Arkansas Senator Mark Pryor recently proposed a bill that would provide a 25% federal income tax credit for investing in small businesses. You can see the details of the bill here.
We got a chance to catch up with several leaders in the startup community, both inside and outside Arkansas, and get their thoughts on Senator Pryor's bill.
"Mark Pryor’s American Opportunity Act is not only great news for investors but for the entire startup community as a whole, especially those who have a far greater chance of succeeding if they’re able to secure seed and early stage funding from local angel investors but who might be too early in stage for (or not need) funding from larger venture capital firms. Our economic future as a country does not solely depend on the outcome and success of giant corporations who have already “made it” and those that encounter no hurdles or challenges in their earliest stages, but also in large part on that of smaller startups that provide tremendous value which may not yet be realized or have not yet made it past a prototype or minimum viable product stage. These type of businesses and entrepreneurs are critical to our country’s economic success and are extremely important for job creation. Mr. Pryor’s bill will help encourage investment in these types of early stage businesses and ambitious entrepreneurs, and is nothing but great news for the entire startup community."
Michael Peace, Angel Investor & Owner of JMP Consulting, LLC
"Senator Pryor's proposed legislation would have a major impact on the future of the American economy by helping to unlock billions of dollars of private capital, and direct that money into the country's entrepreneurial high tech innovation sector. There are currently over 250,000 angel investors in the US, and this legislation has the potential to double that number."
David S. Rose is CEO of Angelsoft (www.angelsoft.net), the official software platform of the Angel Capital Association and the National Association of Seed and Venture Funds. Angelsoft is used by over 30,000 accredited angel investors to collaborate with over 100,000 high-tech entrepreneurs. Mr. Rose is also the founder and Chairman of New York Angels, the leading angel investor network on the East Coast, as well as an active angel investor himself who has helped to fund over 80 high tech startups.
"Most new high wage-rate job growth comes from technology-based start-ups. Venture capital has become less available and more conservative over the past ten years as traditional exits such as IPOs are scarce at best. Senator Pryor's proposed America Opportunity Act acknowledges that early stage business creators are the critical job creators. For early stage innovation-based business, angel investors provide the crucial risk capital available from no other conventional source. Providing a federal equity investment incentive of 25% reduces the considerable downside risk associated with these critically important investments, such that the available investment pool should increase dramatically. Similar programs have been available and very successful at the state level in a variety of states including Arkansas. I applaud Senator Pryor's leadership in putting this bill forward, and I sincerely hope this measure receives broad bipartisan support. Frankly, federal measures such as this are long, long overdue."
Jeff Amerine, PMP
"I think a tax credit for angel investing would spur entrepreneurial growth. There are many more potential angels out there that have not yet started investing, but have the capital to do so. The reason they're likely not investing yet is that they don't feel like they understand the process -- and if they do, they recognize that it's hard to produce a positive return as an angel investor. A meaningful tax credit like the one proposed would likely sway many more angel investors to fund early-stage entrepreneurs."
Dharmesh Shah - Founder of HubSpot and co-author of Inbound Marketing