Oregon Needs Angel Tax Credit to Stimulate High-Risk Investments, Report Suggests

Many promising technologies created by Oregon startups wither on the vine due to a shortage of high-risk angel capital and many other startups leave the state in search of funding, according to a new report from the Technology Association of Oregon (TAO) – Oregon Angel Investment: The Economic Impact of High-Risk Investment in Oregon's Entrepreneurial Enterprises. The authors highlight the rapidly growing entrepreneurial ecosystem that includes a growing number of willing, talented entrepreneurs and entrepreneurial support organizations (e.g., incubators, accelerators). However, the state still lags significantly behind other areas of the country in terms of actual dollars invested, as well as the number of high-risk investment deals that are made.

To address this issue, the authors contend the state needs to establish an angel tax credit to incentivizes more high-risk investments by angel investors. The authors highlight the success of angel tax credits in other states including Minnesota and Wisconsin. In Minnesota, the state has issued $34.2 million in angel tax credits to help stimulate $138.6 million in qualified investments, and has caused a shift in the investing behavior of in-state angel investors toward more high-risk investment. Wisconsin has issued almost $59 million in angel tax credits to help stimulate approximately $916 Million in qualified investments. According to the report, those investments in Wisconsin startups have helped create over 1,100 full-time jobs created with an average annual salary of $76,581. Read the report…