Oregon lacks incentives for angel investors

A report by Technology Association of Oregon recommends tax credits for high-risk investments.

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A report recently released by the Technology Association of Oregon recommends tax credits for high-risk investments.

It contends the absence of such incentives is why Oregon lags in securing angel investments, the Portland Business Journal writes.

More than half the states have incentives such as immediate tax credits for qualifying investments or other tax reductions to encourage re-investing in startups. Oregon has none.  Access to capital is always at the top of the list when entrepreneurs rattle off the challenges of starting a business. The difficulty can be compounded for startups located outside of the Tier One hubs like Silicon Valley or Seattle.

“Other states are providing tax incentives to support this because they understand the power of these incentives to multiply a modest government investment into large economic growth,” said Chris Tobias, of GE Healthcare and chair of the TAO Digital Health Committee.

From a story written by TAO, published by the PBJ:

Here’s the good news: states offering tax credits for angel investments have seen significant shifts in high-risk investor behavior, as investors take advantage of the opportunity to mitigate the risk by making investments in select states, and in key industries, as dictated by the conditions of the tax credits. They still have to pay the taxes on proceeds if they strike gold with an investment, but in the meantime, they can spread their high-risk investment dollars to companies in the critical stages of start-up survival, while taking less personal risk with the investments that they make.

As more investment dollars flow to early-stage companies, jobs are added to local economies, additional tax revenue is generated, and emerging high-tech industries are bolstered. So what about the entrepreneurs who move to a state with a better tax climate for investment, and then succeed and make millions? Why aren’t they coming back to invest their dollars in the state that they love? Given the risk, would you?

Portland ranked 132 of 150 cities in access to financing in a Best Cities to Start a Business study.