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State Tax Credit Incentives for Equity Investments – A Survey of Current Practices

The Community Development Venture Capital Alliance examines trends in the use of tax credits to incent direct equity investment into local businesses, to encourage the creation of community and angel seed funds and/or state venture funds using contingent tax credits.

By:
Kelly Williams, with Amy Chung and Adey Delbridge
Community Development Venture Capital Alliance
New York, NY
http://www.cdvca.org

Eighteen states have adopted such programs. They conclude that:

1) The is no single successful model

2) States should continue to seek effective methods for private sector involvement

3) Education of investors, entrepreneurs and state policymakers is critical to program uptake

4) Both short-term and long-term program evaluation metrics are key to ensuring program improvement and continuation, and

5) Developing tax creit programs is an iterative process

http://www.nasvf.org/web/allpress.nsf/93860bfe22f7c2168625694e004f9f1a/8fbea11e6aca3d6d86256ef5005c14fe/$FILE/State_Tax_Credit_Survey_July2004.pdf

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