Page 30 - Innovation Delaware 2019

MIKE BOWMAN
DELAWARE INNOVATION SPACE
now access a true trifecta of benefits,” said Delaware BioScience Association President and CEO Helen Stimson when the Angel Investor Tax Credit was signed into law.
Delaware’s R&D tax credit, which took effect in 2017, provides signifi- cant benefits for startup businesses in
particular. If a company’s R&D expenses result in a credit that is larger than its tax liability, the company gets a refund and does not have to pay state income taxes, according to Jennifer Hudson, director of the Delaware Division of Revenue. What’s more, businesses with less than $20 million in gross receipts can claim the R&D credit at double the rate
permitted for larger businesses. Another crucial asset for Delaware
companies: a new law authorizing “equity crowdfunding,” which allows new businesses in Delaware to raise up to $1 million a year by offering stock to small investors.
INVESTOR NETWORKS PROVIDE FUNDING INFUSIONS
In addition to tax credits, Delaware companies have access to funding through a network of investors commit- ted to launching innovative ideas into the commercial space. Sources of funding include:
u Delaware Innovation Space — This entrepreneurial incubator recently launched First Fund, an initiative that will provide up to $75,000 in funding to startups in the advanced materials, bio- tech, chemical, health care, nutrition and renewable energy industries. The fund- ing comes in the form of a convertible note (essentially, a loan that converts into equity for the investor) and allows startups to access Delaware Innovation Space resources more quickly than they might otherwise be able to.
u The FSI Angel Network — The angels in this network are affluent investors, most from Delaware and all from the
Delaware Valley, who do not pool their money but instead are able to write a check for a minimum $25,000 individual investment. All the targeted investment areas are high tech, but they widely range from financial technology to advanced materials.
u Leading Edge Ventures — Leading Edge is looking for opportunities with launch-imminent ventures or compa- nies that are seeking capital to expand and have clear evidence of demand. They also need to be able to produc- tively and efficiently deploy invest- ment capital. The company, which has worked with several Delaware-based startups, can invest $50,000 to $250,000 initially and up to $750,000 over time.
u Robin Hood Ventures — A group of angel investors focused on early-stage, high-growth companies in the Greater Philadelphia region, Robin Hood as a single entity generally invests up to $1 million over the lifetime of a company, and collaborates with angels, institutions and VCs within its network.
u Delaware Crossing Investor Group — This network of current and former executives provides mentorship and funds to early-stage and growing companies. While Pennsylvania-based Delaware Crossing doesn’t have any Delaware companies in its current port- folio, it has invested in Delaware in the past and is looking to do so again, says Elizabeth Sigety, managing director and co-founder. ID
LOOKING FOR INVESTORS?
FIND LISTINGS OF FUNDERS AND ECONOMIC- DEVELOPMENT ORGANIZATIONS ON PAGE 140.
FUNDING
by the Numbers
Up to
$75,000
Funding available to very early-stage startups, courtesy of the Delaware Innovation Space’s new First Fund
230
Number of angel investors in First State Innovation’s FSI Angel Network
Up to
$750,000
Lifetime investment available to Leading Edge Ventures’ portfolio companies
SOURCES: DELAWARE INNOVATION SPACE, FIRST STATE INNOVATION, LEADING EDGE VENTURES
28 DelawareBusinessTimes.com
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