What the Louisiana Angel Tax Credit means for you

Last Friday HB 597, the Angel Investor Credit Program was signed into law by Gov. Jindal.   I fully expect this incentive to have a major impact on the flow of early-stage risk capital in Louisiana, but its important that you understand it and get an early jump in it to be best positioned to benefit. Now its time to figure out what this means for you.

Here are the bullet points:

  • A credit of 35% of the money invested by an accredited angel investor in a certified Louisiana business, credit delayed by 24 months
  • Credits capped at $1 million per year and $2 million total per business.
  • The total angel investor rebates are capped at $5 million.
  • Credit is transferable.
  • Program effective from Jan. 1, 2011, through July 1, 2015.

Beyond this, I have been getting some questions for clarification so I reached out to Erich Rapp at Kean Miller.  My questions and his responses are below.

1) The company has to be a Louisiana based company – can the investor be anywhere since it’s transferable?

It would appear that the investor could be from anywhere. I see no prohibition on out of state residents investing in Louisiana companies and I would not think that the La DED would object to having someone from another state invest in a Louisiana business.

2) Can the investor credit pass through to angel groups?

The credit can be earned by an individual or an “entity” such as the South Coast Angel Fund or Launch Pad Ignition. It could then be transferred to the owners of those angel investor groups or the benefits might be passed to those individuals automatically depending on the tax status of those entities

3) Does the 5m available prorate or is it first come first serve? What is the most opportune time to file?

The Act authorizes the La DED to determine the allocation method. They are expressly authorized to use a first come, first serve method, but it does not appear they are required to use that method. Anyone that wants the credits should probably get an application in as soon as the state will take such applications.

Have further questions? Did I miss something? Let me know in the comments.

How to reach busy people

It’s a simple formula: the higher level the person you are trying to reach, the busier they are.

Meaning they will have less time for lunch, coffee, phone calls, and to respond to your email.

Many entrepreneurs I work with get frustrated because they aren’t getting emails back from investors, or upset because I don’t have time to meet with them at their whim.  Don’t let this discourage you, they probably still want to help, but you have to know how to ask.  Here are some tips:

  • Send 3 sentence emails. Not 3 paragraphs, 3 sentences.  If it can’t be read in 15 seconds, it won’t. (ref)
  • Don’t ask for meetings, ask for the one thing you want.  If I can have a conversation over email rather than in person, that’s what I want.  I definitely prefer to meet people at networking events or have them drop in Launch Pad then to schedule lunches or meetings without a clear agenda.
  • If you don’t hear back, ping her again. Try a DM or a quick email.  The reality is most busy people can’t / don’t read all their email, so if you’re off the front page, you’re probably buried.  Don’t get frustrated and send a passive agressive email, just ping her again nicely.  You’ll be surprised how persistence pays off.
  • Don’t send attachments, send links.  I’ll click through to blogs & projects way before I read resumes.  I’d much rather get an actionable eventbrite invitation than a PDF attachment invitation I have to send an email reply to.
  • Make it easy for people to do what you want.  Pre-write a tweet and send it to them and ask them to tweet it.
  • Use good plain text formatting.  HEADERS are great capitalized and phrases are emphasized by bolding them.
  • Write a clear subject.  I like giving context at the beginning with brackets [Invite] or [Response needed].  Assume that the subject is the only thing they will read on their phone and give them enough information to want to open the email.  Subject lines of “hey” or “following up” get deleted.

What tips do you have on reaching out to busy people?

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