Angel Investor Tax Credits 101

What are angel investors and why are they important?

• Angel investors provide financial support to new businesses who have promising ideas and technologies but limited opportunities to access capital at early stages of business development. 

• Angel investors are accredited investors who take informed risks that give new businesses a runway to further develop their ideas and grow. 

• Angel investors also often help businesses they invest in by serving on the business’s board, being an informal advisor, and making connections to other investors. 

• Without angel investors, many promising new businesses fail to take root and close.

What is an angel investor tax credit?

• An angel investor tax credit is a state-level financial incentive to encourage investment in early-stage, innovative companies operating within the state. 

How does an angel investor tax credit work?

• Investors get to claim a credit on their state income taxes for a percentage of the money they invest in qualifying startups. 

• Early-stage, innovative companies get much-needed capital to fuel business growth.

Why does Missouri need an angel investor tax credit?

• The inability to access capital is the number one barrier preventing small startups from flourishing in Missouri. 

• The market for early-stage investing in promising new businesses doesn’t currently meet the needs of Missouri entrepreneurs. Incentives are needed to build this market.

What are the benefits of an angel investor tax credit?

• Angel investor tax credits stimulate investment in startups—the source of 81% of new jobs in Missouri. 

• With capital to expand, these new businesses create jobs, foster innovation, and put down roots in Missouri–helping grow our state’s economy.