Opportunities and advice for angel investors.
Angels are people who invest in startups in exchange for equity. Vital to the entrepreneurial scene, angels provide entrepreneurs with seed capital, which is notoriously difficult to raise. They’re also often entrepreneurs themselves, or industry experts with a personal interest in helping the company succeed.
Certain Connecticut businesses may qualify to participate in the Angel Investor Tax Credit Program if their principal place of business is in Connecticut and they are engaged in bioscience, advanced materials, photonics, clean tech or IT. They must also have:
Interested businesses can apply using the application below. Once we receive your completed paperwork and payment, the qualification process takes no more than 10 business days. Please note: all applications must contain the original wet signature.
Once a year, on their approval anniversary, Qualified Connecticut Businesses are required to recertify their application information. CI sends out forms prior to the expiration date.
Connecticut Business Qualification Process
The application process involves 4 steps:
1. Interested applicants must complete and execute the Qualified Connecticut Business Application. The application along with all documents requested under Part E of the application and the non-refundable application fee of $250 (payable to Connecticut Innovations, Inc.) must be submitted to:
Connecticut Innovations, Inc.
865 Brook Street
Rocky Hill, CT 06067
Attn: Stepheni Harpin
2. Once the complete application and requested documents are received they will be reviewed to determine whether the applicant meets the criteria established by Section 183 of Public Act 16-3.
3. The applicant will be notified by letter as to the results of Connecticut Innovations’ review of its application. If the application does not meet established criteria, the letter will outline the reasons for denial. If the applicant meets the established criteria it will receive a letter stating such and will be placed on the Qualified Connecticut Company List. The Qualified Connecticut Company List contains the following information about the Connecticut Company:
o Company Name, Location and Contact Information
o Company’s Business Activity
o Amount of Investment Sought by the Company
o Type of Qualified Security to be issued by the Company
4. Once a year, on the anniversary of its approval as a Qualified Connecticut Business, the applicant will be required to recertify the information contained in the application originally submitted to CI to remain on the Qualified Connecticut Company List.
You can participate in the Angel Investor Tax Credit Program if you meet the definition of an accredited investor, or a network of accredited investors, found in Section 183-704d of Public Act 16-3. Your investment of $25,000 to $1,000,000 qualifies you for a 25% credit on your state income tax.
Prior to making an investment, the company must be approved by Connecticut Innovations. Note that there are two steps to the process. The process takes five to seven business days once we receive your application. First, you must ask for a tax credit reservation number. Once you receive the number, you’re ready to invest. After you’ve made the investment, you must register for an angel tax credit certificate using the form below. Please note that the following are not eligible to invest: Venture capitalists, banks, savings and loan associations, trusts, insurance companies and similar entities whose business activities include venture capital investments. People who control 50% or more of the qualified business receiving the investment are also not eligible to participate.
Angel, Angel Network or Angel Entity Certification, Tax Credit Reservation and Tax Credit Request Process
A business must be certified as a Qualified Connecticut Business (QCB) by Connecticut Innovations, Inc. prior to the initial investment in order to be eligible for investment tax credits.
The Angel Investor should complete and return the Angel Investor Certification/Request for Tax Credit Reservation Form to CI in order to be certified as an accredited investor and to receive an Angel Investor Tax Credit Reservation Number. This reservation number will allow the investor to move forward with the QCB investment transaction and request the tax credit once the transaction is complete. The reservation number will expire 45 days from its issuance. It is important to request a reservation number prior to commencing the transaction to ensure your place in the queue since there is an annual limit to the amount of tax credits that can be issued by Connecticut Innovations.
The Angel Investor Certification/Request for Tax Credit Reservation Form should be sent to:
Ms. Stepheni Harpin
c/o Connecticut Innovations, Inc.
865 Brook Street
Rocky Hill, CT 06067
Angel Investor Tax Credit Reservations are issued on a first come, first served basis on the date that Connecticut Innovations receives the Angel Investor Certification/Request for Tax Credit Form. You will be notified of this approval by email.
Once the investment transaction is complete, the angel investor and the QCB complete an Angel Investor Tax Credit Request Form and submit it to CI for processing. All documents requested must be included with the form when it is submitted to CI. This form should be submitted to the address above. Once received, CI will process the request and issue the tax credit authorization document.