123—2.2 (15E) Definitions. The following definitions are applicable to this chapter:
“Affiliate” means a spouse, child, or sibling of an investor or a corporation, partnership, or trust in which an investor has a controlling equity interest or in which an investor exercises management control. For purposes of these rules, “controlling equity interest” means ownership of more than 50 percent of the outstanding equity interests of a corporation, partnership, limited liability company or trust. “Management control” means holding more than 50 percent voting power on any board of directors or trustees, any management committee or any other group managing a corporation, partnership, limited liability company or trust.
“Board” means the Iowa capital investment board created under 2002 Iowa Acts, House File 2078, section 3.
“Community-based seed capital fund” means a fund that meets the following criteria:
	  1. 	 Is organized as a limited partnership or limited liability company;
	  2. 	 Has, on or after January 1, 2002, a total of capital commitments from both investors and investments in qualifying businesses of at least $125,000, but not more than $3 million. If the fund is either a rural business investment company under the rural business investment program of the federal Farm Security and Rural Investment Act of 2002, or an Iowa-based seed capital fund with at least 40 percent of its committed capital subscribed by community-based seed capital funds, the fund may have more than $3 million of capital commitments from both investors and investments in qualifying businesses; and
	  3. 	 Has no fewer than five investors who are not affiliates, with no single investor and affiliates of that investor together owning a total of more than 25 percent of the ownership interests outstanding in the fund.
“Investor” means an individual making a cash investment in a qualifying business prior to January 1, 2004, or an individual taxed on income from a revocable trust’s cash investment in a qualifying business prior to January 1, 2004, or a person making a cash investment in a community-based seed capital fund or investments in a qualifying business made on or after January 1, 2004. “Investor” does not include a person who is a current or previous owner, member, partner (limited or general) or shareholder in a qualifying business for investments made prior to January 1, 2004. “Investor” does not include a person that holds at least a 70 percent ownership interest as an owner, member, or shareholder in a qualifying business for investments made on or after January 1, 2004.
“Near equity” means debt that may be converted to equity at the option of the debt holder, and royalty agreements.
“Person” means an individual, corporation, limited liability company, business trust, estate, trust, partnership or association, or any other legal entity.
“Professional services” include, but are not limited to, services provided by professions listed in Iowa Code section 496C.2(4).
“Qualifying business” means a business that meets the following criteria:
	  1. 	 The principal business operations of the business are located in the state of Iowa;
	  2. 	 The business has been in operation for three years or less from the date of the investment for which a credit is claimed for investments made prior to July 1, 2005, or the business has been in operation for six years or less from the date of the investment for which a credit is claimed for investments made on or after July 1, 2005;
	  3. 	 The business has an owner who has successfully completed one of the following:
	  ● 	 An entrepreneurial venture development curriculum, such as programs developed by a John Pappajohn Entrepreneurial Center, or a holistic training program recognized by the Iowa department of economic development which generally encompasses the following areas: entrepreneurial training, management team development, intellectual property management, market research and analysis, sales and distribution development, financial planning and management and strategic planning;
	  ● 	 Three years of relevant business experience;
	  ● 	 A four-year college degree in business management, business administration or a related field;
	  ● 	 Other training or experience sufficient to increase the probability of success of the qualifying business;
4. The business is not a business engaged primarily in retail sales, real estate or the provision of health care or other professional services;
	  5. 	 The business shall not have a net worth that exceeds $3 million at the date of the investment for which the credit is claimed for investments made prior to July 1, 2005, or the business shall not have a net worth that exceeds $10 million for which a credit is claimed for investments made on or after July 1, 2005; and
	  6. 	 Within 24 months from the first date on which the equity investments qualifying for investment tax credits have been made, the business shall have secured total equity or near equity financing equal to at least $250,000.