“Every time a bell rings, an angel gets their wings.” Zuzu, It’s a Wonderful Life. (1946)
The bells have been ringing like crazy in Wisconsin! HarQen owes a deep level of gratitude to the angels of Wisconsin. When we first launched in 2007, it was Wisconsin angels that gave us our seed funding. And then when the economy entered the Great Recession, HarQen was carried through on the wings of angels.
Although HarQen’s first business model – advertising on our comedy property ComicWonder.com — did not qualify for Wisconsin tax credits, we revamped and retooled our company so that in 2009 we became a qualified investment vehicle for our Wisconsin investors. Thanks in part to this accreditation, HarQen led to an oversubscribed round in 2009, a time when few other companies were able to find any investment dollars at all.
The reason why Wisconsin’s early stage investment model has worked so effectively is that it is providing a strong incentive for private investors to become more active via the 25% investment tax credit. Since its inception in 2005, $27.4 million in tax credits have been claimed resulting in $109.5 million raised by early stage companies. Recently, Wisconsin’s neighbors, Illinois and Minnesota, have enacted similar legislation modeled from Wisconsin’s program. Nothing speaks to success better than imitation!
Now here is some real yuletide cheer:
Starting in 2011, the Accelerate Wisconsin investment tax credits will grow dramatically from $6.5 million per year to $20 million, with an additional $250,000 for investments in qualified nanotechnology businesses. While we are still trying to figure out how to qualify HarQen for the nanotechnology kicker, our investors know that we are nothing less than creative.