The Senate Finance Committee advanced a key provision that would encourage private investment into startup companies in South Carolina.
“Encouraging early stage funding in high-risk technologies and businesses is one of the keys to growing innovative businesses that create great jobs, new markets and build wealth for a state,” said Wayne Roper, president of SCBIO, a statewide trade group representing the life sciences industry. “Measures like this more than pay off in the jobs, they grow and the investments they attract.”
The Bill Wylie Entrepreneurship Act (H.3779) moved forward with several amendments to the House version that would allow the state to recover the amount of the credit for investments that pay off for investors. It also requires the measure to get a sunset review after six years. The measure must get through the full Senate and reconcile with the House version by the end of the 2012 session on June 9.
The bill would provide a 35% tax credit to qualified angel investors who invest in registered startup businesses. Total credits would be limited to $5 million a year. Angel investors invest their own money and choose their own investments.
An angel investor is defined as someone with a net worth of at least $1 million. Such investors often form networks and funds and are among the first to invest in promising, but early stage, high-risk technologies and businesses. Angel investment allows entrepreneurs to develop their concepts that later attract other private funds.
“Without angel capital, we would still be like many good ideas on paper … still on paper on the shelf,” said Steve Johnson, CEO of CreatiVasc. “Angel funding provided the critical infusion that has taken CreatiVasc where it is today: one of only three companies selected by FDA to be a part of the agency's new Innovation Pathway program to move medical breakthroughs to market...
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