Omaha Company Benefits from LB389
Omaha, NE., Jan. 24, 2011 – When Omaha startup Doccenter was ready to take their enterprise cloud-based content management solution to a wider market , Nebraska’s Angel Investment Tax Credit Program proved vital. Using the catalyst that LB 389 provided, Doccenter was able to get the infusion of capital it needed to develop and market new product features.
DocLanding, brought in new CEO Timothy Campbell, a Silicon Valley veteran. When the Nebraska Unicameral approved the angel investment credit in May, Campbell knew he had a powerful tool to help motivate investors.
“LB 389 played a couple of important roles,” Campbell said. First, it provided incentive, and then it also created a timing mechanism for investing.”
The Angel Investment Tax Credit Act went into effect Sept. 1 and offers tax credits to those who invest in qualifying Nebraska small businesses. Investors receive 35 to 40 percent refundable state income tax credits when they invest at least $25,000 in qualifying Nebraska startups.
Angel investment groups made up of three or more individuals must invest at least $50,000 to qualify for the incentives. Investments made in businesses in distressed areas are eligible for the higher refund rate.
A 2010 economic study showed that Nebraska lagged behind other states in providing help for entrepreneurs and innovators who were trying to start or build businesses. A group of four legislative bills known as the Talent and Innovation Initiative sought to create a new level of investment in and support for Nebraska startups. In addition to the Angel Investment Tax Credit, the four-part initiative included:
- LB 386, The Nebraska Internship Program, which provides $1.5 million in funds to companies creating new internship opportunities. The bill reimburses 40 to 60 percent of wages paid to interns at qualifying companies.
- LB 387, the Business Innovation Act, offers competitive grants to help businesses develop new technologies and enhance quality job opportunities in Nebraska.
- LB 388, the Site and Building Development Fund, is designed to increase the number of industrial and commercial sites ready for business development through matching funds from communities.
Using the new tax credit incentives, Doccenter’s Campbell formed a private group of angel investors. The group is comprised of a wide range of high-net-worth individuals from a variety of industries, including agriculture and telecommunications. Some of the investors had supported the company in past.
“They liked what we were doing and chose to improve their position in the company,” he said.
LB 389 was key in helping individuals move ahead with investment decisions, Campbell said. “These are busy individuals, so it help to have a timing mechanism in play.”
Investors had timelines to apply and then 90 days to make investments which allowed Campbell to quickly raise $400,000 in additional capital. The investment has allowed DocLanding to aggressively develop and market new features for their DocLanding cloud-based digital content management system. Since July, the company has released new DocLanding Mobile for iPhone and DocLanding Sync which allows users to save changes to digital files from any computer.