Michigan offers new tax incentives to spur ‘angel’ investors

The state announced  a new Angel Investment Incentive program this week designed to stimulate the creation and growth of early stage technology companies in Michigan.

Angel investors are typically high-net-worth individuals interested in contributing to the growth of promising companies. They pool resources to provide companies with necessary funding, usually from $250,000 to $2 million, to provide a bridge to the next stage of growth. Many angel investors also provide mentorship and crucial management support.

Part of the 21st Century Jobs Fund, the Angel Investment Incentive program provides a tax deduction for individual investors when the basis plus all or some portion of the profits from an initial qualified investment are rolled over into a subsequent investment in a second qualified technology company. The initial investment of at least $100,000 must be made between January 1, 2007 and December 31, 2009. To qualify, both companies must be certified by the Michigan Strategic Fund (MSF) board at the time of investment.

The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.

For more information on the Angel Investment Incentive and other MEDC initiatives and programs, visit the Web site at www.michigan.org/angels.

Source: MEDC