Startup Act 2.0 – Angel Capital Association Supports

by dave


As part of our work to ensure policies that catalyze angel investing, ACA has endorsed the Startup Act 2.0, a bi-partisan bill in Congress aimed at creating an environment that leads to more innovative startup companies and their related jobs. ACA endorses this bill for a few reasons:

  • It would make permanent the 100 percent exemption of gains on Qualified Small Business Stock (sometimes called Section 1202).
  • It calls for visas for foreign born entrepreneurs and graduate students in STEM fields, an issue many of our members have voiced support for.
  • It creates a targeted research and development tax credit for young startups less than five years old and with less than $5 million in annual receipts. This R&D credit is designed to allow startups to offset employee taxes, freeing up resources to help these young companies expand.

Our team is currently working with bill sponsors in both the Senate and the House to amend the bill to make several improvements to rules for Qualified Small Business Stock, reducing the holding period from 5 years to 2 or 3 years, increasing the 1045 rollover period from 60 days to a year to allow angels to re-invest gains with good processes, ensure convertible notes qualify, and a number of technical “fixes” so that the program is more usable by angel investors.

We will keep you updated on the progress of the bill and our progress in gaining the improvements. We are also pursuing other bills to accomplish the goal of making the 100 percent exemption permanent even before year’s end.

WE NEED YOUR HELP! In doing our public policy work, we appeal to you for your financial support to ensure ACA has the expert resources needed to be successful. We have created the ACA Legislative Fund to become most effective in representing you and being your voice in Washington. This is our “ask” of you: we need an additional $50,000 to hire this lobbyist. The board and the public policy committee have started a special “fund?raise” to meet this need. We have funds collected of $13,000 at this time. Thanks to those who have contributed already!!! Any amount that you can donate to support this cause will be much appreciated. The money will be used only to hire lobbyists who will be our “eyes and ears”, communicators and connectors in DC – this is not a Political Action Committee. More information is in this letter.

As always, please feel free to let us know your ideas and concerns related to public policy issues.
ACA Executive Director

About Scale Finance

Scale Finance LLC (www.scalefinance.com) provides contract CFO services, Controller solutions, and support in raising capital, or executing M&A transactions, to entrepreneurial companies. The firm specializes in cost-effective financial reporting, budgeting & forecasting, implementing controls, complex modeling, business valuations, and other financial management, and provides strategic help for companies raising growth capital or considering M&A/recapitalization opportunities. Most of the firm’s clients are growing technology, healthcare, business services, consumer, and industrial companies at various stages of development from start-up to tens of millions in annual revenue. Scale Finance LLC has offices throughout the southeast including Charlotte, Raleigh/Durham, Greensboro, Wilmington, Washington D.C. and South Florida with a team of more than 30 professionals serving more than 100 companies throughout the region.

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