Many people in the startup and investing community have taken advantage of the North Carolina Qualified Business Venture (QBV) and Qualified Grantee Business (QGB) tax credits since 1999. These credits help minimize the investment risk to early stage investors as they offer a 25% return of the investment in the form of a North Carolina income tax credit.
Unfortunately, there are also a fair number of people that are involved in early stage investments that have not been aware of nor taken advantage of the credit. There are also people that do not realize the impact that the discontinuance of this tax credit will have for startups in NC as they attempt to raise funds. NC is viewed as a startup friendly state with a thriving entrepreneurial culture. The heart of that lies in the Raleigh-Durham area, but Charlotte, Asheville, and Wilmington are building cultures of their own. We need to do everything we can to continue to encourage this strength of NC and its impact on our economy.
Entrepreneurs and investors in the state of NC need to take part in two calls to action before 2013 is over. One is to take advantage of the credit before it expires. That can sometimes be easier said than done as the business in which it is being invested in needs to be registered with the state for the program. As with anything else with government entities, that won't necessarily be a quick process. It's worth a look if you can get it done. If not, you may want to consider whether other ventures are qualified and the timing of investments. In addition, most Inception Micro Angel Funds (IMAF) are generally Qualified Grantee Business that supports the tax credit without the individual business having to be registered.
The other action is to voice your thoughts with your NC legislators so that they will renew the legislation for 2014 and beyond. A study by the North Carolina Biosciences Organization in 2009 found that in the first decade of the 21st century companies which have been approved for QBV status raised almost $2 billion in funding. We need to let our legislators know how important it is to our efforts, our local and state economy, and the future that entrepreneurship brings for this great state.