Early-Stage Landscape

By: Marianne Hudson, ACA Executive Director

I thought you would be interested in a handy summary of the tax reform bill, the Tax Cut and Jobs Act, which was signed into law by the President just before the Christmas holiday.  It is by Bloomberg Government and was done before some small tweaks by the Senate, but should be pretty close to the final law.

There are three things to know about tax reform that affect angel investors and new companies, most of which ACA supported and promoted on Capitol Hill:

By: Marianne Hudson, ACA Executive Director

ACA members have known for years that people from other countries make AMAZING entrepreneurs.  This is one of the main reasons ACA has supported policies like startup visas and the International Entrepreneur Rule to ensure that more of these entrepreneurs from other countries can stay in the US and create innovative and job creating companies.

Now we have a new source of data on international entrepreneurs – Immigrant Founders of the 2017 Fortune 500 – by the Center for American Entrepreneurship (CAE).  The report comes amid the ongoing debate about US immigration policy – and, most immediately, debate regarding the policy known as Deferred Action for Childhood Arrivals (DACA).

By: Marianne Hudson, ACA Executive Director

Recently two articles caught my attention for calling attention to the importance of startups to national economies, with one particularly pointing out how key angel investors are.  Both writings point to how startups create jobs and innovations to our economy and they are the kinds of articles that Members of Congress and other policy makers read.  (That helps ACA make progress on Capitol Hill, trust me!)

Below are both articles with some excerpts so you get the general idea.  Check out the full articles too.

By Linda Smith, ACA Chair

Angel Ventures is spreading its wings!  For those of you unfamiliar with Angel Ventures, they are the widest network of angel investors in Latin America with a significant presence in Mexico, Columbia, Peru, Chile and Southern California.  Some of you may have met Hernan Fernandez of Angel Ventures Mexico, an active ACA member. They also maintain excellent contacts with Hispanic angels and Hispanic investment opportunities throughout the United States. 

As your ACA Chair, I recently had the opportunity to travel south and meet with the staff, supporters, and members of Angel Ventures Peru.  Based in the capital city of Lima, I was hosted by Greg Mitchell who leads the staff in Lima and Elizabeth Acuna, their deal flow manager.  The breadth and depth of their work in the startup ecosystem is truly impressive.  With over 250 members, Angel Ventures has created a fund-to-fund network of investments. 

By: Marianne Hudson, ACA Executive Director

All of us know about — or personally know — talented foreign-born entrepreneurs who have created successful businesses in the US.  Think Intel, eBay and Tesla. Immigrant entrepreneurs are behind more than half of America’s startup companies valued at $1 billion or more.

That’s why the Angel Capital Association is joining the National Venture Capital Association (NVCA) and many other leading entrepreneurial organizations to support the International Entrepreneur Rule.

By: Marianne Hudson, ACA Executive Director

Every day, ACA members ask us for ideas on how they can improve everything from deal flow to impact to liquidity.  Other members have fantastic ideas and experience in solving those same issues.

So let’s say you are part of an angel group that has lost some of its mojo and you’re losing out on the very best entrepreneurs because of newer players in your startup ecosystem.  These investors have innovative ways to fund companies and have deep connections into the leading entrepreneurs, innovators and follow-on investors.  What do you need to do to be innovative and not only bring a fresh take to your entrepreneurial community, but also regularly help great startups grow with these investors?

By: William Carleton, Counselor @ Law, and volunteer chair of ACA Public Policy Advisory Council

Don't look now, but entire development teams, with significant experience (2-3 years+) working together, are leaving giant tech companies to found startups.

If 20 years ago the archetype was two renegades in a garage with an idea and the will to figure stuff out, today's paradigm is six or seven developers and a political savvy business leader (or two, or more) who have learned to trust one another and work effectively as a unit. All courtesy of the experience of shipping products for a well funded, publicly traded company.

By David Verrill, Chair of ACA’s Public Policy Committee

Ten days ago, I took a trip to Washington, DC with ACA executive director Marianne Hudson and our government affairs team of Chris McCannell and Greg Mesack from Eris Group.  It was an interesting three days, with a combination of planning our policy work for the year, meeting with other associations with overlapping interests, and ten meetings on Capitol Hill.  This was the week after the inauguration of President Trump, and you could see a lot of change in our nation’s capital.  Here is what I learned:

Comprehensive Tax Reform

Comprehensive tax reform is coming (after Congress deals with the repeal and replacement of Obamacare), with the goal of having it done by August 1.  Most believe that the House will follow blueprints by Paul Ryan and former Ways & Means chair Dave Camp as the basis to build on, with the following features:

By: Angela Jackson is an ACA Board Member and Chairs the “Grassroots Group” for ACA members interested in interacting with Members of Congress.  Want to join?  Shoot Angela an email.

Exciting things are happening in Washington, DC relative to advancing the ACA legislative agenda - and we're requesting your immediate help.

Call to Action - by Monday January 9!

ACA just got word that the House of Representatives plans to vote on the HALOS Act next week.  HALOS (Helping Angels Lead Our Startups) exempts demo days from general solicitation rules, meaning that companies that participate in any type of demo day would no longer need to worry about taking extra steps to verify investors are accredited – unless they are going the solicitation 506(c) way.  And angels who prefer to invest in private deals would have better assurances that companies had not tripped the general solicitation trigger.  The bill, HR 79, has great bi-partisan sponsors:  leads Rep. Steve Chabot (R-OH) and Kyrsten Sinema (D-AZ), and co-sponsors Andy Barr (R-KY), Carlos Curbelo (R-FL), John Delaney (D-MD), Randy Hultgren (R-IL), Jared Polis (D-CO), Pete Sessions (R-TX), and Ann Wagner (R-MO).

By: Marianne Hudson, ACA Executive Director

This post originally appeared on Forbes.com

One of the best parts of being an angel investor is supporting companies after you invest.  And now angels have a new support tool in our pockets for portfolio companies – a new federal tax benefit that can add up to $250,000 per year for these young businesses.  This is real money for startups – and better yet, it is totally non-dilutive to angel investor equity!

I learned about the Federal Research and Experimentation Tax Credit and how it will change for qualified startups at a recent meeting of the Angel Capital Association and I think it is important to get this news to as many angels and entrepreneurs as possible, so they can benefit as soon as possible.  Cash is short for angel-backed companies, so finding extra money – especially of this size - is really important.

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