By Steve Dinnen
Here’s a venture fund idea with a twist: tax breaks. Two of them, in fact.
Newly formed 2946 Ventures is set to launch in December with $3 million that it raises from accredited investors. General partner Tej Dhawan (pictured) anticipates finding 15 or so companies that it can provide with so-called “angel” and pre-seed funding. It’s focusing on information technology, biotech and advanced manufacturing.
The name 2946 comes from history: Iowa was the 29th state to join the Union — a “startup,” so to speak, in 1846.
The venture is limiting its scope to Iowa-based companies due to the state’s tax-benefit structure. And thanks to 2025 legislation, that structure works like this for 2946 Ventures: An investor commits $50,000 and writes eight checks of $6,250 each to cover eight capital calls. Each time that money is received, Dhawan sends a notice to the state, and the investor can apply for a tax credit equal to 25% of the contribution amount, which can be used to offset 25% of the investor’s state tax liability. If the investor doesn’t have a liability, he or she can sell that credit to someone else who can use it.
The state’s Innovation Fund Tax Credit Program allows up to $10 million a year for these credits. If an investor hits that limit, the credits will roll over to the next year (similar to how the Endow Iowa tax credits operate). Next Level Ventures of Des Moines also manages certified funds that participate in the program.
On the federal tax side, investments by 2946 Ventures or Next Level Ventures qualify for Qualified Small Business Stock treatment. This allows founders, early employees and investors to exclude as much as 100% of federal capital gains tax when selling stock in certain small businesses. (They have to be C-corporations; LLCs and S-corporations don’t currently qualify). This is meant to support small business startups.
Because of the state’s involvement, 2946 Venture limits its reach to Iowa. That’s not a problem, Dhawan said. He sees about 700 companies a year, from all over the country, as he manages Plains Angels, an angel investing group. There are plenty of Iowa-based companies to choose from.
Plains Angels whittles down that massive list to two companies per month that it invites to speak to its investors. Dhawan founded Plains Angels 14 years ago and is quite active in venture capitalism. With the new 2946 Venture, he’ll focus on Iowa startups and his passion to help them thrive.
If you’d like to learn more and possibly pitch in, you can request an application via email: tej@2946.vc
Five other venture capitalist groups you should know
Entrepreneurs, take heart: There’s plenty of startup money sloshing around Iowa. Angel investors and venture capitalists dot the landscape. Even the state government has pitched in to the effort.
2946 Ventures joins a number of other seed venture organizations, including:
Ag Ventures Alliance of Mason City. This works alongside Countryside Angels and focuses on agriculture.
Ag Startup Engine of Ames. This ag-related venture capital organization describes itself as a pre-seed state investment group. Its current portfolio includes a company that is developing software designed to improve soil health and another that develops livestock medicines. Its executive director, Joel Harris, previously founded an mRNA livestock vaccine company.
FIN Capital Angels of Des Moines. This female-led angel investor network typically invests between $50,000 and $100,000 in early-stage companies, focusing primarily on insurance, agriculture and medical/health technology.
Next Level Ventures of Des Moines. This group manages more than $300 million across a portfolio of more than 30 companies.
The InnoVenture Iowa Fund of Iowa. This is a $30 million co-investment fund designed to support early-stage startup companies in biosciences, advanced manufacturing and information technology. It’s the state’s first public venture capital fund.
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