By David A. Wise
WisBusiness.com
A number of Wisconsin investment and economic development groups are joining forces to push for changes to the state’s investment tax credit law for high-tech startups.
Competitive Wisconsin’s Bill McCoshen announced the formal launch of the statewide effort during a Wisconsin Innovation Network luncheon today in Brookfield on ways to improve the tax credit program.
The group, called the Wisconsin Growth Coalition, was started recently with Competitive Wisconsin, the Wisconsin Technology Council, Thrive, and Wisconsin Venture Partners and has now added statewide partners such as Milwaukee’s M7, DaneVest, the Central Wisconsin Business Angels, the Wisconsin Biotechnology and Medical Device Association, BizStarts, New North and others, McCoshen said.
The group is seeking changes to Act 255, which provides angel and venture capital investors a 25 percent tax credit for investing in qualified early stage companies in the fields of advanced manufacturing, biotechnology and information technology.
Changes called for during the luncheon today included increasing the annual statewide cap for the credit from $11.5 million to $50 million, increasing the amount individual companies can access in credit-eligible dollars from $4 million to $8 million, removing sub-caps on investing entities, making credits for investment groups transferable and other changes.
McCoshen told WisPolitics after the luncheon that primary purpose of the group is to focus, at least initially, on the Act 255 changes.
“The primary purpose is to get this information to lawmakers,” McCoshen said, “to let them understand how important it is to create more of an entrepreneurial climate in Wisconsin to grow jobs.”
McCoshen said the group will likely not be a lobbying organization per se, “but all the members will be actively involved and we’ll be speaking with one voice when it comes to changes with Act 255.”
During the presentation, McCoshen said the challenge is that lawmakers can sometimes be impatient and it can take several years to see the return on some of the investments under the program in terms of job creation and increased revenues.
“Our challenge with lawmakers is to ask them for patience, this will pay off.,” McCoshen said.
McCoshen told audience members that he hoped some of the changes could be included in the governor’s budget and that other parts could come through the legislative process.
John Neis, managing director of Venture Investors LLC and leader of the discussion on proposed changes, raised the prospect the governor could include some changes in a stimulus bill.
“In my view, we can’t get this done soon enough,” Neis said.
Teresa Esser, managing director of angel investor network Silicon Pastures, pointed out the need for changes in the credit limits, noting that her group quickly hits its cap under the credit and that a higher cap would encourage more investment. She pointed out the credit not only encourages people to invest, but the amount credited back is often reinvested.
State Sen. Ted Kanavas, R-Brookfield, who attended as an audience member, advocated seeking a cap greater than $50 million, saying that the sum wasn’t a lot of money in terms of investing in the economic future of the state. He said he hopes the Doyle administration approaches changes to Act 255 in a “logical and forthright way.” He added that during the economic downturn, it’s a “perfect time to retrench our economy.”
