Startup Business Customers Use Boast.AI
In some ways, a startup company is a perfect fit for Boast.AI. A startup business is unlikely to have a large and sophisticated finance department to prepare an R&D tax credit claim. Yet, a startup is also likely to be spending significant resources on new technology. As of 2021, Boast.AI is used by Bevy HQ, Dooly.ai, Klue, and ACTO.
How the Company Is Funded
The startup company is funded by a combination of venture capital and debt. “Our total funding was $123 million ($23M Series A followed by $100M Credit Facility),” Co-founder and President of Boast.AI, Lloyed Lobo, said in an interview with Startup Savant.
Brevet Capital provides the $100 million credit facility. Located in New York, Brevet Capital offers alternative financing to government entities, government contractors, and investors. The company has worked on more than $20 billion in transactions. Radian Capital led the Series A investment round in the tax credit company.
How Boast.AI Gets More Tax Credits
In simplified form, Boast.AI uses a three-step process to help its business customers get credits. First, the startup connects with technical and financial systems. Next, the AI tax credit company produces an R&D tax credit estimate. Unfortunately, the AI business still has to complete the filing process to obtain the credit.
In the future, the startup company is planning a new product that will put tax credit cash into a business even faster. “The new product will give you the cash as you go so you don't have a long wait. We'll file your claim when the tax season rolls around and handle all the paperwork. The fees will be baked into our traditional fee to prepare the claim,” Lobo commented during the interview.
The Tax Code Offers Business Opportunities
Boast.AI would not exist if the United States (US) and Canada’s tax code did not provide specialized R&D incentives. In the US, the research credit is commonly used by aerospace and pharmaceutical companies. In Canada, the startup company helps business customers apply for the Scientific Research and Experimental Development Tax Incentive Program (i.e., SR&ED tax credit).
“Globally, over $200 billion is given by governments in R&D tax incentives to fund businesses, but the application process is manual, it’s cumbersome, it’s prone to expensive audits, and it takes up to 16 months to get the money from the government because you have to incur 12 months of expenses then wait for tax season to file then wait for government processing times,” explained Lobo.
About the Author
Bruce Harpham is an author and marketing consultant based in Canada. His first book, "Project Managers At Work," shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.