Today, Gov. Jindal signed House Bill 597 into law, restarting the Angel Investor Tax Credit program. HUGE win for entrepreneurs and startups across Louisiana.
The tax credit spurred the investment of $62 million in early-stage Louisiana companies from 2005 through 2009 and attracted more than 250 investors who helped 57 companies fund their operations. You can read our interview with Terry Jones on How The Angel Investor Tax Credit Will Impact Louisiana’s Startup Ecosystem for full a review of its benefits.
HB 597 restarts the Angel Investor Tax Credit program that expired at the end of 2009 and makes the program effective from Jan. 1, 2011, through July 1, 2015. The program provides a transferable tax credit set at 35 percent, which is projected to raise more than $14 million annually from angel investors, who typically fill a higher-risk seed-stage financing role that banks and venture capitalists are unwilling to go for.
Jindal said, “The Angel Investor Tax Credit will help Louisiana generate even more business success stories involving high-growth, young companies that create good-paying jobs for our people. We want our children to have the opportunity to pursue exciting careers with innovative companies right here at home. The Angel Investor program is a critical way we can help early-stage companies overcome financing hurdles so they can grow and prosper in Louisiana.”
“This incentive has proven its worth for the Capital Region, and will continue to spur economic activity from industries that are ahead of their time,” said Rep. Michael Jackson, the Baton Rouge legislator who authored the bill. “We need these kinds of businesses to attract the sort of innovators and entrepreneurs that make Louisiana more economically competitive — and this bill will go a long way in accomplishing that goal.”
“The passage of the Angel Investor bill is a great step for the state of Louisiana and the Baton Rouge area,” said Adam Knapp, president and CEO of the Baton Rouge Area Chamber. “Access to capital is always an issue for entrepreneurs building growth companies. The Angel Investor program will make us more competitive by driving more risk capital into promising startups in the Capital Region and across Louisiana.”
The old angel credit helped companies like Trace Security and NiFTy TV expand, scale, and attract investment. The new credit will hopefully go a long way towards tipping the scales of startup investing in favor of Louisiana entrepreneurs.