Last week we launched a new Connecticut Innovations initiative, the Angel Investor Tax Credit Program, which is aimed at helping small businesses in Connecticut by stimulating investments in them by angel investors. The program, administered by CI on behalf of the state of Connecticut, was created by Public Act 10-75, An Act Concerning the Recommendations of the Majority of Leaders’ Jobs Growth Roundtable, which was signed into law on May 6.
Under the program, eligible angel investors may take a credit against Connecticut state income tax for certain investments made in qualifying businesses. Investments must be at least $100,000, and the tax credit equals 25 percent of the cash investment, up to $250,000. You may find additional details about the program at the newly launched Web site www.ctangeltaxcredit.com.
Coincidentally, I recently came across a VentureBeat article in which one of Boston’s top angel investors, Will Herman, shares some investment guidelines for would-be angels. It is evident that he is enthusiastic about being an angel investor and, with over 60 angel deals under his wings, he’s got plenty of wisdom to share.
“I invest because I have a blast doing it,” says Herman. “It’s about 75 percent of the fun of running the company yourself with only 5 percent of the stress. I get to meet smart, energetic people with great visions and boundless energy.”
Here is a link to his VentureBeat article “Guidelines for potential angel investors.”
Peter Longo
President & Executive Director
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This post was written by admin on July 19, 2010
Peter
Connecticut’s commitment to entrepreneurs is a great step in the right direction. One consideration is that experienced angel investors already invest – would a somewhat mitigated risk make them invest more?
Something tells me if there’s an investment opportunity which looks somewhat dubious – a tax deduction on its own is unlikely to tip the scales – but what I think this new adventurous approach could do (if bundled with the right information and support) is to encourage new people to become angel investors – this is especially possible given the lack of performance in other investment tools.
Now is the time for new would be angels to take a look at investing in Connecticut startups and now is the time for Connecticut to bring this approach together with the right support to increase the chances of startup success.
This new approach becomes really worthwhile if it encourages new people to become first time angel investors in Connecticut startups and young businesses. But it will become really powerful if brought together with the right expertise, information and support.
Andrew
Andrew, I agree with your comments. The hope is that some of the “would be angels” join one of the already existing angel groups in CT. These groups, such as the Angel Investor Forum, are very well organized and very capable of performing due diligence on these type of opportunities. Thank you for your comments.