Rules of the opportunity zone road pave way for investment
clarifications to a Trump administration initiative that offers shelter from capital gains taxes in exchange for investment in designated geographic areas has energized a growing list of city investors seeking to take advantage of the program.
“We now have the confidence to fund a business and know they won’t be in violation of the opportunity zone rules,” said Brian Phillips, an investor who plans to raise $25 million to back startups in the designated areas, including the Brooklyn Navy Yard. “It’s accelerating the start of our fund.”
NEW YORK--(BUSINESS WIRE)--Apr 10, 2019--The Pearl Fund ( www.thepearl.fund ), the first opportunity zone fund that is also a venture capital fund focused on spurring economic development in opportunity zones throughout New York and Pennsylvania—is pleased to welcome three new advisors. The team of highly-specialized, diversified and accomplished executives brings extensive leadership experience for multinational corporations and startups. The new members are:
“We are pleased to welcome and gain the perspective of our new advisors,” said Brian Phillips, founder and managing partner of The Pearl Fund. “Our investors, startups, and founders will benefit tremendously from the breadth and depth of experience that these leaders bring to the table, and we look forward to putting their insights to work.”For more information, visit www.thepearl.fund.com
About The Pearl Fund The Pearl Fund is the first opportunity zone fund that is also a venture capital fund investing in early-stage startups and their founders. Led by serial entrepreneur and global economic development expert Brian Phillips, who has been a founding member of over a dozen startups (two IPOs, two acquisitions and one sold via an MBO), The Pearl Fund focuses on high-potential businesses that can yield a 10X+ return.
....Brian Phillips, on the other hand, can't wait for the starting gun. A serial entrepreneur, he's looking to raise $25 million to put into opportunity zones and plans to launch an investment vehicle, the Pearl Fund, this month. His game plan is to set up shop in the Navy Yard to be close to scores of startups that could be interested in investors like him.
"When people hear about opportunity zones, they say, 'You can do this? It seems too good to be true,'" said Phillips, whose enthusiasm is winning attention. After speaking at a January expo, he was invited to appear at a March 14 White House event to tout opportunity zones. "It's frothy these days—that's for sure," he said.
Tinkering with the tax code to encourage investment in poor neighborhoods is nothing new, but opportunity zones go where no incentive program has gone before.
Here's the pitch: An investor takes capital gains from any source—the sale of stock, a house, a work of art—and rolls the money into a fund that invests in real estate or small businesses located in the nation's nearly 9,000 opportunity zones. Up to 15% of the original capital gain is tax-exempt provided the money stays in the fund for 10 years. Beyond that, investors don't have to pay any capital-gains taxes on opportunity-zone investments that appreciate in value
... But the yard's crown jewel—the spot that really excites Phillips and other opportunity-zone promoters, is New Lab. Located in a building where hundreds of World War II warships were built and repaired, the two-year-old incubator houses about 140 tech startups collectively valued by venture-capital firms at $1.7 billion, according to its CEO, Shaun Stewart. Tenants include Jump, a bike-sharing service that Uber bought last year for a reported $200 million; a company developing floor tiles that generate power when stepped on; and another cultivating animal-free leather.
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