Be an accredited investor per SEC Reg. D's Rule 501:
An individual with a net worth, or a joint net worth together with his or her spouse, in excess of $1,000,000. (You may include equity in personal property and real estate, cash, short-term investments, stock and securities, but must exclude the value of your primary residence. Equity in personal and real estate should be based on fair market value of such property minus debt secured by such property).
An individual who had gross income in excess of $200,000 in each of the prior two years and reasonably expects an individual gross income in excess of $200,000 in the current year.
An individual who had, with his or her spouse, gross income in excess of $300,000 in each of the prior two years and reasonably expects an individual and spousal gross income in excess of $300,000 in the current year.
Of the business in which the investment is made, not be:
An officer (a person elected or appointed by the board to manage the business), or
A principal (a person having authority to act on behalf of the business), or
A 20% or more owner, individually or combined with family members, of the voting securities of the business, or
A family member (siblings, spouse, ancestors and lineal descendants) of the above
Be certified by DEED before investment is made; non-accredited investors making exempt transactions may file for certification within 30 days of making investment
Make a minimum qualifying investment of $10,000 ($7,500 if investing in a woman/minority/veterans-owned and managed business, or a business located in Greater Minnesota). The non-refundable certification filing fee is $350.
We will send the investor and business a credit allocation approval email within 15 days (often in about one week).
Only investments made after the date of the credit allocation approval email qualify for the credit.
Upon approval, the proposed investment transaction needs to be completed within 60 days, or by December 31, whichever is sooner.
Step Three: PROOF OF INVESTMENT
Within 15 days of the investment transaction, the business submits a Proof of Investment form along with the following documentation:
A copy of the underlying transaction document (e.g., an executed subscription agreement).
A copy of the investor's check made out to the business, or a copy of the wire transfer:
A copy of the check serves as evidence that the certified investor made the investment. If it does not, you must provide documentation showing a clear audit trail from the certified investor to the business.
A wire transfer needs to show the certified investor as the originator and the certified business as the beneficiary.
A copy of the business' bank deposit receipt (not a deposit slip) with the business' name and account number showing the deposit(s) being made:
A bank deposit receipt needs to show the certified business as the depositor, with business name and account number. If it does not, include a bank statement with the business' name and account number.
If an escrow account is used, submit documentation showing both the deposit into escrow and the transfer from escrow into the business' account (note: the latter is considered the date of investment).
We will send the investor and business a proof of investment approval email after processing the submission.
Reports filed after February 1 incur an additional $100 late filing penalty.
Investor annual reports need to be filed for three years from the date of the latest investment.
We will send you an annual report approval email after processing the report.
HOW TO CLAIM THE ANGEL TAX CREDIT
We email Angel Tax Credit Certificates for qualifying investments by January or February of the year following the investment. Investors need to file a Minnesota Individual Income Tax Return (Form M1) and claim the credit on Schedule M1REF, Business and Investment Credits. Investors who do not live in Minnesota may also need to file Schedule M1NR, Nonresidents/Part-Year Residents. Forms are available on the Minnesota Department of Revenue's website.