While there are more "angel investors" â “ people who provide capital for startup companies â “ in the northern part of the state, a new tax credit and renewed effort to aid entrepreneurs locally could stimulate more investments of that kind in western Kentucky.
The commonwealth has made encouraging entrepreneurship a priority in recent years. West Kentucky Community & Technical College houses one of 13 offices statewide that make up the Kentucky Innovation Network, providing a range of services for people who want to start a business.
Gov. Steve Beshear last month signed legislation - strongly pushed by northern Kentucky business and community leaders - allowing tax credits for individual angel investors. Previously, only groups of angel investors could qualify. The expansion is designed to encourage more investment in Kentucky's small businesses. The expanded credit is expected to spark more innovation, business creation and jobs.
In addition, the governor last year launched the Kentucky Angels Network, designed to link entrepreneurs and investors statewide.
Jim Pape, vice president, workforce and economic development at WKCTC, said there are more angel investors in northern Kentucky because there are more people and businesses concentrated there.
"We have a couple of angel investors in the Murray area," Pape said. "We're trying to get that started in our area." When regular investors put money into something, they are generally looking for a more immediate return, Pape said.
"Angel investors take higher risks, recognizing there's not going to be an immediate payback," he said. "They carefully scrutinize their investments. They may invest in 10 different companies knowing that seven of them may never pay off, but that three of them may pay off in a huge way."
Kentucky Innovation Network offices were formerly known as Innovation and Commercialization Centers. Their focus is on the development of innovation-driven companies in Kentucky.
Paducah was originally a satellite location of the Murray office, according to Pape. A couple of years ago it became a stand-alone office, and a year ago was moved from EntrePaducah to the college.
According to Pape, the college is a natural choice for the KIN office because it has the resources to assist anyone wanting to start a business and works hand in hand with economic development officials, locally and regionally, to provide workforce training and other services.
EntrePaducah does a lot to help local entrepreneurs, Pape said, and the KIN office can also help entrepreneurs in other western Kentucky counties.
"We cover all of these (western Kentucky) counties. We do a lot of similar things and also partner with others on a lot of things," he said. "We're not in competition with anybody else. We work to get people the help they need."
According to Pape, the college's KIN office has hired a new director and assistant director and will renew its efforts to get the word out about services available to encourage entrepreneurs.
"Most of the growth of the economy is not from giant corporations, but from small business owners," Pape said. "The more we can help small businesses, the better chance we have of improving the local economy."
Contact David Zoeller, a Paducah Sun staff writer, at 270-575-8676.