This week Kevin Durant was named the 2017 Bill Russell NBA Finals MVP after leading Steve Kerr's Golden State Warriors to victory over the Cleveland Cavaliers. Durant averaged more than 30 points per game in the NBA Finals, sealing his name in the history books.
Off the court Kevin Durant is building quite the investment portfolio of tech companies under the umbrella, Durant Company. According to the New York Times, the portfolio consists of businesses like Postmates and Acorns, as well as hotels, restaurants, and film and television development companies.
While Durant drives around Silicon Valley in his Tesla Model S, a company that received a $15 million California Competes Tax Credit in 2015, Postmates and Acorns have yet to secure any California tax credit or business incentives.
According to its website, Postmates founded in 2011, is an on-demand delivery company, connecting customers with local carriers (think Uber but for anything.) At the time of a March 2017 Forbes interview, Postmates employed 500 people on staff, with 180 in its new Nashville support center and most of the rest in downtown San Francisco. The company also brought in $250 million in revenue in Q1 2017.
Founded in 2012, Acorns, a micro investing app based in Irvine, California, rounds purchases up to the nearest dollar and automatically invests the spare change. According to Business Insider, Acorns grew from between 20 to 30 employees at its launch to over 80 in 2015. As of June 2017, Acorns' LinkedIn page has 134 employees. The company also raised $62 million in Q2 2016 according to Tech Crunch.
But if Durant is going to invest millions of dollars of his own money in these two companies, he may want to also make sure the companies are positioning themselves to secure tax credits and business incentives, not just more venture capital investment.
Similar to Telsa, Postmates and Acorns are eligible for the California Competes Tax Credit.
The California Competes Tax Credit, designed to attract high paying jobs in specific industries, is a negotiated tax credit available to businesses who want to come, stay, or grow in California in exchange for meeting specific hiring and investment goals over a five-year period.
While the amount of the tax credit varies from year to year, $243.4 million in tax credits were available for allocation during 2016-17 fiscal year. Awardees have ranged from a $20,000 allocation for netting 3 new jobs and $0 capital investment to a $15 million allocation for netting 4,400+ new jobs and $2.5 million capital investment.
Postmates' and Acorns' growth make them prime targets for the California Competes Tax Credit. If they, or any company, want to be MVPs of the business world, I recommend leaving no rock unturned. Do your research to be sure you're securing the tax credits and business incentives available to you.