February 5, 2015 – South Carolina Secretary of State Mark Hammond has released the annual report on impact of the High Growth Small Business Job Creation Act passed in June 2013. The law created a 35% tax credit for “angel investors” who make investments in early stage, high-growth businesses in South Carolina.
According to the report, 76 businesses have qualified for angel investments, 50 of which registered in the past year alone. The qualified businesses have created 315 full-time, part-time and temporary jobs. The businesses have also raised $63.3 million in total capital and categorized $11 million as qualified angel investments.
The SC Council on Competitiveness supported the law – one of seven recommendations in the South Carolina Capital Market Study released by the Council in January 2013. The study found South Carolina’s high-impact firms are a major driver of job creation in the state, accounting for 66.8% of net employment gains between 2004 and 2008. However, the lack of access to capital was an obstacle to growth for these firms, effectively stalling job creation.
There are now five regional networks across South Carolina: Upstate Carolina Angel Network, Spartanburg Angels, Capital City Angels (Columbia), and Tiger Angel Network (devoted to helping Clemson University alumni). The Asheville Angels in North Carolina have also affiliated with the South Carolina network, recognizing the region’s economic ties with Upstate South Carolina.
A Palmetto Angel Fund has also been launched for individuals who want to help South Carolina startups, but don’t want to attend angel group meetings or get involved with investment decisions.
In order to receive angel investments, businesses must meet the following requirements:
- located and headquartered in the state of South Carolina
- no more than five years old before the qualified investment was made
- have fewer than 25 employees
- a gross income of $2 million or less in any complete fiscal year before registering.
Qualifying businesses must also be primarily engaged in one of the following activities:
- Software development
- Information technology services
- Research and development
- Ambulatory health care services
- Nursing and residential care facilities
To qualify as an angel investor, individuals must have a net worth of $1 million, not counting primary residences, or an annual income of $200,000 for at least three years.