An Act to amend 71.07 (5d) (a) 1. (intro.); to create 71.07 (5b) (a) 3., 71.28 (5b) (a) 3. and 71.47 (5b) (a) 3. of the statutes; Relating to: qualifying investments for purposes of claiming the early stage seed investment and angel investment credits. (FE)
Impact
If passed, AB566 would impact the statutes that govern the Wisconsin Economic Development Corporation (WEDC) regarding tax credits for angel investments and seed funding. The new definitions would allow investors more flexibility in how they can support new business ventures, potentially increasing the pool of capital available to startups in Wisconsin. This move is intended to stimulate economic development and innovation within the state, fostering a more robust startup ecosystem.
Summary
Assembly Bill 566, introduced in the 2025-2026 legislative session, seeks to amend provisions related to investments eligible for claiming early stage seed and angel investment tax credits. The bill aims to expand the definition of qualifying investments to include convertible instruments such as convertible notes and simple agreements for future equity, thereby accommodating modern forms of funding that are growing in popularity among startups and investors.
Contention
There may be varying opinions about this bill. Proponents argue that the introduction of convertible instruments into the investment definition is crucial for adapting to the evolving funding landscape. They believe that by broadening the definition, the state can better attract investors and encourage entrepreneurship. However, opponents could raise concerns over the sufficiency of oversight regarding these new investment formats and the potential for abuse of tax credits if sufficient safeguards are not established.