Important news for Maryland startups and investors! This week, the Maryland Department of Commerce is launching the 2025 Innovation Investment Tax Credit (IITC) Program. IITC aims to enhance the abilities of Maryland startups to attract private capital by providing refundable income tax credits to investors, making another reason why Maryland is a great state for innovation to call home!
Last week, Squadra Managing Partner Guy Filippelli participated in a conversation with Cybersecurity Association of Maryland, Inc. (CAMI) to share some insights from the investor perspective on the value of this program.
💵 IITC is an incredible opportunity to both investors and companies. Investors have the opportunity to make back up to 33% of their investment in an eligible company, up to $250,000, or 50%, up to $500,000, if the company is located in Allegany, Dorchester, Garrett or Somerset County. For example, if an investor put in $750,000 and then got back full IITC credits, only $500,000 leaves the bank but their returns are based on their $750,000 initial investment. If the company sells and the investors ends up getting $1.5 million back on their initial investment, the investor just went from doubling their return to tripling their return.
🇺🇸 Maryland has one of the highest bases of military and intelligence community connected talent, making our talent an unparalleled resource for defense tech startups. As new capabilities are demanded, Maryland has unique advantages to help startups fulfill different needs. Many world class institutions sit in Maryland, including the NSA, the University of Maryland-College Park, Johns Hopkins University and the Applied Physics Lab, Fort Meade, Aberdeen Proving Grounds, and several Navy facilities. The intellectual capital of the DC Metro Area is also well within arms reach. There are boundless opportunities within the Maryland borders, and IITC aims to be part of the catalyst in the defense tech boom in Maryland.
👏 IITC aims to be the push to help an investor choose an exciting Maryland startup over something else. While IITC provides enticing opportunities, it will never be the sole reason for an investment. Good investors—the kind that will dedicate energy and back you up—will not invest because they have a shot at returning 33% of the money they plan to invest immediately. They will invest because they believe you are the best option, most poised to generate returns and with the most potential value to society. Looking for investors that your company fits well with is the most important thing.
For the fiscal year 2025 IITC program, Commerce will begin accepting Form B QMTC applications today 8/20/2024 and Form A investor applications on 9/3/2024. Registration for the online investor queue will begin on 9/25/2024.
Have questions? The Commerce team is standing by and happy to help! More information as well as Guy’s presentation can be found on the Maryland Department of Commerce website.
