A new IBM supercomputer opened at Brown University’s Center for Computation and Visualization in Providence, RI, today is 50 times faster than Brown’s next best machine and is the most powerful computer in Rhode Island, according to an announcement from IBM (NYSE: IBM). Researchers at Brown and other institutions intend to use the 1,440-processor machine to model subjects such as the genomes of ocean-going microbes, the mechanics of human and animal movement, and the topography of other planets. Brown ordered the multimillion-dollar supercomputer in June; its exact cost hasn’t been disclosed, but IBM and Brown are calling it “a shared investment.”

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The Naval Undersea Warfare Center in Newport, RI, has awarded a contract worth up to $19 million to San Diego-based Science Applications International Corporation (SAIC) (NYSE: SAIC). Under the contract, which SAIC announced today, the company will perform training, modeling, simulation, and other support services for robot submarine research programs at the Navy’s Autonomous Undersea Vehicle Engineering Facility.

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Ji Kim was able to raise $100,000 in seed financing for his ad software startup Dijipop this summer through connections he gained in a new program called Betaspring, which was launched this year to support young entrepreneurs in Providence, RI, in their quest to form technology- and design-oriented startups.

Dijipop was one of the seven startup teams that presented its business plans at Betaspring Investor Demo Day yesterday at the RI Center for Innovation and Entrepreneurship in Providence’s Jewelry District. It was their big day to shine in front of angel investors, venture guys and gals, and other business types. Many of the team members wore suits, and some even wore ties. (My gosh, I don’t usually see ties at techie events unless something big is at stake, and even then…) Indeed, these groups represented the future businesses that could lift Rhode Island’s ailing economy and deliver jobs in high-growth sectors.

Owen Johnson, a Providence Web and real estate entrepreneur, gave me some insights into why he and colleagues Jack Templin and Allan Tear formed Betaspring. “The thinking behind it was to provide acceleration for teams thinking about going into business,” he said. He noted the teams presenting Thursday received help from nearly 50 mentors with experience in their respective fields during the 12-week program. And while this first class of teams received no seed funding from Betaspring, he said, the plan for next year is to have a micro-seed investment fund that provides somewhere around $5,000 for each group that gets accepted into the program. That would put Betaspring more on par with earlier startup acceleration programs with investing capabilities such as Y Combinator in Mountain View, CA, and TechStars in Boston and Boulder, CO.

Providence is certainly not a hotbed of startup activity like Boston or Silicon Valley, but Johnson and Templin pointed to some recent startup successes in the city to inspire more young innovators to follow in those companies’ footsteps. Zeo, a developer of headbands that detect sleeping patterns, was formed by a group of Brown University students in 2003 as Axon Labs and has since gone one to close a $8.3 million Series C round of financing. (However, like many attractive Providence startups, Zeo has moved its headquarters to the Boston area.) Another promising startup with roots at Brown is Shape Up The Nation, a Providence-based corporate wellness firm that helps offices organize teams to try to outdo each other in losing weight, quitting smoking, and other health-minded challenges.

“The momentum is building,” Johnson said. “Every day I meet people who have moved to Providence and are, in one way or another, involved in the tech scene.”

Here’s a look at the seven startup teams that were part of Betaspring first 12-week program:

—Accelereach, led by Brown graduate and CEO Adam Emrich, has developed Web-based software that supports communication between health workers and patients through a combination of interactive voice responses, e-mails, and cell-phone text messages. The idea is to …Next Page »

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We’re happy to announce that there’s now an easier to way to read Xconomy on your mobile phone. Go to http://m.xconomy.com for the new mobile-friendly version of our site, which we’ve simplified for easy navigation on small screens.

All the usual content is there: our Boston, San Diego, and Seattle news stories, along with Xconomist Forum posts from all three cities, not to mention subject-specific pages for our infotech, life science, startups, energy, and deals stories. But it’s all designed to look super-clean and load quickly on a mobile device.

The truth is that no website designed with desktop browsing in mind fares well on the screen of a mobile phone. iPhone owners might demur, but even with the iPhone’s Safari browser, you have to do a bunch of zooming and panning to make your way around a regular Web page. If you’re on the go and you just want to catch a few blog posts, you don’t want to mess with all that, or with the nifty tabs, menus, and image maps that make many sites more functional in full Web browsers but just get in the way on mobile devices.

