The
Minnesota Angel Tax Credit Program recently celebrated its second birthday, and boasts some impressive numbers for a two-year-old.
Since its launch in July 2010, the program has attracted more than $126 million in private investments for small, entrepreneur-led companies in the state. According to Mark Phillips, Commissioner for the
Minnesota Department of Employment and Economic Development (DEED), over 100 businesses have received funding in 2012 alone. Companies attracting the most attention from investors and angel funds tend to be software, biotechnology, and medical device firms.
The program has been a tremendous help for promising businesses, Phillips believes. Some of the companies earning funds could be the state's next big high-tech success stories, leading to job growth and a more robust local economy.
Run by DEED, the program provides incentives to investors or investment funds, steering them in the direction of putting money into emerging companies, particularly those focused on high-tech endeavors. The Angel Tax Credit gives investors a credit of 25 percent for investments of at least $10,000, and the past few years have shown that plenty of investors are eager to take advantage of that incentive while helping to get innovative companies off the ground.
Over two-thirds of $12 million in tax credits allocated for this year have already gone out, Phillips noted, and DEED expects the remaining credits of about $3.3 million to be allocated by the end of August.
The program is slated to continue operation through the end of 2014, and if everything works as DEED expects, close to $236 million will have been invested in Minnesota high-tech startups by the time the program ends.
Source: Mark Phillips, Department of Employment and Economic Development
Writer: Elizabeth Millard