Legal Alert

PA Gov. Wolf Signs Angel Investment Bill Providing $5 Million to Startups

by Robert J. Clark and Gregory L. Seltzer

July 7, 2021

Summary

Pennsylvania Gov. Tom Wolf signed a bill to create a $5 million Angel Investment Venture Capital Program to give grants to Pennsylvania startups.

The Upshot

Qualified businesses and angel investors (on behalf of qualified businesses) can apply to the program for a grant.
Eligible companies must have fewer than 100 employees, the majority of which are located in Pennsylvania.
The program will create a business environment in Pennsylvania that promotes and attracts early-stage financing for high growth startups.

The Bottom Line

Startup companies with the majority of their employees based in Pennsylvania can apply for grants from the new Angel Investment Venture Capital Program.

Included in the Commonwealth’s Fiscal Code (House Bill 1348) passed by the General Assembly and approved by Gov. Tom Wolf on June 30, 2021, is a new $5 million Angel Investment Venture Capital Program (the "Program").

The Program provides grants to companies in Pennsylvania with fewer than 100 employees. Eligible companies must also retain 51% of the workforce within the Commonwealth, and cannot have been in operation for more than five consecutive years at the time of application.

The company’s primary focus should be on the commercialization of research and development or the application of new technology. Companies deemed highly beneficial to the economic growth of Pennsylvania will also be considered.

Companies that have received more than $2 million in private equity investments or $1 million from a single investor are ineligible. Businesses engaged in real estate, insurance, or professional services provided by an accountant, lawyer, or physician also are ineligible. Businesses engaged in retail sales are ineligible unless the primary purpose of the business is to support and develop e-commerce.

A qualified business may submit an application directly to the Commonwealth for a grant. Angel investors may also submit an application for a grant related to a qualified investment in an eligible business venture. The Commonwealth will review each application to determine the suitability of the applicant. Applicants should expect approval notification within 30 days. The $5 million program runs through the 2021-2022 Pennsylvania fiscal year, ending June 30, 2022.

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