That’s why there’s a crop of companies—some of them in Xconomy’s own home towns—devoted to helping publishers optimize their content for mobile devices. We found a great one in Providence, RI, called Mofuse. Funded in part by the Slater Technology Fund, which uses money appropriated by the Rhode Island legislature to help promote technology entrepreneurship in the Ocean State, Mofuse is already helping thousands of organizations go mobile, including Fox News, Harvard Business School, Chicago Public Radio, as well as great blogs like Mashable and ReadWriteWeb. (See Mofuse’s press release about our partnership.)

We hope you enjoy the mobile site, and welcome your feedback, suggestions, and bug notes. Because our office mobile armory is limited to a few iPhones and Blackberrys, we’re especially eager to hear how the site looks and functions on other platforms. Please post a comment below, or write me at wroush@xconomy.com.

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Taxes aren’t fun for anyone, but recent events have put online retail leviathan Amazon.com in a “Boston Tea Party” mood.  In the digital age, what does “physical presence,” the usual definition of a taxable company, really mean?

—Amazon may owe 14 billion yen, or about $119 million, to Japanese tax authorities according to the Japanese newspaper Asahi Shimbun. Accusations have been laid against Amazon since 2007, but now the situation is much more serious, with Japan accusing Amazon of making sales as though products bought in Japan are being purchased in the U.S. and are not subject to Japanese tax law—despite the presence of two Amazon affiliate companies in Japan. This, according to Japan, violates the rules of an American-Japanese tax treaty.  Amazon has so far rejected the claim and is negotiating a deal with Japanese authorities.

—Things stateside aren’t much better. Amazon may owe millions of dollars to Texas in uncollected sales tax, according to the Dallas Morning News, and is currently being investigated by the comptroller’s office. Since May, the state has been checking to see if Amazon broke the law allowing sales tax to be levied on companies with a physical presence in a state, but Texas didn’t even realize Amazon had a distribution center in the state until May. Ironically, Texas only began to investigate Amazon after Amazon cited the same law it may be breaking there as its defense in New York, where it brought suit against the state because of a new law charging the company for sales tax even though it had no physical presence in the state. In January, the suit was thrown out of court.

—Unhappy with the New York decision, Amazon announced in June the shutdown of its Amazon Associates program users in both North Carolina and Rhode Island after both states passed similar laws. Users of the program place ads for Amazon products on their website and receive a commission from Amazon for each product bought through the site.  Amazon called the law in Rhode Island “an unconstitutional tax collection scheme.”

And things may even get worse, according to the annual report released in April by Amazon that warns of similar investigations in the state of Kentucky, and in Britain, France, and Germany.

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Seattle’s mighty Amazon isn’t feeling too friendly toward the Ocean State. This morning, the online retail giant sent out a terse notice to its Rhode Island affiliates, informing them that their accounts were closed effective June 29th, due to impending changes to the state’s tax laws that apply to certain online purchases. This echoes a similar move the company made three days ago in North Carolina, after that state enacted a similar tax change.

The affiliates are members of a program called Amazon Associates, in which participants place ads for Amazon products on their websites. Users are funneled to Amazon’s website through the links, and each affiliate receives a commission if purchases are made. A new provision in the Rhode Island state budget will require Amazon to collect sales taxes on all purchases made through the affiliates program. Amazon’s letter, which was posted on Seattle news website TechFlash, calls the provision “an unconstitutional tax collection scheme.”

The legislature says it is merely closing a loophole. Under the current incarnation of Rhode Island tax law, Amazon is not required to charge sales tax on purchases since it does not have a “physical presence” in the state. The tax (here called a “use tax”) does legally have to be paid, though—it’s just that most consumers do not take it upon themselves to send the state government a check for seven percent of their Battlestar Galactica DVD box set and other affiliates-related purchases. Many other states, including financially floundering California, are looking to enact similar proposals.

Steven Costantino, chair of the Assembly’s Finance Committee, told the Providence Journal that the changes in tax law were a “matter of fairness” to local businesses with actual physical presences in the state. The loophole-closing provision is based on previous legislation enacted in New York state— called, appropriately enough, the “Amazon law.”

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Say you’re running an oil company and you operate dozens of offshore drilling platforms. You have a fleet of gas-guzzling helicopters to transport the hundreds of technicians who commute every day from the shore to their rig or from one rig to another—but the numbers traveling and their destinations change every day depending on what work needs to be done. How do you get everyone where they need to go while minimizing the number of helicopters deployed and the distance they have to travel?

