The State of Wisconsin’s Qualified New Business Venture (QNBV) was launched in 2005 to incentivize investments in early-stage businesses in the state. These businesses must first register with the state, after which any entity investing in the QNBV-certified businesses are eligible to receive a tax credit equal to 25 percent of the amount of the equity investment.
2020 Outcomes
The QNBV program is run by the Wisconsin Economic Development Corporation, which recently released its annual report. In 2020, WEDC certified 42 new companies, bringing the active total to 242 in categories spanning food and beverage to aviation and aerospace.
Participating companies raised $540.4 million in total funding, of which $64.7 million qualified for tax credits. That’s an increase of nearly 11.0% over the $58.3 million raised in 2019.
On the investor side, the state issued $16.2 million in tax credits last year compared to the $14.6 million issued in 2019.
One of the points of the QNBV program was to spur job growth. In 2020, certified companies created 425 net new jobs in Wisconsin, with an average salary of $68,061. (The mean salary for the entire state is $45,240.)
Proposed Changes
Earlier this month, two bills began circulating the legislature. The first bill would allow a company to not meet the requirement of having at least 51% of its workforce based in Wisconsin as long as it maintained its headquarters in the state and met other requirements.
The second bill would allow out-of-state angel investors who invest in a QNBV-certified company to transfer their tax credit to an entity or individual with a Wisconsin tax liability.