Gov. Scott Walker’s proposal to lift the cap on Wisconsin’s Angel Investment Tax program, often referred to as the Act 255 tax credit program, drew support Thursday from the Wisconsin Technology Council and its Wisconsin Angel Network program.


Along with other economic development initiatives, Walker outlined his plans Thursday to lift the cap in order to encourage continued private investment in startup companies.


Subject to legislative approval, the budget will propose removing the maximum cap – which is currently set at $47.5 million – but retains the annual limit, effectively allowing this program to continue into the future.


Current law provides that no more than $47.5 million in credits may be claimed for all taxable years combined for angel investments. This cap was at odds with the legislative intent to expand the program to $20 million per year and with the 2009 repeal of the statutory cap for fund-based investments.


“This is welcome news for Wisconsin’s angel investor community and for the many emerging companies that grow through angel investment dollars,” said Tom Still, president of the Wisconsin Technology Council. “Retention of the cap was an oversight that diminished the programmatic certainty needed to ensure uninterrupted investment in Wisconsin companies.”


The Tech Council recommended lifting the cap in its 2012 report, “The Future is Now: Four Strategies for Wisconsin’s High-Growth Economy.”


Angel investing in Wisconsin has risen steadily since the angel tax credits took effect in 2005, from $5.4 million in that year to $61 million in 2011. The Wisconsin Angel Network was created in late 2004 and has helped to expand the number of angel groups and investors.


The independent Wisconsin Growth Capital Coalition has reported that angel-backed companies in Wisconsin created 1,500 jobs in 2010 and 2011 alone.