It’s a classic problem in what computer scientists call “optimization.” To solve it, you could employ a staff of fleet planners to come up with a new helicopter manifest every night—or you could just hand the problem over to a computer. Dynadec, a new Brown University spinoff in Providence, RI, hopes to commercialize software tools that can help companies handle urgent but mind-bending problems like this one.

The company’s core software platform, called Comet, is the brainchild of Pascal Van Hentenryck, a professor in the Optimization Laboratory at Brown’s renowned Department of Computer Science. Now the startup’s chief technology officer, Van Hentenryck is one of the originators of “constraint programming,” a school of software design that emerged in the 1990s. Constraint programming is built around a form of logic that seeks general answers (within a certain range of values or constraints) rather than specific numerical solutions to mathematical problems.

Comet uses constraint programming, along with a form of constraint-based search and a kitchen sink’s worth of other techniques, to come up with cost-saving answers to data-rich problems. In situations like the oil-rig helicopter scheduling problem—or, say, the question of how best to deploy a staff of power-line repair technicians to restore electrical service after a storm—Comet doesn’t try to find the best solution possible, Hentenryck explains. That would take too long. Instead, it aims for a “good enough” solution—or at least one that’s better than what humans could come up with on their own.

In a context such as electrical grid management, “You may have to make a decision in 30 seconds or less,” says Hentenryck. “In that time, you don’t care if the decision is optimal; you care about getting the best solution in the time frame.”

Dynadec, which was in stealth mode until June 9, is already working with customers on pilot projects in areas like vehicle routing, employee scheduling, and inventory management. The company has raised an undisclosed amount of venture funding from Providence-based Liberty Capital Partners and a group of private investors. I interviewed Hentenryck by phone last week. An edited transcript follows.

Xconomy: Tell me briefly about your career path and what led you to launch a company around your optimization techniques.

Pascal Van Hentenryck: I did my PhD in Europe on a new approach to optimization. After my PhD, I worked at European Computer-Industry Research Center on a very different way of approaching optimization problems that was much more combinatorial and less based on traditional math programming techniques. After that I joined Brown and continued to do that kind of work for about 10 years, and some of the products I developed were licensed to ILOG, which was bought by IBM and has been very successful commercially.

Around 2000 we perceived a fundamental change in technology that would affect the optimization world tremendously. I’m talking about the telecom industry, which was really changing the way the world was functioning. You have much more access to data and you can monitor almost all of your activities in real time and know where everything is in your company. So what we decided to do was take a new approach to exploiting that wealth of information.

Instead of doing long-term planning like the airlines typically do—where they schedule where their planes will be a year in advance—we wanted to …Next Page »

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Until now, the only way to read the 400-plus-page American Recovery and Reinvestment Act of 2009 (otherwise known as the Stimulus Bill) has been to download a 13-megabyte PDF version or scroll through messy, unpaginated HTML versions. But now Tizra, the Providence, RI online publishing company we profiled in February, has used its platform to create a searchable online version of the bill that breaks the giant document into easily navigable sections.

The Tizra version preserves the bill’s original formatting and page numbers, allowing users to reference or bookmark specific sections. The idea is to make the whole bill more Web-friendly—for example, by making it easier to cite specific spending provisions in the bill via social bookmarking sites such as Digg or Delicious. Tizra has also added a commenting function that lets users share their thoughts about specific pages of the bill.

“There is no single piece of information or legislation that has gained so much attention in recent times, yet there was clearly a lack of easy and useful access to this historic bill,” Tizra’s chief operating officer, Abe Dane, said in a statement. “With the media focusing so much attention on who actually read the bill, we thought it would be helpful to see how easy it was for the public, media and lawmakers to access and research it.”

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For traditional print publishers, the fact that more and more people are buying book-length works online and reading them on their laptops, iPhones, or Kindles is both encouraging and anxiety-provoking. The rise of e-books opens up potential new markets. But it means publishers have to figure out the best way to share their content electronically—and whether to hand control of the electronic publishing process over to Google’s Book Search project or to a big retailer like Amazon, where their books might get lost alongside thousands of others.

In Providence, RI, there’s a tiny startup called Tizra that’s dedicated to helping publishers take charge of distributing their own e-books, without having to build their own e-publishing infrastructure. All a publisher needs is an Adobe PDF version of a book it wants to sell online. (Most publishers already use the format as part of their production process.) Once the publisher has uploaded the file to Tizra’s online service, the company’s software chops the book into individual pages, makes those pages searchable by Google, and organizes them in customizable Web-based storefronts where publishers can set prices and sell content by the page, by the chapter, or in any increment they please.

