MURPHY REINTRODUCES BILL TO HELP ENTREPRENEURS ATTRACT CAPITAL FOR NEW STARTUPS

Proposed federal tax credit is based on Connecticut law that has generated millions for Connecticut’s small businesses and startups

WASHINGTON – Today, U.S. Senator Chris Murphy (D-Conn.) reintroduced the Angel Tax Credit Act, a bill to incentivize new investments in startup businesses and help create a funding pipeline to grow small businesses and create new jobs in the science, technology, and engineering fields. The Angel Tax Credit Act would encourage investors in startup companies, commonly referred to as “angel investors”, to support startup businesses by allowing them to claim a tax credit equal to 25 percent of their aggregate qualifying equity investments of $25,000 or more to U.S.-based high-tech startups.

Murphy reintroduced the Angel Tax Credit Act to compliment his bipartisan Helping Angels Lead Our Startups Act, which he introduced earlier today with U.S. Senators John Thune (R-S.D.), Pat Toomey (R-Pa.), Brian Schatz (D-Hawaii), and Angus King (I-Maine).

The Angel Tax Credit Act is modeled after a state tax credit in Connecticut that has supported more than 200 investments by 90 angels in more than 50 companies since it was established in 2010. When Connecticut’s angel tax credit threshold was lowered from $100,000 to $25,000 in 2012, investment pledges grew from $2.4 million in 9 companies to $8.6 million in 23 companies.

“Once again, Connecticut is leading the way,” said Murphy. “In just a few short years, Connecticut’s Angel Tax Credit has already generated millions of dollars in capital for startup businesses across the state, and has helped create hundreds of jobs in high-growth industries, like science and technology, for our hardworking residents. Just like the HALOS Act I introduced earlier today, this Angel Tax Credit Act will make it easier for investors to back new businesses and support job creation and innovation across the nation, and I’m proud to bring this concept – which has helped so many businesses in Connecticut – to Washington.”

Startups are high-growth businesses that support millions of jobs throughout the country. But according to the U.S. Bureau of Labor Statistics, the creation of startups is on the decline, likely due to lack of access to seed capital. Angel investors fund the majority of startups in the United States and significantly contribute to small business job growth. The angel community demonstrates incredible investment power by reinvesting their own success back into the economy to help grow young businesses, create new jobs, and revitalize our economy. It is estimated that angel investment contributed to the growth of over 274,000 new jobs in 2012 alone.