Comments on: Angel investment tax credit in Minnesota: The Burden of Proof

By: Richard Cunnington

Richard Cunnington — Thu, 09 Sep 2010 10:16:08 +0000

Hare made one more key point: Minnesota certainly does boast more venture capital dollars than Wisconsin but the Badger State vastly outshines its neighbor in the number of such deals: plus 300 percent since 2002 versus minus five percent for Minnesota. So in this context, Minnesota is the United States in overall market size but Wisconsin is China in rate of growth.

Interesting – as an entrepreneurial investor i would be winging my way to Wisconsin even if there were no tax credits now, the momentum itself makes it more attractive on it’s own. If Minnesota tax credits were offered I would perhaps take my money there for the right opportunity but the lack of credits does affect these decisions.

By: Alex Danzberger

Alex Danzberger — Thu, 01 Apr 2010 20:57:23 +0000

I applaud the efforts of the enlightened legislators who finally realized that Angel investors are really doing the work of politicians. We put money to work to create jobs and grow businesses. In the end, the benefit of our investments will more than pay for any tax credit from corporate and individual income taxes, capital gains taxes and the multiplier effect of the employed spending their salaries in the local economy. The people of MN are the ultimate beneficiary due to a more vibrant economy attracting and retaining entrepreneurs and their business.

By: VitalMedix Inc., a start-up developing a drug to aid first responders, files for Chapter 7 : MedCity News

Wed, 24 Feb 2010 23:22:42 +0000

[...] company soon became a rallying cry for supporters of a long elusive Minnesota angel credit that could make the state more competitive with Wisconsin and other 26 other states with similar [...]

By: TECHdotMN – Angel tax credit just $10 million short of finish line

TECHdotMN – Angel tax credit just $10 million short of finish line — Wed, 24 Feb 2010 00:55:33 +0000

[...] Thomas Lee, Med City News “ST. PAUL, Minnesotaâ€“ For all of her fierce opposition to angel tax credits, Rep. Ann Lenczewski (D-Bloomington) now has a more pressing issue to focus on: how to pay for [...]

By: Angel tax credit just $10 million short of finish line : MedCity News

Angel tax credit just $10 million short of finish line : MedCity News — Tue, 23 Feb 2010 22:43:54 +0000

[...] PAUL, Minnesota– For all of her fierce opposition to angel tax credits, Rep. Ann Lenczewski (D-Bloomington) now has a more pressing issue to focus on: how to pay for [...]

By: Affinity Capital in Minneapolis to help launch new $10 million early stage fund : MedCity News

Thu, 18 Feb 2010 18:13:04 +0000

[...] Tim Pawlenty and legislative leaders are trying to push a three year, $40 million tax credit to spur angel investment in young companies. Such a credit will “definitely help” the [...]

By: Wisconsin angel credits could snag top Minnesota biotech start-up : MedCity News

Wisconsin angel credits could snag top Minnesota biotech start-up : MedCity News — Mon, 15 Feb 2010 19:49:21 +0000

[...] Barca, a top Democrat in the Democratic-controlled Wisconsin State Assembly, was more than a little puzzled by a Minnesota House Research report, commissioned by angel tax credit foe and Tax Committee chair Rep…. [...]

By: Tom Still

Tom Still — Fri, 12 Feb 2010 18:31:45 +0000

Thanks to Tom Lee for an informative and entertaining piece on the investor tax credit hearing in Wisconsin. As president of the Wisconsin Technology Council, which includes the Wisconsin Angel Network among its programs, I can add my voice to those who believe targeted investor tax credits work. That has been a major part of the story in Wisconsin’s tech-based economy. Some might ask: Why would Wisconsin care if Minnesota adopts a credits law of its own? Isn’t it better for Wisconsin to wage a “border war” to attract Minnesota companies? A healthier angel climate in Minnesota is good for Wisconsin, and vice versa. The entire I-Q Corridor, which extends from Chicago through Wisconsin to the Twin Cities and beyond, is stronger if the right incentives are in place. Thanks for your coverage of this important issue.

By: Lief Larson

Lief Larson — Thu, 11 Feb 2010 20:56:59 +0000

The spirit of this tax credit goes beyond merely supporting entrepreneurship, but also includes the tangible and intangible economic stimulation that comes with new business and technology creation. To me, this discussion is really about ‘one in the hand’ for government vs. ‘two in the bush’ for the entire state. Anything other than a competitive investment tax credit would be incredibly short-sighted. What some (misguided) government representatives thinks that tax income could do for government today would no doubt product much better economic returns in the short-term in the hands of an entrepreneur, with the upside of coming to full fruition in the long-term. Government doesn’t solve problems, it subsidizes them. Offering credit to constituents who stake themselves in economic potential is an opportunity that should be seized, not forsaken. I invite Rep.Lenczewski to come to my office and see the incredible things being done with angel investment.

By: Rob Weber

Rob Weber — Thu, 11 Feb 2010 02:55:18 +0000

I understand that we are trying to justify the tax credit by comparing the state of Minnesota to Wisconsin, but may I ask, why? Is Wisconsin a model state for innovation? Has the Minnesota tech industry not completely slipped off the national radar screen while tier two markets like Colorado and Texas have blown passed us? We need this angel tax credit because Minnesota is a very conservative business community. Due to this risk avoidance culture, we need to provide an extra nudge states with risk takers, Colorado and Texas for example, don’t need to take. The rich? Who do you think creates all the jobs in this country? By the way, have you seen the average return for venture capital the past decade? It is horrible (actually negative). If something isn’t done, it is going to complete dry up.

Enough with the weak reports shunning our needed bill. Support this tax credit, or we, the tech community of Minnesota, will unite as a voting body and take a portion of our angel dollars to fund some real state representatives who understand business and our culture.

By: Jeff Pesek

Jeff Pesek — Thu, 11 Feb 2010 02:06:34 +0000

Great post Thomas, were you there?

It’s totally appropriate for Rep. Ann Lenczewski to request and expect the burden of proof given her role as Chair of the House Tax Committee. It’s also totally appropriate to deliver on that burden of proof – what a slam dunk!?!?

I could not believe what I was hearing from the mouth of Mr. Michaels, it was totally ludicrous. I wasn’t alone as people were literally squeaming in their chairs; it was really awkward and uncomfortable. I had to leave after 45 minutes of hot air…hope that Mr. Hare brought everyone back into reality. Did he expose that “non report” as the joke that it was?

Did he deliver?

Nice dissection above – this is the kicker, you nailed it:

“And with all of its intellectual prowess and rich innovation, why shouldnâ€™t Minnesota aspire to be like California and Massachusetts? The two states, the report notes, are â€œhotbedsâ€ for technology and venture capital. How do you think that happened in the first place? Did California and Massachusettsâ€™ innovation ecosystems magically appear out of pixie dust?”

Again, solid content Thomas, hard hitting, even (painfully) humorous at times.

PS-Curious to know if you have a source for this: “From 2005, the first year Wisconsin angel credits took effect, to 2008, the amount of angel money invested has jumped nearly three fold from $5.3 million to $15 million, according to a report by the Wisconsin Angel Network. The number of deals ballooned from 18 to 53.”