The Indiana Economic Development Corporation has an excellent program available to start-ups or early-stage businesses who are looking for ways to attract investor capital.
It is called the Venture Capital Investment (VCI) Tax Credit. The program rewards new investors in “qualified companies” by pre-approving them to receive a 20% state tax credit on every dollar they invest up to $2.5M. If you are looking for capital to start (or grow) your business, this might be an excellent opportunity for you to improve the attractiveness of your offering. Remember, there are people out there looking for investment opportunities, so beat the competition by making yours more attractive than the others.
All American Hosting, LLC was recently accepted into this program and it was a fairly simple and straight-forward process. It was not the bureaucratic, complicated system that we’ve come to expect from government programs. I was able to download a simple, 2-page application, fill it out, and send it in very quickly. The application cautions that it may take 4-6 weeks for processing, but we received our approval in 2 weeks and are now happily including this fact in our investor information packets.
Just think about the impact this tax credit could have on your situation. If an investor makes a $25,000 investment in your company now (or before the end of the year), then files a tax return in January, they will receive a $5,000 credit (not a deduction – acredit) within 4 months. A 20% return within 4 months equates to an effective annual rate of 60%. And there is no risk because the state provides a letter of approval before the investor writes the check. Then you send in a verification that you received the money from them and the state will send the investor a tax credit document to attach to their tax return — regardless of whether our company does well or not. How many firms can offer that to investors?
I was surprised how easy it was, and received great service from Lee Robinson at the agency. I highly recommend this program if you are looking for investors. The state has never received enough applications to reach the ceiling put on it by statute, so you have a good chance of getting approved. Simply go to the links above to get more information and the forms you’ll need. GOOD LUCK!
Tim
Tim Heidenreich
CFO, ProVim
4705 W 72nd St
Indianapolis IN 46268
317-910-2992
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