Try doing that through Amazon’s Kindle platform or Google Book Search, which only allow users to buy whole books. “We let content owners remix, brand, price and sell their e-books the way they want, rather than the way Amazon or Google want,” says Abe Dane, Tizra’s president and COO.

University presses—which, as you might expect, have oodles of specialized content awaiting digital distribution—are eating it up. Just one year after introducing its Tizra Publisher Sofware-as-a-Service platform, Tizra has landed major accounts with the presses at MIT, Indiana University, and Duke University, as well as a partnership with the Association of American University Presses. And last month, it added a feature allowing any content owner to join the platform and create an online bookstore instantly.

Dane says the Tizra system, designed under the direction of the company’s computer-scientist CEO David Durand, was built mainly for content owners who have lots of material to share, but don’t have it in the formats (such as XML or “.epub”) demanded by many distributors, and don’t want to give up control over how it’s sliced, priced, and presented. “There was a real opportunity to take all this know-how we had and create a Software-as-a-Service platform that would enable publishers to not only get up and running very quickly but also iterate on the market, which is what people need to do if they are going to survive in current conditions,” Dane says. “In the world of Amazon and Google you’ve got to find a way to differentiate your product, and you’ve got to work at your marketing and your identity.”

There’s no proof yet, of course, that digital distribution is going to be a big money-maker for academic book publishers, or anyone else. Even in the trade-book world, where platforms like the Kindle have made the biggest inroads, e-book sales still amount to a tiny slice of overall book sales. And there are legitimate questions about whether readers want to consume weighty academic content in digital formats.

But Dane believes there’s demand for the type of content Tizra is helping to liberate. “We started out in the reference world, where people have a question in their mind and they are looking for an answer,” he says. Google is great at finding answers, he says—and if a book is in Tizra Publisher, Google can show snippets from it, just as the search company does with everything else on the Web. But people who need accurate, reliable answers will be open to paying a premium for …Next Page »

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Last week’s incessant rain across New England brought with it some good news for two area wind power companies. In Rhode Island, the state government picked the subsidiary of a Newton, MA, wind company to build a $1 billion offshore wind farm, and a Vermont company developing a new, more efficient type of wind turbine announced a big venture infusion.

Rhode Island Governor Donald Carcieri announced Thursday that Deepwater Wind, a newly formed subsidiary of Newton, MA-based First Wind, had been selected from a group of seven competing wind developers to lead construction of a major offshore wind project. Plans call for the wind farm, whose location has yet to be determined, to generate 1.3 million megawatt hours per year of electricity, enough to cover almost one-sixth of the state’s electricity needs.

Carcieri’s announcement said the winning bid was selected based on cost, the qualifications of the bidders, and the number of jobs and the amount of tax revenue to be generated. Deepwater CEO Chris Brown said the company expects to invest approximately $1.5 billion to build an 800-employee facility in Quonset, RI, where support structures for the offshore wind turbines will be manufactured. The facility is envisioned as the hub for multiple offshore wind construction projects across the northeast.

At the other end of New England, Barre, VT-based Northern Power Systems said last Thursday that Boston-based Rockport Capital Partners and Allen & Company of New York led a Series A funding round that will bring the company $37 million.

Northern Power CEO Bud Cherry said in a statement that the cash would help the company to continue development of its wind-cooled permanent magnet turbine drive system, which the company says is more efficient than traditional wind turbines at lower wind speeds. The Series A round brings the company’s total venture funding to $56 million.

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The global network of 34,000 content distribution servers built by Cambridge, MA-based Akamai allows the company to gather massive amounts of data on Internet usage—information that it distilled and published for the first time back in May. Now the company has published its second quarterly “State of the Internet” report, detailing trends such as the number of Internet-connected devices and broadband connections in each country and providing a fascinating overall picture of the Internet and its growing pains. While the number of people and organizations using the global information network continued to increase, for example, so did the volume of attack traffic and malware.

In addition to statistics collected by Akamai’s servers, the report brings together numerous published reports of incidents around the Internet—such as the repeated Internet outages in Vermont in May and June as equipment failures, fires, and bridge construction damaged a fiber ring owned by Level 3 Communications, and the bizarre story of the Epilepsy Foundation website, which was hacked by attackers who posted hundreds of flashing images designed to induce seizures in visitors with photosensitive epilepsy.

