A new Connecticut jobs bill that includes a tax cut for angel investors – which goes into effect on July 1 – should encourage investment in small businesses in the state, according to the American Chronicle.
Angel investors are generally wealthier individuals who invest in companies that are still in their early stages, helping startups create a corporation and expand.
The paper reports that the bill will allow investors to deduct 25 percent of the amount they invest on their state personal income tax returns, with the maximum amount they can deduct capped at $250,000.
“Connecticut has been very aggressive on things like this,” attorney Jeffrey Blomberg told the paper. “They’re trying to grow young businesses.”
State representatives told the Chronicle that lawmakers consulted with a number of angel investors while writing the bill, and they are confident the bill will encourage new business formation and job growth in the state.
Entrepreneur magazine reports that in addition to funding, angel investors can also bring benefits to a small business owners by giving them advice on business matters that entrepreneurs may not be as familiar with.