Angel Investor Tax Credit

Program Overview

The Angel Investor Tax Credit program is offered to investors interested in funding early-stage companies engaged in life sciences research and development, commercialization and manufacturing in Massachusetts. The program provides a taxpayer investor a credit of 20% of the qualifying investment, or 30% if the business is located in a gateway municipality, in a business that has no more than $500,000 in gross revenues in the year prior to eligibility.

Credits are available up to $50,000 in any one taxable year for qualifying investments of up to $125,000 per qualifying business per year and up to $250,000 in cumulative qualifying investments for each qualifying business.

Eligibility & Evaluation

  • Taxpayer Investors must be “accredited” as defined by the U.S. Securities and Exchange Commission and may not be a principal owner of the business or involved in a full-time professional capacity.
  • Qualifying business must be registered to do business in Massachusetts, have 20 or fewer full-time employees at the time of the investment, and have $500,000 or less in gross revenues in the year prior to eligibility.
  • A qualifying investment is a monetary investment that is at risk and is not secured or guaranteed.

Interested applicants will be required to submit an online application. This is a two-step application process that includes information from the taxpayer investor and the qualifying business to meet the requirements for the Massachusetts Life Sciences Center to make an award. Please see sections 4-6 of the solicitation for more information regarding the application process and further details on the eligibility requirements.

Taxpayer investors that receive a tax credit award and the qualifying business in which they have invested are required to provide Annual Reports to monitor compliance.

Deadline

Deadline of January 5, 2023 at noon EST for submission of applications for qualifying investments made during the period January 1, 2022 to December 31, 2022.

Applications are accepted on a rolling basis and would be considered complete once both the investor and the company has each completed their portion of the application. If there are multiple investors in the same company, the company only has to submit one application for the current round of the program.

Resources

Attend an info session to learn more:
In-person – September 15, 2022 at 4 p.m. – Register now

Solicitation

Investor Sample Application

Company Sample Application

View the regulations for the 830 CMR 62.6.5: Angel Investor Tax Credit

Impact on the Ecosystem

To ensure the Massachusetts’ ecosystem remains favorable for investors, we are proud to offer this new Angel Investor Tax Credit to encourage investment throughout the Commonwealth and in our gateway municipalities. We are confident that such investments will create jobs, build a robust workforce, support women and minority-led companies, and propel the development of new therapies, devices, and scientific advancements that are improving patient health and well-being.

Connect with us to Learn More

If you have any questions regarding the application process, e-mail: AngelTax@masslifesciences.com.

Seed Fund

Program Overview

This program is not currently accepting applications.

The Seed Fund’s mission is to advance innovative and promising life science companies in targeted geographies throughout the Commonwealth by working with partners to leverage resources and promote economic development.

Individual investments of up to $250,000 in a convertible note will be awarded to life sciences start-ups, and up to $1 million of capital investment is available.

Eligibility & Evaluation

The Seed Fund is targeting life sciences companies broadly, which includes therapeutics, medical devices, diagnostics, and bioinformatics/digital health technologies.

Pre-seed to early-stage companies who have not yet raised their first priced round are encouraged to apply for this program.

To be eligible to apply, companies must be located in or intend to locate (with a significant presence or sound hiring/growth strategy) in one of the Seed Fund geographies: Amherst, Beverly, Lowell, Mansfield, North Adams, Springfield, Pittsfield, and Worcester.

At the time of investment, companies must:

  • Be physically located (with a year-long lease) in one of the Seed Fund geographies
  • Produce Certificates of Good Standing from the Department of Revenue and Secretary of State’s Office
  • Employ at least one full-time Massachusetts employee
    • Majority of employees must be employed in MA
    • Detailed offer letter for new FTE or a recent pay-stub indicating full time pay for a MA employee must be produce

Applications are accepted and reviewed on a rolling basis, and the evaluation will consist of a two phase process. In Phase I, submitted applications will be screened, and applicants will be notified within a month whether they will advance to pitch to the group or have an opportunity to schedule a feedback call.  If advanced beyond the pitch, companies will enter Phase II, which consists of deep due diligence over the next few months. All recommendations for investment are subject to approval from the MLSC’s Board of Directors.

Please Note: As part of the convertible note, the MLSC will include a Side Letter, which addresses supplemental language that may be absent from the Note Purchase Agreement. Common conditions include the following:

  • Information rights
  • Board Observer Role
  • Participation rights (a right but not an obligation to purchase its Pro Rata Share of any Equity Securities)
  • Representations (Bad Actor clause, Reps and Warrants, and MFN clause)
  • Put Right to maintain a physical presence in a Seed Fund geography
    • Majority of employees employed in incentivized geography
    • Clawback provision if failure to meet the Put Right

Resources

Informational Overview

Impact on the Ecosystem

The MLSC is pleased to launch its first-ever Seed Fund, which leverages a federal award from the Department of Commerce’s Regional Innovative Strategies Program.

The Seed Fund aims to provide up to $250,000 in convertible notes to early-stage life sciences companies who are located in particular locations to increase visibility of opportunities, highlight the regions resources, and promote economic development overall across the Commonwealth.

Connect with us to Learn More

If you have any questions regarding the application process, e-mail: seedfund@masslifesciences.com.

Milestone Achievement Program

Program Overview

The Milestone Achievement Program (MAP) was designed to address the needs of early-stage life sciences companies by providing grant funding to execute critical, value-creating technical milestones. This program aims to fill a gap within the existing funding environment to enable early-stage companies to attract additional follow on funding.

Impact on the Ecosystem

The MLSC recognizes that many innovative companies are a milestone away from reaching an inflection point to further the success of the technology and advance the company overall. 

In 2019, the agency awarded  more than $1.9 million in funding to 10 life sciences companies, located across six Massachusetts communities. 

Early-stage programming like MAP bridges the funding gaps associated with long life sciences R&D cycles. The Commonwealth’s support for early-stage activity helps ensure a diversity of entrepreneurs within the life sciences industry, while enabling new partnerships and collaborations, acquisitions, and continued talent recruitment.

Learn more about our 2019 Milestone Achievement Program awardees.

Connect with us to Learn More

If you have any questions regarding the application process, email: map@masslifesciences.com