Page 29 - Innovation Delaware 2019

WHY DELAWARE?
GETTING YOUR
Tax credits, angel investors make Delaware fertile ground for innovators
Delaware is moving up
the ranks of the State Technology and Science Index. The STSI, an annual
report published by nonpartisan think tank The Milken Institute, ranks each state in the nation on the science and technology capabilities, access to capital and highly skilled workforce that help innovative businesses grow.
In 2018, Delaware moved to No. 7 in the nation, up three spots from the previous report in 2016. That’s a higher ranking than Pennsylvania (13), New York (20) and New Jersey (21).
So what happened to set Delaware apart? According to STSI, Delaware stands out for:
u Success in attracting venture capital
funding and deals.
u The new Angel Investor Job Creation
and Innovation Act, which “provides a 25% tax credit for companies em- ploying fewer than 25 people who are engaged in R&D activities in select high-tech fields,” the report notes.
u The creation of major lab and incubator spaces for emerging companies, such
as Delaware Innovation Space and the University of Delaware’s STAR Campus.
The Angel Investor Tax Credit, in particular, is a crucial asset for compa- nies looking to get started or grow in Delaware. The tax credit’s implemen- tation in 2018 was applauded by Mike Bowman, one of the most prominent members of Delaware’s startup fund- ing community: “I have witnessed the remarkable ingenuity of Delaware’s
Ideas Funded
scientific entrepreneurs who dedicate themselves to R&D in the pursuit of dis- covery. ... The Angel Investor Tax Credit should be a stimulus for new investors
to support entrepreneurs in Delaware.” Bowman is president of the Delaware Technology Park, state director of the Delaware Small Business Development Center, a general partner at Leading Edge Ventures, associate director of the University of Delaware’s Office of
BY ROGER MORRIS
Economic Innovation and Partnerships, and a member of the board of directors at First State Innovation.
The tax credit “will help Delaware’s existing innovative businesses grow, as well as attract new startups to locate here. The First State [also] has one of the most robust R&D tax credits in the nation. When you consider the federal R&D tax credit and the Angel Investor Tax Credit, Delaware entrepreneurs can
#DELAWARECONNECTED
Connections are easy in Delaware’s tight- knit community of innovators, where startup founders rub shoulders with industry leaders and policymakers. Here’s a story of a connection that made a difference:
WHO: Joe Arsenault, Owner, Mobtown Offroad
CONNECTION: Linda Parkowski, Executive Director, and her team, Kent Economic Partnership
WHAT HAPPENED: Mobtown Offroad manufactures after-market accessories
for Toyota trucks. The company launched
in 2015 as a 50-50 partnership between Arsenault, who has a background in
metal manufacturing, and a friend with an engineering degree. “When we design a product, we put a lot of engineering behind it,” says Arsenault. Arsenault and his partner bootstrapped the company from their own bank accounts, but asked the Kent County Partnership for help in getting to the next level.
SINCE THEN: The partnership is assisting Mobtown in two ways, says Arsenault: obtaining capital to purchase manufacturing
equipment the company is currently having to rent, and finding employees with the expertise to operate that equipment. “[The partnership] can reach out to different people they work with to help us,” says Arsenault. “They got me in touch with somebody at Polytech High School, where they teach fabrication courses.” Hiring those additional employees, he adds, will allow Mobtown to keep up with its rising sales and stay on a growth trajectory.
JOE ARSENAULT
INNOVATION DELAWARE 27
JUSTIN HEYES/MOONLOOP PHOTOGRAPHY