‘‘SEC. 30E. ANGEL INVESTMENT TAX CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 25 percent of the 
qualified equity investments made by a qualified investor 
during the taxable year. 
‘‘(b) QUALIFIED EQUITY INVESTMENT.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified equity 
investment’ means any equity investment in a quali-
fied small business entity if— 
‘‘(A) such investment is acquired by the 
taxpayer at its original issue (directly or 
through an underwriter) solely in exchange for 
cash, and 
‘‘(B) such investment is designated for 
purposes of this section by the qualified small 
business entity. 
‘‘(2) EQUITY INVESTMENT.—The term ‘equity 
investment’ means— 
‘‘(A) any form of equity, including a gen-
eral or limited partnership interest, common 
stock, preferred stock (other than nonqualified 
preferred stock as defined in section 351(g)(2)), 
with or without voting rights, without regard to 
seniority position and whether or not convert-
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ible into common stock or any form of subordi-
nate or convertible debt, or both, with warrants 
or other means of equity conversion, and 
‘‘(B) any capital interest in an entity 
which is a partnership. 
‘‘(3) REDEMPTIONS.—A rule similar to the rule 
of section 1202(c)(3) shall apply for purposes of this 
subsection. 
‘‘(c) QUALIFIED SMALL BUSINESS ENTITY.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified small 
business entity’ means any domestic corporation or 
partnership if such corporation or partnership— 
‘‘(A) is a small business (as defined in sec-
tion 41(b)(3)(D)(iii)), 
‘‘(B) has its headquarters in the United 
States, 
‘‘(C) is engaged in a high technology trade 
or business related to— 
‘‘(i) advanced materials, nanotechnolo-
gy, or precision manufacturing, 
‘‘(ii) aerospace, aeronautics, or de-
fense, 
‘‘(iii) 
biotechnology 
or 
pharma-
ceuticals, 
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‘‘(iv) electronics, semiconductors, soft-
ware, or computer technology, 
‘‘(v) energy, environment, or clean 
technologies, 
‘‘(vi) forest products or agriculture, 
‘‘(vii) information technology, commu-
nication technology, digital media, or 
photonics, 
‘‘(viii) 
life 
sciences 
or 
medical 
sciences, 
‘‘(ix) marine technology or aqua-
culture, 
‘‘(x) transportation, or 
‘‘(xi) any other high technology trade 
or business as determined by the Sec-
retary, 
‘‘(D) has been in existence for less than 5 
years as of the date of the qualified equity in-
vestment, 
‘‘(E) employs less than 100 full-time equiv-
alent employees as of the date of such invest-
ment, 
‘‘(F) has more than 50 percent of the em-
ployees performing substantially all of their 
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services in the United States as of the date of 
such investment, and 
‘‘(G) has equity investments designated for 
purposes of this paragraph. 
‘‘(2) 
DESIGNATION
OF
EQUITY
INVEST-
MENTS.—For purposes of paragraph (1)(G), an eq-
uity investment shall not be treated as designated if 
such designation would result in the aggregate 
amount which may be taken into account under this 
section with respect to equity investments in such 
corporation or partnership exceeds— 
‘‘(A) $10,000,000, taking into account the 
total amount of all qualified equity investments 
made by all taxpayers for the taxable year and 
all preceding taxable years, 
‘‘(B) $2,000,000, taking into account the 
total amount of all qualified equity investments 
made by all taxpayers for such taxable year, 
and 
‘‘(C) $1,000,000, taking into account the 
total amount of all qualified equity investments 
made by the taxpayer for such taxable year. 
‘‘(d) QUALIFIED INVESTOR.—For purposes of this 
section— 
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‘‘(1) IN GENERAL.—The term ‘qualified inves-
tor’ means an accredited investor, as defined by the 
Securities and Exchange Commission, investor net-
work, or investor fund who review new or proposed 
businesses for potential investment. 
‘‘(2) INVESTOR NETWORK.—The term ‘investor 
network’ means a group of accredited investors orga-
nized for the sole purpose of making qualified equity 
investments. 
‘‘(3) INVESTOR FUND.— 
‘‘(A) IN
GENERAL.—The term ‘investor 
fund’ means a corporation that for the applica-
ble taxable year is treated as an S corporation 
or a general partnership, limited partnership, 
limited liability partnership, trust, or limited li-
ability company and which for the applicable 
taxable year is not taxed as a corporation. 
‘‘(B) ALLOCATION OF CREDIT.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the credit allowed 
under subsection (a) shall be allocated to 
the shareholders or partners of the investor 
fund in proportion to their ownership in-
terest or as specified in the fund’s organi-
zational documents, except that tax-exempt 
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investors shall be allowed to transfer their 
interest to investors within the fund in ex-
change for future financial consideration. 
‘‘(ii) SINGLE
MEMBER
LIMITED
LI-
ABILITY COMPANY.—If the investor fund is 
a single member limited liability company 
that is disregarded as an entity separate 
from its owner, the credit allowed under 
subsection (a) may be claimed by such lim-
ited liability company’s owner, if such 
owner is a person subject to the tax under 
this title. 
‘‘(4) EXCLUSION.—The term ‘qualified investor’ 
does not include— 
‘‘(A) a person controlling at least 50 per-
cent of the qualified small business entity, 
‘‘(B) an employee of such entity, or 
‘‘(C) any bank, bank and trust company, 
insurance company, trust company, national 
bank, savings association or building and loan 
association for activities that are a part of its 
normal course of business. 
‘‘(e) NATIONAL LIMITATION ON AMOUNT OF INVEST-
MENTS DESIGNATED.— 
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