After many years of lip service to angel investment tax credits, the House voted 112-20 to approve a package of tax credits designed to stimulate job growth in Minnesota with a subsequent 58-3 approval by the Senate shortly thereafter and it now goes to Gov. Tim Pawlenty for signature.
Sponsored by Rep. Ann Lenczewski (DFL-Bloomington) and Sen. Tom Bakk (DFL-Cook), HF2695/SF2568 includes a small business investment tax credit — the so-called “angel investor” credit — and several others.
While we applaud and are delighted by the passage of this historic tax credit to kickstart Minnesota innovation, why did this get passed in a time when Minnesota is struggling mightily with balancing our state budget? Is this more about competing with Wisconsin for startups, or a true effort to create a climate that is a catalyst for innovation in Minnesota?
NPR’s Bob Collins take on it might shed some light when he points out how VitalMedix’ CEO talked to the StarTribune about the need for an angel tax credit, took investment predicated on moving his operations to Wisconsin, and has now filed for bankruptcy:
An “Angel investment” tax credit rewards investment in companies with tax breaks. Investing in a start-up company, especially in the high-tech world, is risky. The angel investor credit provides a cushion for the investor, its proponents argue.
Wisconsin has such a program. Minnesota doesn’t.
While Collins didn’t come right out and say that this bill is a reaction to Wisconsin luring startups away from Minnesota–especially when it comes to a sector, medical devices, many proudly boast that within which Minnesota enjoys a dominant position–but there is evidence that this Wisconsin competition is precisely why this modest angel investment tax credit was included in this bill at this time rather than true leadership in startup investment incentives…. [Read More…]

The Mobile March Twin Cities event was nothing short of excellent. In this podcast one of the organizers, Minnov8’s own Phil Wilson, are joined by Biz Borsch (





