This is a guest post by Leann Jacobson, president of the Technology Association of Iowa. Technology Association of Iowa is the premier professional organization driving the success of the Iowa’s technology industry and tech-based economy.
(Photo from twitter.com/leannjacobson)
Iowa entrepreneurs often bump-up against the challenge of finding the funding needed to grow. When it comes to capital, our state often ranks near the bottom of the heap. That is why the Technology Association of Iowa strongly supports legislation (HSB 234) to fund the Iowa Angel Tax Credit Program. This program would help strengthen early stage funding in Iowa’s financing continuum.
HSB 234 would leverage up to $10 million per year in new seed capital investments in Iowa-based small emerging businesses with high-growth potential. It would help incent capital formation at the earliest stage of company development, which is the most difficult capital to obtain. And, it would target non-institutional investors for early stage companies – including friends and family, individual angels, angel groups and early stage funds. (Note: This program is distinct from the Iowa Fund of Funds, which targets institutional investors for later stage companies).
HSB 234 would specifically do the following:
- Allow for angel investor tax credits up to $2 million per year (these credits haven’t been funded since 2007)
- Provide a 20 percent tax credit to angel investors (so these credits would leverage $10 million in investment activity)
- Assist many entrepreneurs who rely on these credits to get through early stage growth to the point when larger sources of capital are more interested/available
- Apply to businesses with a net worth of up to $5 million
Entrepreneurs across Iowa are urged to contact your legislators and encourage them to support HSB 234 with their “Yes” votes. Strong grassroots support will enable Iowa innovation and entrepreneurship with this important tool.