One of the areas this blog covers are policies that impact entrepreneurship in Maine. One policy ripe for discussion is the extension of Seed Capital Tax Credit (“SCTC”) by the Maine Legislature and the Governor.
I’m not under any notion that this is easy. I know from experience that crafting a bipartisan budget for Maine is a very, very difficult thing. There are many hours that go into it and there are many hard choices that get made. In fact, the essence of the unanimous vote by the Appropriations Committee is compromise itself. No one gets everything they want.
But there will be some bills left on the Appropriations Table that can be considered for funding (like this one, LD 743). For the continued growth of Maine’s economy, I respectfully request that you extend the seed capital tax credit.
For those unfamiliar with the SCTC, you can read all about it from this great Mainebiz article in March. Additionally, here’s a great description of its importance from a Maine entrepreneur who benefited from the credit when they raised capital for their start-up in 2012:
The Seed Capital Tax Credit Program offers a crucial bridge between “friends and family” startup funding and “institutional / venture capital” growth financing. Maine has a number of great efforts in place to help grow the next WEX or Idexx, including MTI, FAME, and MCED, but the Seed Capital Tax Credit Program may be the most important of these, because it allows a company to work through the challenging stage between idea/prototype and meaningful revenue/profit.
We’ve just begun to build some momentum in this space vis-à-vis the rest of the country. Maine has gotten some really good news about its level of venture funding lately. I specifically wrote about the fact that we improved our score in the Milken Index earlier this year almost entirely on the back of our improvement in venture funding.
Moreover, Maine’s angel investors made the TOP 10 states in the country for angel capital funding organizations last year. I mean, when was that last time that happened?
We need to continue to find tools to encourage growth, to accelerate growth, because it all leads to job creation and a stronger economy here in Maine. I can say without a doubt, this program is a HUGE tool in our toolbox.
Whatever your political persuasion, there is something for everyone to support. If you’re thing is free enterprise, this is right in your wheelhouse. The SCTC encourages private investment in private companies that are high growth and high impact for Maine’s free enterprise system. If you’re thing is caring for Maine’s most vulnerable, bringing more investment into Maine companies for growth increases tax revenue and helps create jobs here in Maine. And as one of Maine’s former governors was fond of saying, “the best social program in the world is a job.”
Finally, I know there are many, many things to balance as we get to the end of this Legislative session. I, for one, cannot imagine the toll that the budget process had had on the good folks who have been sifting through the many requests and trying their hardest to do what’s right in their minds. For all the work you’ve done, I’m certainly appreciative. But Maine is poised for a new level of recognition as a place that entrepreneurs are excited to be and this is a great opportunity for us to build on that momentum.
Please extend the seed capital tax credit.