Michigan’s angel, venture capital and entrepreneur communities are hailing this week’s passage by the state Legislature of tax breaks for angel investors. The bill, passed by both houses and expected to be signed into law by Gov. Jennifer Granholm, gives angel investors a 25 percent tax credit over two years, with a maximum of $250,000 per year and per investment.
The legislation was pushed heavily by angel investors in the state and by the Michigan Venture Capital Association. Longtime Michigan angel investor Terry Cross says that while he has not read the final bill yet, he is optimistic about it.
“I think it is exciting and should definitely help unlock heretofore dormant investment funds for the entrepreneurial ecosystem,” Cross, who is also an Xconomist, wrote in an e-mail to me today. “And it comes at a very important time. As a person whose feet are firmly implanted in the startup world, my observation is that entrepreneurial activity and startups are exploding as compared to eight months ago. It is really quite astonishing.”
Skip Simms, vice president for entrepreneur business development for Ann Arbor Spark, a funding source and incubator for startups, hailed the bill’s passage on Spark’s blog today.
“This legislation may prove to be one of the most important programs that will release the millions of private capital in Michigan that is currently sitting on the sidelines,” Simms writes. ” It also makes our early stage companies competing for private equity competitive with counterparts in Ohio, Illinois, Wisconsin and Minnesota.”
The credits would go into effect after Dec. 31, 2010 and before Jan. 1, 2013.
