Maryland Congressman Chris Van Hollen has joined Congresswoman Betty McCollum (D-MN), Congressman C.A. Dutch Ruppersberger (D-MD), Congresswoman Allyson Schwartz (D-PA), and Congressman Jared Polis (D-CO) in introducing the Innovative Technologies Investment Incentive Act of 2010 (H.R. 5767).  The proposal is for the federal government to give angel investors a 25% tax credit for investments made in start-ups that receive SBIR grants.  How cool is that?  This would help achieve the ultimate SBIR purpose which is to get the R&D it funds into the private sector for commercialization, which is where that piece belongs and provides the greatest chance for success.  It also gets private capital onto Main Street, not Wall Street.  What an incentive for the individual.  It’s a better return than Goldman Sachs can give them, a 25% immediate gain.  Yes you still have 75% at risk but how is that stock purchase pre- 2009 of BP, Microsoft, Citigroup or GE working for you?   And it beats a 15, 20 or 25% capital gains tax.  It beats a 0% capital gains tax (like that will ever happen).

More good news.  Michigan is on the heals of approving a 25% angel tax credit too, joining three other great lakes states (Ohio, Illinois and Wisconsin) in providing such an incentive for angel investors.  Stay tuned for that.  I’ll let you know when it happens and an interesting opportunity SPARK will be offering.

Furthermore the legislation would allow states for the first time to set their own regulations on security laws.  What a nightmare that would be given that most innovative, high-growth, high-need start-ups raise money from people in more than one state.  Also it would add yet another bit of red tape for the entrepreneur to have to learn about and maneuver through.  Don’t we make it hard enough for entrepreneurs to work through all the rules and regulations already at the start-up phase?  How difficult do we want to make it to start a business?  Come on, these are the very people we’ve agreed will drive new employment and diversify our economy.

Write your senators and ask them not to support this portion of Senator Dodd’s bill.

The disappointing part of the list is that all investors, except #25, invest in IT companies only.  IT of course covers a lot of industry subsectors like software, mobile apps, gaming, computing, internet, etc.  But I didn’t see alternative energy, materials, robotics, security or bio tech on anyones list.  #25 invests in medical devices.

Nonetheless it’s good to see angels willing to put their names and records out there for people to see.  Hopefully this will encourage more people to make investments in our future.

It talks about angel investing and the need for more angels in Michigan.  They highlight two important people in this space, Rick Galdi and Terry Cross.  Great testimonials from these guys.  The reporter did a good job contacting several people involved with the angel community who know the importance of developing a strong angel base of investors to really help our entrepreneurs get this economy going again. 

Other pieces in the article talk about the proposed new state tax credit and Ann Arbor SPARK’s experimental educational program.  This topic is getting some momentum.  If you know of someone who is interested in learning more about being an angel have them call me.

This issue is mostly about entrepreneurism in the state.  It’s very encouraging.  We’re in good company with communities all around the state.  Included in the publication are articles about the new incubator in East Lansing and a new initiative in Boyne City.  There is also a short article on a previous story about Houghton/Hancock SmartZone.  There’s a lot of good stuff going on in Michigan.

This is not my normal blog subject matter but it was prompted by this blog http://www.huffingtonpost.com/jeff-bocan/five-one-way-tickets-to-m_b_296000.html by Jeff Bocan.  Although our stories are different we at SPARK are hearing from more and more people like Jeff who are coming back to Michigan because it’s a great place to live, and great opportunity abounds.   Now is a great time and Michigan is a great place to be an entrepreneur.

The first loan was to RealBio in Kalamazoo.  They make a disposable cell bio reactor.  Advanced Battery Concepts of Midland, winner of the GLEQ business plan competion, received the second loan. FreeStride Therapeutics in Ann Arbor received the other loan. View the press release.

Here’s yet another tool to help accelerate high growth companies that will be the job creators in a diverse 21st century economy.

The first program is in two weeks, Thursday September 17.  The second one will be October 15.  Both programs will be held at SPARK Central, 330 E. Liberty, Ann Arbor and starts at 5:00PM.

The first program will be about control provisions.  Who is on your board, what voting rights do investors have, milestone obligations and other non-finacial terms.

You do not need to register to attend.  Learn more at newenterpriseforum.org.

The programs are on the usual NEF meeting days of the third Thursday of the month, Sept. 17 and Oct. 15.  We are going to host both at SPARK Central.  Note the venue as it’s different from the normal location of the Holiday Inn.

The first program will be about the items in a Term Sheet that go beyond the valuation or investment in the company.  We’ll expose you to the many restrictions and limitations not related to the dollar investment.  Who decides the makeup of your board?  Who gets a vote when it’s time to sell?  What are you repping and warranting to or about?  Heard of Blue Sky laws? 

Come hear from an awesome panel  we’ve put together for you.  An attorney, VC, and CEO will each give you their perspectives on the many details in a term sheet and explain the consequences of the many provisions in a financing.  Entrepreneurs, consultants, and deal makers should make an effort to attend. Register at the NEF web site.  Hope to see you there.