FOR IMMEDIATE RELEASE (2-11-09)
CONTACTS: Bill McCoshen, Competitive Wisconsin Inc. 608-258-8411; Paul Radspinner, BioForward (608-658-6095); Jennifer Smith, Thrive (608-443-1961) or Tom Still, Wisconsin Technology Council (608-442-7557)
MADISON – A coalition assembled to improve Wisconsin’s existing investor tax credits law applauded Gov. Jim Doyle’s Feb. 11 announcement of plans to expand and refine the four-year-old program.
Members of the Wisconsin Growth Capital Coalition have suggested specific improvements in Wisconsin’s investor tax credits law to encourage angel and venture capitalists to invest in qualified early stage deals. Doyle and legislative leaders announced Wednesday that improvements in the program are included in a proposed stimulus bill.
Wisconsin’s investor tax credits law, sometimes known as the Act 255 tax credit law, has been cited as a national model – but improvements were suggested by the coalition and other business groups. With 25 percent credits spread over two years, the Act 255 investor tax credits program has helped to nearly triple early stage investments by angel investors and venture capitalists in Wisconsin companies.
In 2007, early stage investments in Wisconsin reached $147 million, according to a report by the Wisconsin Angel Network, which found the dollars spread over scores of deals in high-growth businesses ranging from advanced manufacturing to biotechnology to information technology.
The changes proposed in the stimulus package would expand credits available to angel investors to $18.25 million for angel investors and $18.75 million for venture investors, essentially tripling the current aggregate total of $11.5 million per year once they take effect. The credits will be transferable by investors within certain parameters set by the state and could be applied against premium and franchise taxes paid by insurance companies.
Eligibility requirements will be refined to better define what constitutes a “qualified new business venture,” under state Department of Commerce rules, and aggregate caps on investors and entrepreneurs will be modified to allow greater flexibility.
Members of the coalition believe improvements in Wisconsin’s investor tax credits law will continue the recent growth of the state’s high-growth, early stage sector and better position companies in that sector to attract investment from investors within and outside Wisconsin.
“The growth of Wisconsin’s high-tech economy will help to drive our creation of high-wage, 21st century jobs,” said John Neis, managing director of Venture Investors LLC and a member of the Wisconsin Technology Council board. “The investor tax credits law is a proven, effective program for Wisconsin. These are timely changes to an already strong law.”
The Wisconsin Growth Capital Coalition includes about 30 organizations. Statewide business and technology groups are Competitive Wisconsin Inc., the Wisconsin Alumni Research Foundation, the Wisconsin Angel Network, BioForward (formerly the Wisconsin Biotechnology and Medical Device Association), the Wisconsin Innovation Network (six chapters); WiSys Technology Foundation and the Wisconsin Technology Council.
Regional economic development enterprises and alliances are: Centergy (three-county region in central Wisconsin); Milwaukee 7 (seven-county region in southeast Wisconsin); Momentum West (10-county region in western Wisconsin) New North (18-county region in northeast Wisconsin); Thrive (eight-county region surrounding Madison) and United St. Croix Valley (two-county region in western Wisconsin).
Entrepreneurial assistance organizations and research parks include BizStarts Milwaukee in greater Milwaukee, The Council for Innovation in the Fox Valley; and University Research Park in Madison. Individual angel networks and funds include Capitol Midwest Fund, Central Wisconsin Business Angels, DaneVest Tech Fund 1, Marquette Golden Angels, NEW Capital Fund, Origin Investment Group, Peak Ridge Capital, Phenomenelle Angels Fund, Silicon Pastures, Successful Entrepreneur Investors, Venture Investors LLC and Wisconsin Investment Partners.