EconomyFriday, April 03, 2015 By: Ken Kousky, BlueWater Angels and Krista Tuomi, American University Angel tax credits are a common policy measure aimed at boosting startups. They are relatively simple and cost-effective for states, and can result in high quality job creation. Credits can also be more effective than a capital gains tax reduction in stimulating early stage companies, since investors get the credit up front whether the investment realizes a gain or not.[1] Currently 27 states have some form of early stage capital tax credit, the mode being 25% of invested capital.[2] It appears that the credits do actually spur new investment as opposed to just rewarding existing investors. In a report by the Minnesota Department of Revenue, 48% of surveyed angels would not have made their investment without a 25% credit and 34% would have invested less. The Minnesota figures are bolstered by a survey of angels, conducted by Tuomi and Boxer in 2014. In this survey, 69% of respondents claimed that the credit influenced them to invest in more firms or invest more money. Some of this private capital may be displaced from alternative investment in the state, but it is likely that much of this would have been otherwise placed in national capital markets.[3] Monday, March 09, 2015 ACA Membership Director Sarah Dickey interviewed Ellen Weber recently as part of a series of ACA member profiles. Meet Ellen Weber – ACA member angel investor, Executive Director of Robin Hood Ventures and Executive Director of the Temple Innovation and Entrepreneurship Institute. Ellen provides insight into how the 16 year old angel group maintains its edge for investing in dynamic markets. How and when did you get involved in angel investing? Robin Hood was founded when two long-time friends attended a local pitch event with little structure and no follow up. They wanted to create an angel group that would not only get deals done as effectively as possible, but would also work closely with the entrepreneur after investment. I agreed to help them start this new angel group with an initial role of serving as the back office to get things off the ground. Very quickly my role grew and I also became very active in the local entrepreneurial community. Tags: Economy Monday, March 02, 2015 By: Ken Kousky, BlueWater Angels and Krista Tuomi, American University Federal and state governments are beginning to recognize the important role that startups play in job creation. (A recent article by Neumark, Wall, and Zhang notes that they account for almost 20 percent of gross job creation.) For these startups, early stage financing is increasingly necessary given the shortened product life cycle - businesses can only succeed by moving rapidly from ideas to product distribution. Banks do not provide this type of funding; family and friends rarely have enough; and the public stock market is only an option for established firms. The 2014 Joint Small Business Credit Survey Report emphasizes this. In particular, it finds that the majority of small firms (under $1 million in annual revenues) and startups (under 5 years in business) are unable to secure any credit. (The average approval rate from all sources was only 38%). Not surprisingly, lack of credit availability was the top listed challenge for startups in 2014. Tags: Economy Monday, February 02, 2015 By: Marianne Hudson, ACA Executive Director This post originally appeared on Forbes.com. Two industry powerhouses - America Online Co-Founder Steve Case and former Hewlett-Packard CEO Carly Fiorina - made a splash recently when they led a report, “Can Startups Save the American Dream?” I very much like this report from the University of Virginia’s Miller Center and the ideas in it. However, they missed a significant piece of the answer. While the report focuses on how entrepreneurs can kick-start the economy, it overlooks what we need to do to support the angel investors who fuel the entrepreneurs creating our country’s jobs and innovations. The contribution of angel investors is huge. Angels have backed some of the most important companies in America including Facebook, Google, Amazon, Twitter and Starbucks. Angels supply nearly 90 percent of outside equity to startup companies, after friends and family. In 2013 angels invested nearly $25 billion in about 71,000 companies in every state. Without angel investors, many of these companies would not be around. Tags: Economy Tuesday, May 20, 2014
In case you haven’t heard, the SEC will revisit the definition of accredited investor soon and there is a possibility the financial thresholds could be raised so much that 60 percent of all accredited angel investors would no longer qualify to make angel investments. If this happened, this would have a huge impact on the high-growth startups that create the majority of jobs and innovations in this country.
Tags: Economy Thursday, February 27, 2014
Want to find the best deals? The best exits? Curious about syndicating on accredited platforms? How about getting answers to your questions about the new SEC rules on general solicitation and what you really need to do (from the SEC and from leading attorneys)? Want to rub shoulders with some of the best and most successful angels in the world?
Tags: Economy Monday, August 05, 2013 Dan Rosen is a Board member of the Angel Capital Association, the world’s largest organization of accredited investors, and is also chairman of the Alliance of Angels, a Seattle-based angel investment group. To read the original post on VentureBeat, click here. On July 10th, the Securities and Exchange Commission released rules allowing entrepreneurs to publicly advertise their investment opportunities, finalizing a portion of the JOBS Act of 2012. These included a final rule lifting the ban on general solicitation and provided guidance on how issuing entrepreneurs could “reasonably” verify their investors are accredited; a final rule disqualifying “bad actors” from investing in private offerings; and a proposed rule requiring entrepreneurs to submit multiple reports and information for solicited offerings. The Angel Capital Association (ACA) has taken a strong stance on these rules, stating that these rules could greatly reduce entrepreneur access to angel investment, as they require investors to provide their private wealth or income information to issuers or third parties, and also may require entrepreneurs to submit considerable information to the SEC with harsh penalties for missing filing dates. Tags: Economy Thursday, July 25, 2013 David Verrill is Chairman of the Angel Capital Association and also leads the Hub Angels Investment Group in Boston. He wrote an Op-Ed in the Wall Street Journal today on the SEC General Solicitation Rules.
Last week's SEC ruling on General Solicitation sounds an alarm to angel investors in the US on several grounds. But first, a quick summary of the ruling. Rule 506b keeps regulations as they are for those companies who only privately solicit funds from self-certified qualified investors. No harm there, and thanks to the SEC for maintaining the status quo for what has been historically the best way for startups to raise money from accredited angel investors.
Tags: Economy Monday, July 15, 2013
Last week the Securities and Exchange Commission approved two rules and one proposed rule that will change how entrepreneurs raise angel capital and may make investment more difficult for angels and startups alike. We think fewer angels will invest as a result, unfortunately hurting the startups that create jobs throughout the U.S.
Tags: Economy Thursday, February 07, 2013
The Angel Capital Association is making a difference in Washington. For the past 24 months, the ACA has made a concerted effort to make sure we take the voice of angel investors to Capitol Hill. A special fund was initiated to help cover the expenses of that effort, our Public Policy Committee put together an all-star volunteer cast of some of the best legal minds on the planet (like Joe Bartlett of Sullivan & Worcester in NY), and we engaged a lobbying firm called APCO Worldwide to help us maneuver our way through the halls of Congress. And
it has paid off already.
Tags: Economy |