But the most valuable part of Akamai’s report is the data from its own network—information that can’t be found anywhere else. While China was the largest source of attack traffic in the first quarter of 2008, for example, Akamai found that Japan leaped into first place in the second quarter; some 30 percent of all worms, viruses, and denial-of-service attacks originated from Internet addresses there. (China fell to third place, while the United States hung on to its second-place status, generating 22 percent of attack traffic.)

The number of unique Internet Protocol addresses detected by Akamai’s network—each address representing a separate Internet-connected device—grew 5 percent in the second quarter, to some 346 million worldwide. Nearly 30 percent of those addresses were in the United States, and about 10 percent were in China, with Japan, Germany, France, the United Kingdom, South Korea, Canada, Spain, and Italy next in line. But when IP addresses are measured per capita, the Scandinavian countries continued to lead: Sweden leads the world with 0.42 unique IP addresses per citizen, followed by Norway, Iceland, and Finland. The United States is in seventh place with 0.34 IP addresses per person.

Akamai also tracks the speed at which the citizens of various countries can access the Internet. South Korea held on to its lead in this area, with 64 percent of all Internet connections boasting a speed of 5 megabits per second or more. The United States places sixth globally in broadband penetration, with only 26 percent of all connections beating 5 megabits per second, though the number of broadband connections here is increasing fast (the 26 percent figure is a 29 percent improvement on the first quarter).

Within the United States, two of the smallest states, Delaware and Rhode Island, continued to have the largest proportion of citizens enjoying broadband: 66 percent of all Internet connections in Delaware exceed 5 megabits per second, and 43 percent in Rhode Island. New York, Connecticut, Oklahoma, Nevada, New Hampshire, Massachusetts, Pennsylvania, and the District of Columbia round out Akamai’s “Top 10″ list of U.S. states with the largest percentage of broadband connections. At the opposite, “narrowband” end of the spectrum, the state of Washington tops the list once again, with 21 percent of all Internet connections taking place at the glacial speed of 256 kilobits per second or less. (Greg has more to say about that over at Xconomy Seattle.)

Akamai’s full report is available here. How quickly you can download the 1.5-megabyte PDF file will depend, of course, on where you live.

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With the number of Web-capable mobile phones sold every year far exceeding sales of desktop and laptop computers, more and more online publishers are rushing to create versions of their sites that look good on the small screens of mobile devices. At Providence, RI-based MoFuse, that’s the specialty of the house: the company builds streamlined versions of blogs and websites that are easy to read on a Blackberry, iPhone, Treo, or any other Internet-ready smartphone. And today the company got a boost from a venture capital fund backed by the state of Rhode Island.

The Providence-based Slater Technology Fund, which is financed by the Rhode Island General Assembly, announced that it has provided seed capital to MoFuse, which was founded in 2007 and already produces mobile versions of 12,000 websites. The company says that the sites it has “mobilized,” including Mashable, ReadWriteWeb, PoliticalWire, Harvard Business Publishing, and Doc Searls, get over a million page views per month in aggregate.

The amount of the seed funding round wasn’t disclosed, but the Slater fund doles out a total of about $3 million annually to new businesses originating with entrepreneurs, academic institutions, or government labs based in the state. The fund’s investments, which only go to companies that have pledged keep their headquarters in Rhode Island, are aimed at creating high-wage jobs in the Ocean State.

Slater managing director Thorne Sparkman said in a statement that MoFuse should be set to grow exponentially as Web browsing via mobile devices spreads. “MoFuse is building a talent and experience base that will be tough to overtake,” Sparkman said. “We see this as a tremendous opportunity to enable a large, global publishing population to integrate with the mobile channel.”

MoFuse has regional competition in the form of companies like Waltham, MA-based Quattro Wireless, which not only produces mobile versions of websites owned by major companies and media organizations such as Univision and NFL.com, but includes those sites in a mobile advertising network that brings the website publishers additional revenue. But by focusing on the blogosphere, MoFuse may be able to carve out a niche on the smaller end of the publishing spectrum.

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Boston-based EnerNOC, which pays organizations to join “demand response” pools whose members agree to cut back on power usage during times of peak electrical demand, said today that it has added a major new partner: the State of Rhode Island. Under a five-year contract, EnerNOC will add city, town, and government-related buildings in Rhode Island to its demand response pool for the New England region. “As Rhode Island is facing skyrocketing energy costs and consumers are being asked to pay more for electricity, reducing non-essential consumption is an important component of our commitment to support reliable, cost-effective and environmentally sustainable energy solutions,” Rhode Island Governor Donald L. Carcieiri said in a statement about the agreement.

