Millions In Minnesota Angel Investor Tax Credits Free Up For 2016

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angel-tax-seal-minnesotaThe Minnesota Angel Tax Credit has an additional $5.1m in funds available as of tomorrow.

Minnesota’s Angel Tax Credit provides a 25-percent credit to investors or investment funds that put money into qualified startup companies; residents of other states and foreign countries are eligible.

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Millions Are Flowing Through The AITC Into MN Tech Startups This Year

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Redpath3A group of Minnesota tech startups chalked up some ~$7.6m in funding so far this year, according to newly released data from the Department of Employment and Economic Development about the Angel Investor Tax Credit Program (AITC).

19 unique ventures saw their accredited investors take a combined $1.9m in deductions credits for 25% of their qualified investment made between Jan-March, 2016.

For 2016, $15.5 million in credits is available, $7.5 million of which is reserved until Sept. 30, 2016, for minority- and women-owned businesses, as well as businesses located in Greater Minnesota. As of 4/11/2016, $7.0M remains available for these businesses and $3.8M remains for general businesses. By this measure, $4.7M in credits have been used. Here’s the tech portion so far:

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Minnesota’s angel-investor tax credits are all gone

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By Katharine Grayson, Minneapolis-St. Paul Business Journal

“Minnesota’s $12.2 million pool of angel-investor tax credits ran dry Monday. The program, which offers income-tax credits to investors in Minnesota startups, ran out of funds earlier than any year since launching in 2010. In 2013, the state allocated all of its $12.7 million in credits by May 9. The angel-tax credit program will expire this year unless the Legislature extends it this session.”

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Time to get in line for 2014 Angel Tax Credits

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freemoneyAs of this week — Minnesota tech startups, investors and funds looking to get a jump on 2014 can submit their applications for a crack at some $12m in Minnesota Angel Investor Tax Credits (AITC).

Passed in the spring of 2010 as part of the broader Jobs Bill ( H.F. 2695), the AITC provides tax incentives to investors or investment funds that put money into startup and emerging companies focused on high technology or new proprietary technology:

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Changes to the state’s angel tax credit program

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By Wendy Lee, Star Tribune

“A Minnesota program that offers tax credits to angel investors has made its requirements more flexible, due to changes recently approved by the governor and the state legislature.

The program gives qualified individuals a 25 percent tax break on their investments of $10,000 or more in Minnesota start-ups. There are three major changes to the program, said Monte Hanson, spokesman for the Department of Employment and Economic Development.”

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Minnesota software startup finds $50k under Angel Tax Credit, maybe more?

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Led by $50k in equity capital,  Minneapolis Biomass Exchange (MBioEX) recently signaled that it has initiated an equity fundraising round of “indefinite” size.

MBioEX is a Minneapolis-based software startup which has developed an online exchange for animal bedding, livestock feed, renewable energy, and the biopharma markets. Biomass feedstocks such as corn cobs/stover, dedicated energy crops, hays/alfalfa, wheat straw and wood chips/residues can be sold through MBioEX’s proprietary platform.

“We may raise more funds as part of this offering, but it is unknown at this time,” says a note from CEO Kevin Triemstra on the new filing, which commenced on September 9th, 2010.  The company was one Minnesota’s first software technology companies to receive certification under Minnesota’s new Angel Investor Tax Credit and DEED has confirmed that 25% of the $50,000 raised (thus far) has been allotted to the investors side in the form of a tax credit.

Last month, it was reported that Doug Cameron and Rajesh Aggarwal had joined the MBioEx board of directors.

Video of Angel Investor Tax Credit panel with liveblog and resource links

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via Minnesota High Tech Association

Bright (hot) and early Monday morning, hundreds gathered at the ADC auditorium in Eden Prairie for  a comprehensive panel discussion centered around the recent passage of the Angel Investor Tax Credit.

Commissioned by MHTA and moderated by Joy Lindsay, this insightful event featured personal appearances from Senator Kathy Saltzman and Representative Tim Mahony – two congressional forces that helped shape and pass this monumental legislation.  The panelists, all well-versed on the topic, included: Dan McElroy, John Alexander, Dan Mallin and Jay Hare.

Kudos to the tech entrepreneurs who took advantage of the free admission to gain firsthand knowledge into this beneficial new tool for startups.

Watch the video, find resources and review the liveblog.

Ten things you need to know about Minnesota’s angel tax credit + resources

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By Thomas Lee, MedCity News

“Battle-weary proponents of Minnesota’s historic $60 million angel tax credit had a simple message for the state’s entrepreneurial community:

Now that we passed the darn thing, you better use it!

“We’ve passed the baton onto you,” Sen. Kathy Saltzman (D-Woodbury) told the audience who gathered in Eden Prairie Monday to learn about the tax credit.

“Make good use of it,” said Rep. Tim Mahoney (D-St. Paul)”

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Resources:

  1. Final legislation text
  2. MOJO guide
  3. DEED’s overview (application window said to open before 8/1)

MHTA Angel Tax Credit Panel

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By Steve Borsch, Minnov8

“Join the Minnesota High Tech Association on Monday, May 24 at the ADC Auditorium for MHTA’s Angel Tax Credit Panel.

Registration:  7:30 a.m.; Program:  8:00 – 9:30 a.m.

The Angel Tax Credit Panel will feature an outstanding line-up of panelists who will discuss the recently enacted 25% tax credit for angel investors who invest in Minnesota high tech start-up companies.”

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So the Angel Tax Credit passed-but what does that mean and what’s next? Unmask the VC #6: John Alexander

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John Alexander, Twin Cities AngelsSince April 1st, many entrepreneurs and investors alike have been asking all the right questions: what exactly does the passing of the Angel Tax Credit imply from the tax & accounting perspective? And what happens next? What does it really mean for Minnesota?

Updated 4/19/10: added – MOJO Gude to AITC

Updated July: DEED/Angel site goes live!

Join us for a behind the scenes perspective on the experiences from one Minnesota Angel Investor who has been advocating Minnesota Angel Tax Credits for the past 9 years.  Learn about the nuances of the bill and the vision moving forward from of Minnesota’s most public Angel Investors, John Alexander. Mr. Alexander is Chairman and Founder of Twin Cities Angels and President at Business Development Advisors, Inc. (no website).

What it means on paper, technically: The Minnesota Department of Employment and Economic Development (DEED)  has a solid primer on the parameters that entrepreneurs and investors need to know about HF 2695.3 (see: Small Business Investment Tax Credit Statute – section II).   Those interested in taking advantage of Minnesota’s Angel Investor Tax Credit should consult with their respective counsel.

What’s next? From the sounds of things, DEED will have their official application site up and running between June 1st and August 1st.   Qualifying as a business and/or an investor is the next step.

What does it really mean for Minnesota? Well, that’s the big question;  ultimately, it’s up to both the entrepreneurs and those with a financial interest in the tech community to determine how they want to capitalize on this this win.  Only time will tell where and to what extent the passage of this bill impacts the early stage markets (and so on). Stay tuned…

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