MINNEAPOLIS (WCCO) – The Angel Tax Credit is coming back to Minnesota after the program ended for a year. DEED, the state's Department of Employment and Economic Development, is bringing it back, calling it a push to make the Twin Cities competitive with Silicon Valley.
"We think that startups of today are the Big Fortune 500 companies of tomorrow," said Steve Grove, DEED Commissioner.
This program gives a 25% tax credit to investors and venture capitalists who provide $10,000 or more in funding to Minnesota tech startups.
However, there are some changes for the Angel Tax Credit's second go. This time, DEED plans to target specific business owners.
"People of color, women, veteran-owned businesses, we think that those businesses are ones that need extra attention and don't always get looked at by venture capitalists," said Grove.
Also new, the Angel Tax Credit is just one branch of a much bigger picture called "Launch Minnesota," which is part of DEED's effort to make the startup ecosystem strong and thriving, in hopes that people want to start their businesses in Minnesota.
One of the Minnesota tech startups that benefitted from the Angel Tax Credit back in 2016 was Sezzle. This company has created a digital wallet for people to pay for products in interest-free installments.
"If you buy something for $200 online, we split it up into four $50 payments split up over 6 weeks," said Charlie Youakim, the CEO of Sezzle.
Since 2016, Youakim has been able to grow his employers and move into a bigger office space in the North Loop. He credits his company's success to the investors who believed in Sezzle early on.
"We raised just north of $1.8 million in 2016 which, I think over 50% of that funding was through Angel Tax Credit," said Youakim.
Youakim hopes he can pay it forward and help other tech startups in the Twin Cities experience the same economic boom that Sezzle did.
"One of our early investors actually just reached out and he saw the news that [the Angel Tax Credit] got re-implemented and he asked 'do you know any startups that are around?'" said Youakim.
Whether you're an investor or a small startup, you need to apply online to be eligible for the Angel Tax Credit.
You can start applying by Monday, July 1.
Click here to learn more.
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