Guest Column: Opportunity Knocking by Deborah Burns, CEO, investUS LLC

Opportunity Knocking in New Mexico:
A Guest Column by Deborah Burns, CEO investUS LLC

In this guest column, Deborah Burns, CEO, investUS LLC talks about the investment value to be found in locating businesses within Opportunity Zones! She explains why startup CEO’s should be thinking of locating operations in an Opportunity Zone, and using a fund to help their investors avoid capital gains taxes.


One of the best kept secrets of the December 2017 tax legislation is the “Investing for Opportunity Act”.  It’s a timely program offering capital gains tax deferment and reduction to any US taxpayer that invests their capital gain into an Qualified Opportunity Fund (“ QO Fund”) that in turn invests in Opportunity Zone investments.  New Mexico Economic Development Department did a great job nominating 63 eligible New Mexico zones that have now been approved as Opportunity Zones ( interactive map).

The US Treasury department estimates there is over $7 trillion in unrealized capital gains that could be invested into Opportunity Zones given the tax deferment and reduction incentives.    The best feature for Opportunity Zone investment recipients is that the QO Fund investment in their company is also capital gains tax free if it remains invested for at least 10 years.  QO Funds will be a new conduit of investment capital flowing into Opportunity Zone investments driven by the desire to stay invested for at least 10 years to be capital gains tax free upon the exit.

To take advantage of these tax savings, the US tax payer must invest in a QO Fund within 180 days of realizing the taxable gain. It can be a taxable capital gain of any asset by any US taxpayer.  The QO Fund can invest in any qualified business or asset in a US Opportunity Zone excluding “sin” businesses consisting of golf courses, country clubs, massage parlors, hot tub facilities, race tracks or gambling facilities, and liquor stores as defined in the tax legislation.

One would wonder why you haven’t heard of this tax incentive or any promotions for QO Funds.  The lack of press coverage for the legislation hasn’t been helpful. To be sure, putting together a Qualified Investment Fund has its challenges. First, the IRS has yet to write the tax rules for the legislation and there is no indication when it might be forthcoming. To put together a QO Fund today requires hiring a sophisticated tax advisory firm that has a dedicated team focused on the new legislation and experienced tax counsel.  Second, as with any private equity fund, the fund manager must comply with federal and state securities laws, provide fund administration and reporting, financials statements and tax filings for investors. This is harder than it seems since the IRS has not yet created the reporting requirements nor the tax forms. Then there are the various liabilities of any securities offering and investment transaction.  All in all, QO Fund management is a challenging undertaking.

Today, investUS, as fund manager, is actively reviewing investment opportunities in New Mexico Opportunity Zones that are shovel ready now or will be ready for investment in early 2019.

For more details on the tax legislation, tax savings computations and recent IRS FAQ’s, contact your tax advisor or tax attorney.  For more information on the investUS QO Fund, contact Deborah Burns at dburns@investUS-eb5.com.

 

Announcing Nine Competitors for Balloon Pitch 2018 on October 5!

We’re excited to announce the nine companies competing in the ABQid Balloon Pitch 2018, ranging from sophisticated artificial intelligence to camping without hassle, and wifi in space.

The winner of the pitch competition goes home with $10,000, but each startup will have a chance to pitch to seven investors who collectively represent portfolios worth $2 Billion. Tickets to the event on Friday, Oct. 5, at Vara Wines are $25.

In its first year and following the success of Ski Lift Pitch, Balloon Pitch will be held at Vara Wines on Oct. 5. Companies will have five minutes to pitch to the judges, and the winner will go home with $10,000 and fly with hundreds of other balloons in a special ride during an Albuquerque International Balloon Fiesta Mass Ascension.

The nine competitors are working in a variety of sectors:

  1. DeployHub: DeployHub gets innovation to the software end user faster, without compromising safety. It delivers critical improvements over traditional, monolithic releases by creating an iterative path to end users through its unique Deployment Version Control.
  2. Ibex Aegis: Modernizing right-of-way surveillance with artificial intelligence for the oil and gas industry.
  3. KitFox: Imagine your dream camping site, when you want it, how you want it.
  4. MagPI Innovations: MagPi Innovations researches, develops, and commercializes inventions.
  5. Minnotank: Minnotank takes startups and connects them to investors with one easy-to-use platform.
  6. OneForNeptune: OneForNeptune delivers healthy, high-protein snack foods made from premium quality sustainable seafood. Their wild-caught whitefish jerkies are ethically sourced from small-scale US West Coast fisheries.
  7. Smartloop: Smartloop is an AI company that is using new techniques to build on the chat bot experience for companies who want to connect better with their customers.
  8. Solstar Space: Solstar develops proprietary technologies and payload and space communicator products, providing commercial internet/communications services to astronauts and machines in space. Their services also enable earth-based customers 24/7 direct access to experiments, cubesats, machines, and colleagues located in space.
  9. Zhennovate: Zhennovate is a digital platform to scale personalized resilience development.

More information about investors, sponsors, and purchasing tickets can be found on our Balloon Pitch page.

Congratulations to Honeymoon Brewery!

Honeymoon Brewery, an SFid cohort company, is a top finalist in the Miller Lite Tap the Future competition!  Tap the Future is a pitch competition focused on companies revolutionizing the brewing industry.  Honeymoon Brewery was a semi-finalist on July 19th at the Hobby Center in Houston and won the grand prize of $20,000.  Guest judge Damon John of Shark Tank was there to award Honeymoon for their outstanding innovation.  All of us at ABQid/SFid are so proud and excited for Honeymoon Brewery and their accomplishments!  The company will now head to Chicago in September for a chance to win $200,000 in the finals.  Good luck!

