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PA Gov. Wolf Signs Angel Investment Bill Providing $ 5 Million to Startups | Ballard Spahr srl

Summary

Pennsylvania Governor Tom Wolf signed a bill to create a $ 5 million angel investment venture capital program to provide grants to Pennsylvania startups.

The result

  • Qualified companies and angel investors (on behalf of qualified companies) can apply for a grant to the program.
  • Qualifying businesses must have fewer than 100 employees, the majority of which are located in Pennsylvania.
  • The program will create a business environment in Pennsylvania that promotes and attracts seed funding for high growth startups.

The bottom line

Start-ups with the majority of their employees based in Pennsylvania can apply for grants from the new venture capital angel investment program.

Included in the Commonwealth Tax Code (Bill 1348) adopted by the General Assembly and approved by Governor Tom Wolf on June 30, 2021, is a new $ 5 million angel investment venture capital program (the “Program”).

The program provides grants to Pennsylvania businesses with fewer than 100 employees. Eligible businesses must also retain 51% of the Commonwealth workforce and cannot have been in business for more than five consecutive years at the time of application.

The main objective of the enterprise should be the commercialization of research and development or the application of new technologies. Companies deemed to be of great benefit to Pennsylvania’s economic growth will also be considered.

Firms that have received more than $ 2 million in private equity investments or $ 1 million from a single investor are not eligible. Businesses engaged in real estate, insurance, or professional services provided by an accountant, lawyer or doctor are also not eligible. Businesses engaged in retail are not eligible unless the primary purpose of the business is to support and develop e-commerce.

A qualified business can apply directly to the Commonwealth for a grant. Angel investors can also apply for a grant related to a qualifying investment in a qualifying business enterprise. The Commonwealth will review each application to determine the suitability of the applicant. Applicants should expect to receive notification of approval within 30 days. The $ 5 million program runs for fiscal year 2021-2022 in Pennsylvania, ending June 30, 2022.