TechPoint launches VCI Marketplace
TechPoint’s Senior Relationship Manager Roger Shuman is about to get a whole lot busier, and that’s a good thing for Indiana startup companies.
Shuman, who leads most of TechPoint’s investor-startup connection activities, has been tasked with implementing a new, free service called the Indiana VCI Marketplace. It’s designed to increase use of the state’s Venture Capital Investment (VCI) tax credit by out-of-state investors in exchange for their capital funding support to Hoosier entrepreneurs in tech or any other sector.
The tax credit has existed since 2003. It enables Hoosiers who invest in Qualified Indiana Businesses to lessen their income tax liability. In 2020, the Indiana General Assembly amended the incentive to enable out-of-state investors – who don’t pay Indiana taxes and therefore derived no benefit from the credit as originally structured – to also benefit by selling their earned VCI tax credits (minimum of $10,000 ) to Hoosier taxpayers who can use them.
The out-of-state investors have largely been on their own to learn about the tax credit, collect them and then find buyers for them. The VCI Marketplace will provide information while Shuman will provide the connections.
“The VCI tax credit transferability is a benefit aimed at attracting more out-of-state investors across-the-board,” said TechPoint President and CEO Ting Gootee. “We hope to help our entire startup community to realize their full potential by providing an efficient avenue for their out-of-state investors to realize the benefit from the tax credit. Our marketplace will help drive more innovation and entrepreneurship throughout the state and in every sector. We see this kind of program as key to our mission.”
David Roberts, executive vice president of entrepreneurship and innovation at the Indiana Economic Development Corporation (IEDC), said the VCI initiative is designed to help tax credit holders more easily monetize their credit.
“In an already thriving entrepreneurial ecosystem, this tool will help more small businesses raise much-needed capital from out-of-state sources and make it more user-friendly for national and global investors to put money to work in Indiana,” he said.
Shuman said the idea for the marketplace came from Gootee.
“Ting’s 11 years with Elevate Ventures connected her to investors all over the country, and she understood their pain points with implementing the incentive,” he said. “This makes it easier for them, which makes it better for Indiana entrepreneurs.”
Shuman is already working with one out-of-state investor, who has credits to sell, and 20 Hoosiers who’ve said they’re interested in buying them and/or learning more about how the VCI tax credit process works.
“There’s clearly interest when people understand the opportunity and know there’s a reliable and credible organization ready to help them through it while protecting participants’ privacy,” Shuman said. “In the past, they’ve had to figure this out themselves.”
Anyone interested in buying some or all of the available tax credits should visit the marketplace on the TechPoint website and register. Shuman will evaluate the submissions and provide introductions based on the best matches.
The VCI tax credit process is implemented by the IEDC and is one of the most widely utilized tools for Indiana startups to attract investors. Until now, there has been no established exchange or service that helps out-of-state sellers and potential Hoosier buyers to discover each other or work through the process of implementing the VCI tax credit.
Jennifer Hallowell, executive director of the Indiana Technology & Innovation Association, which lobbied the Indiana General Assembly to make the legislative change, said the Indiana VCI Marketplace will be a great help to Hoosier entrepreneurs.
“The Venture Capital Investment Tax Credit is a tremendous asset to Indiana startups seeking investment and allowing for the transferability of that credit was critical to attracting more out-of-state investors,” she said. “We’ve heard from entrepreneurs, tech companies and investors about the need for a marketplace to help facilitate the transfer of these credits. We’re excited that TechPoint is taking up this effort and believe it will help encourage more investment into Indiana companies from both in-state and out-of-state investors.”