TaptheFuture1c-960x640

Click below to learn more about Honeymoon Brewery and Tap the Future.

www.honeymoonbrewery.com

www.mltapthefuture.com

Wednesday Speaker Series, John Chavez, New Mexico Angels on July 29th

JC-NMED-PhotoThe ABQid Wednesday Speaker Series brings experts who are leaders in their fields of business, entrepreneurship and innovation to share their knowledge and skills to the entrepreneurial community. These events are free and open to the public though priority registration is given to the ABQid accelerator teams. Space is limited so register today!

Please join us to hear from John Chavez, President of New Mexico Angels. John has been President of New Mexico Angels since 2008 and has been an angel investor since 2003. Mr. Chavez is also the Managing Director of Phase One Ventures, a start-up fund out of Santa Fe, NM.

Outside of the Angels, John is the President of Tafoya and Brainerd Partners LLC, a nationwide business development consulting firm. Prior to his work in consulting, Mr. Chavez was appointed Cabinet Secretary of the Taxation and Revenue Department by by New Mexico Governor Gary Johnson. During his six year tenure as Tax Secretary he also served as the President of the Federation of Taxation Administrators for one year. John is a Member of the Board of Directors of the University of New Mexico Anderson School Foundation.

John is an expert in angel investment and a serial entrepreneur with extensive experience working with startups and choosing the right teams for investment. We hope you can join us on Wednesday, July 29th at 2:00pm.

Click here to register.

Scrappy Startups V2V Judges Announced

###
Albuquerque, NM

ABQid and the New Mexico Technology Council announce judges for Scrappy Startups V2V Edition.

“We’re supremely proud to announce an amazing line-up of judges for the upcoming Scrappy Startup V2V edition, national in scope and caliber” effused Webb Johnson, Managing Director of ABQid. The judges announced include Manolo Espinosa, VP of Soundcloud the world’s leading audio platform, Joanne Lang of AboutOne.com, the world’s only household management platform, Lori Upham, Chairman and COO of CureDM, a biopharmaceutical company established to develop new therapies that may prevent, ameliorate or reverse diabetes and allow for the discontinuation of insulin, and John McDermott, former CIO of Xerox and serial startup entrepreneur. Both organizations expressed their excitement on having these judges participate in the event scheduled on May 4th. They launched a domain to recruit applicants and attendees at www.GetScrappy.org, with prize announcements pending.

Manolo Espinosa – San Francisco
Manolo Espinosa is the Vice President of Platform at SoundCloud, the world’s leading audio platform. In this capacity, Manolo is responsible for SoundCloud’s API toolset, global developer evangelism, and integration with platforms such as Facebook, Tumblr, Twitter, Google and Apple. Prior to SoundCloud, Manolo was co-founder of IndexTank, a real-time, hosted search engine acquired by LinkedIn. Manolo holds degrees from Amherst College and Harvard University.

Joanne Lang – Philadelphia
Joanne Lang is the founder of AboutOne.com, the world’s only household management platform, and the smart, secure solution for managing family in the cloud. AboutOne’s suite of apps makes it easy to manage the family calendar, along with memories and household paperwork – at home or on-the-go. A former SAP cloud technology specialist, Joanne is the mom of four boys and one of Forbes Top 10 Female Entrepreneurs to Watch. She writes and speaks regularly on leveraging technology to simplify life and prepare for the future, and has raised over $5M in seed and series A funding since launching at VentureBeat DEMO. She is one of the 3% of women in tech who have raised capital in the US and was featured in Microsoft’s documentary, CTRL+ALT+COMPETE.

Loraine V. Upham – Albuquerque, NM
Loraine V. Upham, Lori serves as Chairman of the Board and Chief Operating Officer at CureDM, Inc. Ms. Upham served as Chief Executive and President of CureDM, Inc. She has 26 years of experience in the biotechnology and pharmaceutical industries. A diverse and highly regarded career including the Molecular Genetics Research Department at Eli Lilly and Company, Merck and Co., Product Manager and Project Team Leader at Packard BioScience, Lori’s expansive work on diabetes led to the founding of CureDM. Playing key roles in both process development engineering and business development at Prolexys Pharmaceuticals (a spin-off of Myriad Genetics) provided critical exposure in the field of human proteomic biology that ultimately formed the basis for the CureDM discovery platform and the identification of the Human proIslet Peptide. As the Founding Chief Executive Officer of CureDM, she successfully obtained start up financing and engineered partnerships to conduct basic research and establish the preclinical proof of concept for HIP, which allowed progression into preclinical development. She has been a key and integral part in every facet of CureDM’s business, science and technology. Ms. Upham holds a BA in Biology from the University of Pennsylvania and an MBA from Arizona State University.

John McDermott – Santa Fe, NM
John serves as an advisor and investor in information technology start-ups and growth phase companies. He started several small, but highly successful companies before he obtained his MBA from Yale University.
John’s ten year career at Xerox culminated as CIO, where he contributed extensively to business simplification and system rationalization initiatives, during a period of dramatic turn-around at the company. Prior to Xerox he was a partner at Marakon Associates, a management consulting firm where he provided business strategy, operations improvement and organizational design, primarily in the technology and telecommunications industries. He was deeply involved in the business turnaround at IBM, an experience that has informed and guided much of his subsequent career. John serves the State of New Mexico as Chairman of the New Mexico Finance Authority and serves as a Board Member of ABQid, New Mexico’s leading start-up accelerator and seed investment firm.

###