The new local chapter of the Angel Capital Group held its first meeting last Tuesday night at the College of Charleston’s Tate Center downtown.
More than 25 “angels” showed up, and several more tuned in via high-definition web video from as far away as New York and Colorado, to hear Ascendant Diagnostics pitch investments in its breast cancer biomarkers, according to ACG’s Charleston chapter president, Gavin McCulley.
“It was really fantastic,” McCulley said, noting the event raised “six figures” for the biotech firm.
Aside from the promise of better early detection of breast cancer, McCulley said another factor attracted the angels, wealthy individuals who want to invest in early-stage companies, to the Arkansas-based firm: the 33 percent transferable tax credit Arkansas offers on such investments.
That means these angels get a third of their money back, and if they live out of state, they can sell their tax credit to a person or corporation in the state, like Wal-Mart in Arkansas. “That is very powerful,” McCulley said.
Could a similar incentive happen in South Carolina, attracting more investment in start-ups here?
The short answer is we’ll know next week when the state legislative session comes to a close.
The longer answer stretches back a couple of years when the Bill Wylie Entrepreneurship Act of 2011 was introduced.
That bill would have allowed accredited angel investors, anyone whose net worth exceeds $1 million or who makes more than $200,000 per year, to claim a 35 percent tax credit on money they put into small, early stage South Carolina companies. The bill would cap total tax credits at $5 million per year.
It failed the past two years, but this year, the bill, rebranded as the High Growth, Small Business Job Creation Act, is again on the cusp. Similar versions of the bill have passed both chambers, according to SC BIO’s Wayne Roper, and now must be reconciled before it can become law.
The Senate is no longer consumed by the budget, which passed late last week, so the angel bill has a chance, Roper said, but it’ll likely come down to the wire again.
“We know there’s interest in angel investment all up and down the coast,” Roper said, pointing to last week’s ACG event. “This incentive will definitely generate economic activity far exceeding the cost of the credit.
“We just need to move through the mechanics to get it done,” he said.
That and maybe a prayer to the chapter of angels above.
Reach Brendan Kearney at 937-5906 and follow him on Twitter at @kearney_ brendan.