House Bill 597, which passed both house and senate in the Regular session, 2011 of the legislature and now awaits the Governors signature, establishes the Angel Investor Tax Credit program. Under the program, investments in qualified Louisiana Entrepreneurial Businesses by eligible angel investors qualify for a thirty-five (35%) tax credit an the amount invested up to certain maximum limits over a five year period.

This is a major step forward for angel investing, a type of early stage investment that carries a high degree of risk. The South Coast Angel Fund (www.southcoastangelfund.com), the only Louisiana based angel fund, minimizes these risks by pooling the capital of member angels and spreading those risks over a range of early stage investments. The strategy to spread the risk as well as the disciplined review process established by the South Coast Angels goes a long way to reducing the risk, but the risk is never eliminated. The Louisiana Angel Tax Credit program establishes incentives to encourage these types of early stage investment.

Investments in early-stage companies are important to the economic health of the region. Choose Taurman, an organizer of the fund states that “these are the companies that drive innovation and create high paying jobs. This early stage investment is in short supply in Louisiana.” The South Coast Angel Fund is remedying that problem and the Angel Investor Tax Credit program will be a great help. “These credits are not incentives geared toward a project that starts and ends. These credits are for investments in companies that must be headquartered in Louisiana and remain here at least five years. These credits incent true economic development.” says Clayton White, another member of the South Coast Angel Fund.