It's been a busy Legislative Session so far at the Department of Commerce. In addition to updating the Legislature and providing annual reports on our state’s incentive programs, our agency has some key priorities for legislation that will be taken up in the current Legislative Session. This includes the renewal of the Kansas Angel Investor Tax Credit Program.
In today’s blog, I’d like to share more about the program and discuss the enhancements made by the legislation (HB 2689) that is currently being worked in the Legislature.
The “Kansas Angels” program helps provide access to capital for Kansas start-ups. At its core, the program brings together accredited angel investors with qualified Kansas companies seeking seed and early-stage investment.
So, let’s start with the angel investors themselves. These are folks who believe in the mission to grow and start more businesses right here in Kansas, and they're willing to put some "skin in the game" in order to give these companies a chance to succeed. They must register and receive accreditation in order to be eligible for a tax credit of 50% of their cash investment into a qualified Kansas business. I’d encourage anyone who may be interested to read through our website and reach out to our staff listed on that page to understand more about who can qualify as an angel investor.
We’re looking to reach more folks who need to hear about Kansas Angels! Last week, our Program Manager, Rachéll Rowand (right), participated in a panel at KC Collective, an organization that supports start-up growth in the Kansas City area. We’re grateful to have hardworking and dedicated staff who have a passion for growing Kansas companies. Any interested Kansans should reach out to our team to get started with Kansas Angels.
The most exciting element of this program is the list of innovative and dynamic Kansas companies who are eligible to receive investment from Kansas Angels. These are the entrepreneurs and early-stage businesses who keep our state’s economy vibrant and keep Kansas at the forefront of growth in the economy and jobs of tomorrow.
I hope folks will take a look at these great Kansas start-ups, and do what you can to support their future success in our state. In addition to highlighting other exciting companies in our state, we are working to highlight more of our Angel-qualified businesses through business features and other communications avenues.
Check out this video on Particle Space:
If you’re engaged in an early-stage Kansas business, I’d highly encourage you to reach out to Rachéll Rowand to learn more and potentially access the additional capital you need to keep building for the future.
Yesterday, the House Committee on Commerce, Labor and Economic Development held a hearing on HB 2689. In addition to extending the program for 5 more years, this bill provides additional support to Kansas companies by increasing the total amount that an angel investor can contribute as well as the amount an angel investee can receive from the program.
We appreciate all the partners who joined us or provided testimony for the bill hearing yesterday. It’s important that our legislators hear from the folks who have directly benefitted from this important investment. So, having some of the amazing companies and groups from the start-up community on hand to share their stories makes a world of difference in the effort to keep the Kansas Angels “in our corner!”
Among many others, thank you to: The Enterprise Center in Johnson County, The KC Tech Council, BioKansas, BioNexus KC, Women’s Capital Connection, The Wichita Regional Chamber of Commerce, The Overland Park Chamber of Commerce, The Greater Kansas City Chamber of Commerce, Real Quantum, Artio Medical, ELIAS Animal Health and entrepreneur and angel investor, Rep. Stephen Owens.
In his testimony, Jeff Shackelford (President and CEO of the Enterprise Center in Johnson County) said: “When early-stage Kansas entrepreneurs pitch to our groups, the first question asked is: ‘Do you qualify for Kansas Angel Investor Tax Credits?’ If they do, the interest level of the investors is immediately and significantly heightened.”
“Kansas companies benefiting from this program have raised over $486M in working capital and created over 2,600 Kansas jobs. And, for every $1 in tax credits, almost $7M in capital is raised. By investment standards, 6x is a highly successful return. This credit has directly created jobs, better leveraged private dollars, attracted new capital to Kansas and helped start-up companies secure the capital they need to accelerate forward and create new Kansas jobs,” said Shackelford.
The stories from Jeff and others showed that, through the Kansas Angels program, angel investors will invest more dollars, more frequently in Kansas companies. This helps provide critical support to the start-up community in Kansas and gives our state and its companies an edge that does not exist in other states.
No doubt, a focused effort to encourage new start-up growth will play a large role in our plans to grow Kansas in the years to come. So, we hope that by the end of the Session, we’ll be moving forward with this important tool still in our toolbox as a state.
We must help more entrepreneurs get their ideas off the ground and turn them into sustainable, scalable businesses. The Angels program helps them achieve their dreams by making capital more accessible for them to build for the future. And their dreams today mean growth for our state tomorrow, which is a win for all who call Kansas "home."
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