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As if its sports teams’ bragging rights weren’t enough, Massachusetts has now topped the state rankings in science and technology prowess. Meanwhile, Washington placed a respectable #5.

That’s the word today from the California-based Milken Institute’s 2008 State Technology and Science Index. The rankings are based on 77 indicators across five broad categories: R&D inputs, risk capital and entrepreneurial infrastructure, human capital investment, technology and science work force, and tech concentration and dynamism. (You can get the full state list here, and the full report here.)

A whopping four New England states placed in the top 10, with Connecticut, New Hampshire, and Rhode Island also represented—and all three have improved their positions from 2004, the year of Milken’s last state survey. Washington is up one spot from sixth place, while Massachusetts maintained its dominance at the #1 position.

The report notes that Massachusetts scores “well ahead” of the competition, and attributes this to its world-class research institutions, cutting-edge firms, and ability to attract and retain a highly skilled work force.

Everyone loves a Top 10 list, so here it is, with notable changes in parentheses. The release said these states are “in the best position to succeed in the technology-led information age.”

1. Massachusetts (held position since 2004)
2. Maryland (up 2 spots)
3. Colorado
4. California (down 2)
5. Washington (up 1)
6. Virginia
7. Connecticut (up 3)
8. Utah
9. New Hampshire (up 3)
10. Rhode Island (up 1)

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Backchannelmedia, the Boston interactive-TV startup we profiled in November 2007 and again this April, said today that it’s signed up two new partners to test its system for bookmarking web addresses promoted on live TV. Rhode Island NBC affiliate WJAR-TV and and Manchester, NH ABC affiliate WMUR-TV will both insert signals into their over-the-air broadcasts that cause clickable onscreen icons to appear onscreen whenever TV shows include bookmarkable URLs. WMUR’s sister station in Boston, WCVB Channel 5, is already testing the system.

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If Massachusetts is the New England innovation economy’s Goliath (and we’d argue that it is), Rhode Island is David. And the state has a new weapon in hand as it goes up against its much larger neighbor: a targeted tax credit of up to $100,000. Rhode Island hopes the credit will encourage investment in its up-and-coming high-tech and life sciences companies and help counter any temptations for them to head across the border to what’s often viewed as more startup friendly Massachusetts (or anywhere else for that matter).

Will it work? Some answers might be coming soon. The six companies preliminarily approved for the Innovation Tax Credit Program last November will have their first opportunity to show proof of fulfilling the requirements later this month. Rhode Island will issue the first set of tax break certificates promptly after this review is complete, according to Melissa Withers, director of communications and market development at the Rhode Island Economic Development Corporation (RIEDC), whose organization oversees the program.

All of which means it’s showtime for the ambitious effort, which is targeted specifically at encouraging investment in companies in health and life sciences, information technology and digital media, financial services, marine trades and defense technology, technical and educational services, and consumer and industrial products. Initially proposed by the Rhode Island Science and Technology Advisory Council, the program was signed into law back in 2006. But given the required public hearing process and other steps needed to put the law into operation, the first few eligible companies are only now coming up for final approval.

The idea behind the program is to offer investors or companies up to a 50 percent credit on any seed, venture, or equity investment in a startup (or fairly young) company in the target areas—with a maximum credit of up to $100,000. To qualify, investments must be made in companies that produce traded goods or services and have had annual gross revenues of less than $1 million in the previous two calendar years. And the firms themselves must be pre-approved for the program, meaning that RIEDC has reviewed the companies to make sure they fall into the required fields and fit the revenue parameters. Firms are also reviewed on the strength of their business plan and how well qualified the applicant is to accomplish it, the perceived economic impact of their business, how well the business supports a culture of entrepreneurship, and their potential for advancing Rhode Island’s agenda of fostering an innovation economy, Withers says.

Presuming all goes well, the program provides a credit against tax liability on business corporation tax, franchise tax, or personal income tax: the company receiving the investment gets to stipulate (presumably in consultation with its investors) how the credit will be distributed. “The company could retain it for themselves, give it entirely or in part to the investor, or even give it to a subset of executive employees…or any combination thereof,” says Withers. Some investors, she notes, may not have a Rhode Island tax liability, or might just determine that the best way to support their investment is to use the credit to offset the company’s tax liability.

However the credit is to be used, being pre-approved is seen as attractive for startup companies as they seek investment, because it provides a keen incentive to potential investors to go ahead and take the plunge.

And so far, so good. A small wave of applications arrived last year as the program went into action, and …Next Page »

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