High Tech Association, told the Star Tribune that the shutdown could result in investments moving out of the state to other places with similar tax credit programs.
In 2010, the tax credit program produced 47 jobs and spurred $28 million in funding for 67 of the state's companies, according to data from the Minnesota Department of Employment and Economic Development.
The state recently announced several changes to the angel tax credit program that are meant to make it easier for companies to participate. And the Minnesota Angel Network, a new resource aimed at connecting angel investors with start-ups, launched earlier this year.