One of the more frequent topics in these weekly outreaches is venture capital. That only seems appropriate due to its vital role in growing entrepreneurship in our state.

This week, the Indiana Chamber released a two-page impact analysis of the Indiana Venture Capital Study. Commissioned in 2000 by the Indiana Chamber Foundation, that report first documented our state falling behind in a key factor: attracting capital investment.

Indiana Venture Capital Study: Then and Now notes from the original 2000 analysis:

“Many states are moving quickly in an effort to keep up with the pace of the new economy. They are introducing new programs and experimenting with initiatives in an effort to increase the share of successful high growth firms in their local economies. It is important that Indiana follows suit, or we risk being left behind.”

Last week’s update, the first in a periodic series reviewing the benefits of prior Chamber Foundation work, explains how the 2000 overview led to the resulting enactment of the state’s first venture capital investment (VCI) tax credit in 2002. It documents Indiana’s improved venture capital ranking in the late 2000s and the subsequent dip as competitor states enacted increased and more flexible incentives for investors.

It also highlights what the Indiana Chamber believes is the next needed move for the state – raising the state cap on VCI awards and increasing the percentage of the tax credit awarded to the investor; these are currently $12.5 million and 20%, respectively.

The incentives for nearby states range from 25% to 50%, plus most are either refundable and/or transferable. The effective date for Indiana’s VCI credits becoming transferable is July 2020. In anticipation of increased investment activity, the General Assembly should consider increasing the $12.5 million cap so we can attract the funding to accommodate a thriving entrepreneurial culture throughout the state.

Indiana Venture Capital Study: Then and Now, along with selected previous studies, is available at www.indianachamber.com/studies.