Advocates want a startup-boosting Missouri angel investor tax credit (but they’ll have to beat legislature’s ticking clock)

With about a week left in Missouri’s legislative session, business advocates at NEXT Missouri are making a final push for lawmakers to pass a bill creating a state angel investor tax credit — legislation its backers say could catalyze early-stage business growth and keep entrepreneurial talent and essential startup capital rooted in the state.

Jason Wiens, founder of Rise Policy, a social impact-focused government relations firm working with  NEXT Missouri, said the initiative is a “top legislative priority in the current legislative session.” The credit, if passed, would provide financial incentives to private investors who back Missouri-based startups, with the goal of reducing investment risk and stimulating local innovation.

Jason Wiens, Rise Policy

“Passing an angel investor tax credit was a priority for NEXT Missouri last year too,” Wiens said. “Thankfully, the environment is a lot more conducive to getting legislation passed this year than it was in 2024.”

Bills to establish the tax credit — HB 235 and SB 461 — have already advanced through hearings and committee votes in both the House and Senate, Wiens said. With strong sponsors in each chamber, the organization is now seeking to “hitch a ride on legislation that’s moving.”

Under the proposed Missouri Angel Investment Incentive Act, eligible investors could receive a state income tax credit equal to 40 percent of their investment in qualifying businesses — or 50 percent if the business is located in a rural county. Investors could claim up to $300,000 in credits annually, and no more than $75,000 per business.

While there has been some legislative hesitation around creating new tax credits, Wiens emphasized that opposition has been limited and largely philosophical — not aimed specifically at the purpose of the angel investor bill.

“There are some legislators who just have concerns about creating new tax credits in general,” Wiens said. “But strong support otherwise. I testified at a Senate and House hearing this spring… lots of good questions, engagement and support voiced by legislators in the committee.”

According to Wiens, around “four out of every five new jobs” in Missouri originate from new businesses — highlighting the importance of a strong startup sector. Still, Missouri trails surrounding states in the availability of angel investment incentives.

“Five of the eight states that border Missouri have a tax credit like this, and about half of all states in the United States do,” Wiens said. “In most places outside of Silicon Valley, Boston or New York, the market just doesn’t work really well for these new companies.”

MTC under threat

Missouri lawmakers within the Budget Conference Committee adopted state Senate’s position to cut all funding for the Missouri Technology Corporation (MTC) in FY2026, according to NEXT Missouri.

MTC is a public-private partnership created by the Missouri General Assembly to promote entrepreneurship and foster the growth of new and emerging high-tech companies. It notably administers numerous seed and venture capital programs, as well as entrepreneurial support grants, across the state.

A stakeholder conversation to discuss reversing the funding decision is planned 1 p.m. Tuesday, June 10. Click here to register.

The proposed Missouri program would be administered by the Missouri Technology Corporation (MTC), which would certify eligible companies. MTC would not select winners, but instead verify that a business meets the legal criteria to receive investment that qualifies for the credit.

The bill proposes a $6 million cap on credits issued annually in 2026 and 2027, with a potential 20 percent annual increase thereafter if the credits are fully utilized. A sunset clause is built into the legislation for 2032, giving the Missouri General Assembly a chance to evaluate its long-term impact.

“The tax credit will help get more money off the sidelines invested into Missouri companies,” Wiens said. “Some of those businesses will do very well… and then those investors have additional dollars to put back into more Missouri-based companies.”

Wiens said one of the program’s strengths is its regional fairness. For the first six months of each year, tax credits would be divided equally among four geographic regions. Any unused credits would then become available statewide in the second half of the year.

The goal, Wiens explained, is to jump-start a “flywheel” effect: new capital from investors leads to stronger companies, which in turn return capital to those investors, encouraging reinvestment and participation from others.

“We want to just see that flywheel speed up a little bit and we think the tax credit is a way to do so,” Wiens said. “And it’s not something necessarily [that] has to exist forever.”

Bringing another border war to Kansas City

For Darcy Howe, founder and managing director of KCRise Fund, the argument for angel investor tax credits in Missouri is clear: They are essential to building and keeping high-growth companies in the state — especially in Kansas City.

Darcy Howe, KCRise Fund

“I have been a proponent of angel tax credits, a user of angel tax credits, and there’s a reason that it’s really important in the Kansas City region,” Howe said. “Particularly for those companies that want to be built on the Missouri side.”

Howe recalled her early experience as a founding member of Women’s Capital Connection, noting how Kansas’s angel tax credit program encouraged investors like her to write larger checks and, in some cases, persuaded startups to relocate across the state line to access capital in the Sunflower State. 

Click here to learn more about the Kansas Angel Tax Credits program.

“There were companies who were started on the Missouri side who moved over to Kansas because the angels were telling them, ‘If you move to Kansas, I will invest in you,’” she said.

Angel tax credits don’t just unlock funding, Howe added — they also help bring new investors off the sidelines. 

“It’s not just all about the money. It’s about getting folks involved so that they will help these young companies to continue to grow.”

She emphasized that Missouri Technology Corporation plays a critical role, but “they can’t do it alone.” Tax credits, she said, are “a small investment from the state of Missouri that can have very big results and create and keep jobs.”

Making Missouri startups stick

Ben Johnson, senior vice president of strategy and operations at BioSTL, believes Missouri is long overdue for a robust angel investor tax credit. 

Ben Johnson, BioSTL

From his vantage point — overseeing both local investment efforts and policy advocacy across the state — Johnson views the credit as a proven way to draw private capital off the sidelines and help young companies stay and scale in Missouri.

“The angel credit can be really critical,” he said. “For example, the BioGenerator — our investment arm — has invested just over $40 million in more than 100 companies. Those companies have gone on to raise more than $3 billion in additional capital… Ninety percent of that is from outside of Missouri.” 

Such outside capital, Johnson added, only comes after early local investors take the first risk.

“It’s those early investors that make the company sticky as they continue to attract capital across the globe,” he said.

Johnson emphasized that the real beneficiary of the credit is not the investor, but the entrepreneur — and by extension, Missouri’s economy.

“The economic job and wages return to the state,” he said. “That is the value that’s created.”

BioSTL, a nonprofit focused on growing St. Louis’ innovation economy, has long pushed for policy tools to support early-stage companies. Johnson noted that while cities like Boston, San Diego and San Francisco are seen as national innovation hubs, their ecosystems didn’t emerge overnight. 

“They didn’t just miraculously appear… it took decades, early wins and public-private partnerships,” he said.

For Missouri to replicate that trajectory, he argued, it must address persistent gaps in early-stage capital — especially compared to neighboring states like Kansas and Arkansas, which already offer angel tax credits. 

Johnson pointed out that in Kansas City, where the border between Missouri and Kansas runs through the heart of the metro, the absence of a Missouri tax credit makes it “really easy to take a Missouri-based company that’s not yet sticky and jump it across State Line Road.”

He also mentioned Springfield, Missouri, where companies could be lured south to Bentonville, Arkansas, for the same reasons. 

“We’ve got great ideas, great entrepreneurs,” he said. “But we need the toolkit… to make them stay and really experience the economic growth here.”

With the legislative session nearing its close, Johnson remained cautiously optimistic.

“I still feel very good about where the angel credit stands,” he said. “It’s a bill with broad support and real return.”

Haines Eason is the owner of startup content marketing agency Freelance Kansas. Previously he worked as a managing editor for a corporate content marketing team and as a communications professional at KU. His work has appeared in publications like The Guardian, Eater and KANSAS! Magazine among others. Learn about him and Freelance Kansas on LinkedIn.

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