Last year, the Greater Baltimore Committee worked with Delegate Brooke Lierman and Senator Catherine Pugh on a bill that would have created an Angel Investor Tax Credit. The credit would function similarly to the very popular Biotechnology Investment Tax Credit but would be available to a much wider range of industries and companies. Despite two very good hearings, they did not get a vote on the bill last year.
Delegate Lierman has reintroduced the bill this year (Senator Pugh will be reintroducing, as well). Although I was unable to attend the hearing in person, I sent a written testimony in support of the bill, which is reproduced below.
TESTIMONY PRESENTED TO THE
HOUSE WAYS AND MEANS COMMITTEE
HOUSE BILL 471 –
Angel Investor Tax Credit Program
FEBRUARY 16, 2016
My name is Jessica Gartner and I am the CEO and Founder of Allovue, an education finance technology startup based in Baltimore City. I moved to Baltimore in the summer of 2009 as a Teach for America Corps Member. I taught middle school humanities in Baltimore City and completed my Master’s degree at the Johns Hopkins School of Education. In 2011, inspired by the energy and potential of Baltimore, I bought a house in the Hollins Market neighborhood, thanks to homebuyer grants from the Live Baltimore program.
In February of 2013, I quit my job to start Allovue. I was haunted by the inefficiencies of school financial management, as I had observed first-hand the direct impact that resource allocation has on teaching and learning. I believed that innovation in education finance technology could drastically improve access to timely financial data and help education leaders make better resource allocation decisions by connecting spending to student achievement data.
By all accounts, this was a completely insane idea. I had no previous experience in business, technology, or finance, but I was intensely driven by a vision for an education system that allocated dollars effectively to meet the needs of our students. I believed that I could rally a team of brilliant software engineers, data scientists, education finance experts, and designers to build a product that met the uniquely complex needs of education leaders everywhere.
Three years ago, I was a 26-year-old girl with a bold idea, a few PowerPoint slides, and an incredible passion for improving educational outcomes. The Emerging Technology Center in Baltimore took a big bet on me. I was accepted to the Accelerate Baltimore cohort in 2013, which provided our first investment of $25,000 from the Abell Foundation.
During the next two years, I raised two rounds of seed capital for a total of $1.8 million. 42 percent of that seed capital came from Baltimore angel investors. I used this capital to hire our founding team and build a product that was ready to go to market in school districts across the country. In December , we raised an additional $5.1 million in Series A funding, led by Rethink Education, which will catapult our growth to a new level in 2016.
Today, I hired our 22nd employee, representing nearly 300% team growth over the past 90 days. Of those 22 people, we are in the process of relocating 7 of them to new homes in Baltimore City. We have just begun offering Live Baltimore matching grants up to $5000 to all employees who choose to buy homes in Baltimore. I sincerely hope they all take advantage of this.
Our sales are up 1000% since this time last year. In 2016, we are projecting 4000% growth over 2015 revenues. We are now working with school districts and state departments in 10 states across the country, helping education leaders manage and analyze over $3 billion in funding. And we’re just getting started.
None of this would have been possible without the early capital from angel investors. Angels make the riskiest investments in innovation – they bet on crazy, unproven ideas from inexperienced and unlikely founders, yet this is origin story of nearly every major technological breakthrough in America. Let’s make sure that more of them come from Maryland.
We should offer every incentive for betting on innovation and economic growth that starts and stays in Maryland. I hope you will vote to support the Angel Tax Credit, ensuring that all Maryland entrepreneurs with crazy ideas will have the best opportunities to access the capital necessary to build the next big thing.
For these reasons, I urge you to support House Bill 471.