No, Phillip, I believe that it is you that still do not understand. In order to have tax liabilities, you have to have profits, a VC will not invest in a management that has no history whatsoever of bringing profits to the bottom line, thus tax incentives availability (for state taxes, which are much smaller than federal or national taxes in other countries offering tax incentives and keeping the company free of all income taxes for some 7 years) is of very minute significance.
History of management and proven track record of bringing profits to the bottom line will be more than 50% of the investment decision of a VC, 40% would be the potential market, the technology and particularly, barriers to competitive entry. The last 10% would be location, and depending on the type of business contemplated that might include any or all of the following, taxes, availability of "labor", availability of transportation and infrastructure, proximity to end markets, and prevailing regulatory conditions (the latter, in some cases may even have a weight of 25%).
In the case before us, and I presume you brought the tax issue relative to the speculation that TSIG might have access to VC money, they fail miserably on the first hurdle, and they also fail on the "barriers to entry", since after all, according to our experts on this thread, it will require no more cash than the about $1 MM already spent on LL to start a competing "card" business for charitable purposes. That is indeed a very low barrier to competitive entry.
Zeev |
