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Angel Tax Credit: Following the Money

6/2/2016 12:00:00 PM

The Angel Tax Credit Program stimulates private investment in emerging businesses and encourages job creation through the growth of those businesses.

In 2015, the program certified 182 businesses, 114 of which received investments from 538 certified individual investors and 279 investors in certified funds. These businesses received more than $70.4 million in investment, resulting in $15.5 million in credits for investors.

The program spurs substantial investment in Minnesota businesses by non-Minnesotans. Last year, 329 non-Minnesotan investors accounted for 40 percent ($25 million) of overall investment; in 2014, they accounted for 33 percent of investment. A few investors in the program hail from Great Britain and Canada. Certified investors and certified funds are listed in the program’s 2015 annual report.

The annual report, for the first time, identifies the location of Minnesota investors: 405 investors (50 percent) were from the metro area and 83 (10 percent) were from Greater Minnesota. Metro area investors invested $39.5 million in the program, and Greater Minnesota investors invested $5.8 million.

Last year, $7.5 million of angel tax credits were reserved for investments made in certified businesses located in Greater Minnesota, as well as for investments made in women and minority owned and managed businesses. Of the 114 certified businesses receiving investment through the program in 2015, 13 were headquartered in Greater Minnesota, an increase from eight in 2014; 10 were women-owned and managed businesses, a decrease from 15 in 2014; and 13 were minority-owned and managed businesses, an increase of five from 2014.

In 2015, DEED increased awareness of the Angel Tax Credit Program among women and minorities and in Greater Minnesota through meetings and presentations to business, investor, and economic development groups, as well as through email and advertising campaigns. The work to increase awareness of the program among these targeted businesses continues in 2016.

Of the $15 million in new credits available this year, $7.5 million is reserved for investors or investment groups funding minority-owned and -managed businesses, women-owned and -managed businesses or businesses located in Greater Minnesota. As of May 18, $6.6 million remains available for these businesses; and after September 30, the credits become available to all businesses.

Listen to how the Angel Tax Credit program has helped support some ground-breaking Minnesota companies.

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