Washington, DC Named One of the Best Places for Tech Startups

Based on a report by the National Venture Capital Association, Network World has compiled its list of best places for tech startups and the DC area has come in at number 6.  The NVCA list measures overall venture capital investment in each respective market to compile its data.

D.C. and the surrounding metro area are home to the federal government and this drives a lot of the trends in this busy market. The VC market is heavily connected to the government, specifically the department of homeland security and defense industry, according to the NVCA.  (Source)

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Contact the Aronson LLC Technology Industry Services Group at 301.231.6200 to learn more about specialized accounting and consulting services for tech startups in the DC Metro region.

Investors: Capital Gain Exclusion on Small Business Stock acquired in 2011!

The Federal government is providing an exclusion on the gain of Qualified Small Business Stock meeting certain requirements.  While this is not specifically geared at the technology industry, many technology companies would meet the requirements to be a “Qualified Small Business”.  The investment date has recently been extended through the end of 2011 providing an excellent incentive for investors to jump on board and for companies to identify themselves as Qualified Small Businesses and promote it to potential investors.

The article below was originally published by Patrick Smith, CPA, Seattle, WA, Francois Hechinger, CPA, San Francisco, CA, and John M. Nuckolls, J.D., San Francisco, CA.  Published May 01, 2011 in The Tax Advisor, an AICPA publication.

http://www.aicpa.org/Publications/TaxAdviser/2011/May/Pages/clinic-may2011-story-04.aspx?action=print

For those technology companies that don’t qualify as a “Qualified Small Business” for the Federal exclusion, Virginia is offering capital gain exemption for technology businesses.  While this means that the investor may have to pay Federal capital gains tax on any gains from their investment in the technology company, they would be able to exclude the gain from their Virgina tax return.  The memo below, as posted on the Virginia government website, describes the details for the qualification and exemption process.

http://www.technology.virginia.gov/CapitalGains/

Maryland has also lined up some tax policy changes to encourage investors to invest in technology in their state including extending their research and development tax credit (http://business.marylandtaxes.com/taxinfo/taxcredit/randd/default.asp) and increasing funding for the biotech tax credit (which is discussed in more detail in a separate blog post).

SUPREME COURT HEARS KEY TECHNOLOGY PATENT CASE

On November 9, the Supreme Court heard oral arguments in the Bilski case that could have far reaching implications for technology patents.  Computers and technology have made it increasingly difficult to apply U.S. patent law to technology advancements that could be considered non-patentable “ideas”.  Bernard Bilski and Rand Warsaw are seeking to patent a method for hedging risk for energy purchases.  Some skeptical justices asked whether methods for teaching a law school class could be patented.  This case has drawn tremendous interest in the high-tech and life sciences fields where major advancements don’t always clearly involve machines.  Read more at-Patent case article