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Angel Groups Now Eligible for LaunchTN’s $50,000 Angel Tax Credit

  By John Lanahan, LaunchTN Director of Capital Formation

Taking advantage of this incentive just got a whole lot easier. Here’s why

We’re excited that the legislature and Gov. Haslam passed legislation expanding eligibility for the Angel Tax Credit to include angel groups, SPVs or Special Purpose Vehicles, and LLCs. Previously only direct investment was eligible for the incentive, and this change in legislation opens up access to those who prefer to invest “indirectly” or as a group. We have $4M in credits to disburse in 2018.

The Angel Tax Credit provides up to $50,000 against Hall income tax liability to those who invest in pre-qualified, Tennessee-based companies. We introduced the Angel Tax Credit back in 2017 to unlock more early-stage capital for entrepreneurs by incentivizing angels to invest. We were excited by the initial success (check out this recap of how many credits we issued) but felt the program could be improved by including angel groups to open up an even larger pool of capital.

This change is retroactive to Jan. 1, 2018, and given our intention is to encourage new angels to get involved with early-stage investing, we believe the opportunity to invest as a group allows for a flattening of what’s traditionally a steep learning curve. Angel groups are great for less experienced investors because they decrease the risk for any single investor and also increase the amount of expertise in an investment.

Startups prefer single entities to lots of individual angels to keep a clean cap table with less complexity around administration and investor communication.  

Don’t miss out on this opportunity to receive a $50,000 credit on your Hall income tax. Get approved today for the Angel Tax Credit!


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