Qualified New Business Venture

Early-stage businesses engaged in developing innovative products or services related to proprietary technology may be designated as Qualified New Business Ventures.  This designation is designed to assist businesses in their efforts to attract investors by making state tax credits available to individuals and groups investing in these businesses.

Does Your Business Qualify?
To be certified as a Qualified New Business Venture by the Department of Commerce, businesses must be able to answer "Yes" to the following six questions: Are you seeking private equity funding for pre-commercialization activities related to the development of a proprietary new product or process in Wisconsin? Have you been in business for no more than 10 consecutive years? Are your principal administrative offices located in Wisconsin?                        and Does at least 80% of your payroll go to people employed in Wisconsin? Do you have less than 100 full-time equivalent (FTE) employees? (FTE=Total number of hours worked per year multiplied by total number of employees divided by 2,080 hours) Do at least 51% of your employees work in Wisconsin? Since its inception, has your business received, in aggregate, no more than $10 million of private equity investment in cash?
Department of Commerce Evaluation Criteria
Commerce will also consider the following factors when determining if an early-stage business should be certified as a Qualified New Business Venture: Is the business one of Wisconsin's targeted high-technology industries (biotechnology, health technology, information technology or nanotechnology)? Does the business have high-growth potential, long-term sustainability and sufficient barriers to entry? What is the experience level of the management team? What is the financial need of the business? What percentage of funding being sought by applicants will be spent on activities in Wisconsin?
Application Materials
Applications may be obtained by contacting Aaron.Hagar@Wisconsin.gov.

A business may be designated as a Qualified New Business Venture if it meets the following criteria:

• It has the potential for increasing jobs in this state, or increasing capital investment in this state, or both, and either of the following apply:

1. It is engaged in, or has committed to engage in, innovation in this state in either of the following:

a)  Manufacturing, biotechnology, nanotechnology, communications, agriculture, or clean energy creation or storage technology.

b)  Processing or assembling products, including medical devices, pharmaceuticals, computer software, computer hardware, semiconductors, any other innovative-technology products, or other products that are produced using manufacturing methods which are enabled by applying proprietary technology.

   2.  Manufacturing, agriculture or processing
        or assembly products and conducting
        research and development.

• Businesses engaged in real estate development, insurance, banking, lending, lobbying, political consultation, professional services provided by attorneys, accountants, business consultants, physicians or health care consultants, wholesale or retail trade, leisure, hospitality, transportation or construction are not eligible for the program.

Qualified New Business Ventures will be certified by Commerce on an annual basis.  Businesses wishing to continue their certification in the program must submit verification information annually.

Businesses can receive up to $8 million in tax credit-eligible cash equity investment.

Benefits to Investors

• Qualifying angel investors and angel investor networks that invest in Qualified New Business Ventures may be eligible to claim an income tax credit on that investmentof up to 25% of the investment amount.

• Summary of Governor's Budget Adjustment Bill (2009 Wis. Act 2) Act 255 QNBV/Investor Tax Credit Changes
• Summary of 2007-2009 Biennial Budget Bill (2007 Wis. Act 20) Act 255 QNBV/Investor Tax Credit Changes
• Summary of Administrative Rules Amendment

• Qualifying venture capital funds that invest in Qualified New Business Ventures may be eligible to claim up to a 25% income tax credit on that investment.

Subsequent Reporting

For a list of businesses certified as Qualified New Business Ventures, click here.

For Frequently Asked Questions, click here.  

For more information about Qualified New Business Ventures, and prior to submitting an application, please contact:

The State of Wisconsin does not endorse the quality of management or the potential for earnings of the certified Qualified New Business Venture.  Furthermore, the Qualified New Business Venture's use of the phrase "certified" and/or "qualified new business venture" is not a recommendation or endorsement of the investment or the company by the Wisconsin Department of Commerce.

Certification of a fund by the Department of Commerce is not an endorsement of the quality of management of that fund.  The Department of Commerce is not liable for damages or losses to an investor.