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# State of the Art Risk Management Funding Texas Innovation
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## The Team
### Leadership
#### Joe Milam
Managing Member. Joe has 25+ years experience as a money manager and philanthropy consultant.
Prior to AngelSpan/The Legacy Funds/The Texas Legacy Fund, Joe founded and managed Legacy Capital Management, Inc., a fee-based RIA. Legacy was originally headquartered at 3000 Sand Hill Road in Menlo Park. He has been published  in Institutional Investors Journal of Private Equity, Journal of Portfolio Management, and Practical Applications Journal and is a recognized expert in the optimal venture fund model.
Texas Trivia: Texans are proud of their history. The Daughters of the Republic of Texas (DRT) recognizes  as the first hero and first martyr of the Texas Revolution. It was his military leadership that led to the victory in the Battle of San Antonio. The DRT proclaims Ben Milam *caused* the Battle at The Alamo.
Joe Milam is a cousin of Ben Milam, 7 generations removed. In fact, Joe’s first name is Ben, and he was born on the same day Ben Milam was killed – December 7th.
#### Adam McKinstrie
Co-General Partner. Adam has 15+ years experience in the investment management industry. Startup founder.
Adam began his career in the investment management industry advising high net worth families in areas of investments, philanthropy, estate planning and taxes. Adam has been with AngelSpan since 2016 as an Advisor, Chief Operations/Product Office, Board Member and significant shareholder. He is also one of the founders of The Legacy Funds and architect of its Venture-as-a-Service platform. Currently, he consults as a product and operations strategist. Adam is a graduate of Union College with both an Undergraduate degree and an MBA.
#### Alec Boggess
Co-General Partner. Alec provides portfolio analysis for the Texas Legacy Fund and Performance Analyst for AngelSpan’s startup clients.
Prior to joining AngelSpan, Alec used his early time out of college developing skills in consultative sales and marketing. He joined a digital marketing agency, where he established himself as a valuable campaign creator and manager. Additionally, he wore a second hat in driving new client acquisition, further honing his abilities in business development.
Alec obtained his degree from the University of Texas, where he majored in Economics, with a focus and curiosity towards behavioral economics and finance.
#### Mel Carter
Venture Advisor. Mr. Carter focuses on private equity fund investments, and is responsible for deal sourcing and investment underwriting activities. He also heads the venture, growth, and regionally-targeted investment verticals. Mr. Carter built and took public the world’s largest engineered fiberglass-reinforced products company as Co-Founder and Vice President of business development of Denali Incorporated. While at Baker Hughes he participated in over $1.4 billion in completed acquisitions and divestitures. Mr. Carter received his Bachelor of Science with honors in Mechanical Engineering and his MBA with honors from The University of Texas at Austin.
#### Tim Bixler
Venture Advisor. Tim has been an active investor in the public markets for over 30 years and in the private markets for over 25. Most recently he was a Managing Director at Credit Suisse, managing the HOLT division following the sale to Credit Suisse in 2002.
HOLT became recognized as a state-of-the-art framework to do fundamental analysis on public securities and is now taught as part of the CFA curriculum.
At HOLT he rose from a Sales position to eventually the Presidency, negotiating the sale of HOLT personally to Credit Suisse.
### Champions
Terry Carlone
Corley Phillips
Jeff DeCoux
Scott Sanders
Patricia Greene
## The Problem
* Approximately 2/3 of all venture capital invests in 3 metro-regions.
* Entrepreneurs NOT in those communities struggle for funding and consequently, search for funding elsewhere.
* Economic benefits of innovation are NOT geographically distributed.
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> *86 of the nation’s largest 100 metros have either seen their share of the national (digital service jobs) sector go sideways or actually shrink since 2010.*
>
> – Brookings Institute
> ---
## Why Entrepreneurs Care
* ### Funding
  Texas startup CEOs now have a defined, transparent path to funding and no longer have to pitch. Instead, they’ll complete an online application.
* ### Time
  With a clear path to funding, entrepreneurs can dedicate more time to building their business and fostering relationships with those that care about their success rather than spend an exorbitant amount of time trying to entice investors.
* ### Access
  Entrepreneurs should be visible to investors that care about the breakthrough technology they are creating. The Fund and its advisors can provide companies with best-in-class tools and hands-on mentoring so long as the companies maintain a commitment to transparency.
## Why Community Leaders Care
* ### Transparency
  Company specific and portfolio analytics to monitor execution and identify holdings that merit follow-on funding.
* ### Risk Management
  An early-stage venture fund that genuinely manages portfolio risk using institutionally rigorous diversification and security selection strategies.
* ### Tax Efficiency
  Optimize on existing tax laws that can lower the after-tax risks and render profits potentially tax-free.
## Solution
### The Texas Legacy Fund applies the latest tools and research, establishing an institutionally rigorous and scalable way to invest in Texas innovation.Worthy startups across Texas will gain access to the resources they need to build their businesses, and venture investors in the Texas Legacy Fund will be positioned to benefit.
### Traditional VC Funds
##### **Portfolio Transparency**
Inefficient analysis and monitoring
##### **Standardized Reporting**
Inconsistent, if any
##### **Institutional Approach**
Lack any rigor or systematized method
##### **Capital Deployment**
Inefficient, deal by deal, followers
##### **Tax Advantages**
Few concerned with after-tax returns
##### **Thesis Focused**
Scattered focus, followers
### The Texas Legacy Fund
Company and portfolio level analysis
Monthly updates and quarterly reports
Multi-factor filter to de-risk seed portfolio
Diversified and disciplined
QSB §1244 and §1202 optimized
Texas’s bright future of innovation
### Additional Reading
## How
### Defined by Research. Rooted in Best Practices. Executed by Professionals. Focused in Texas
For more information on how to build your legacy by supporting Texas.
Investors
Apply for funding from the Texas Legacy Fund.
##### Invest in the Texas Legacy Fund
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© 2025 The Legacy Funds
# Qualified Small Business Stock Tax Information
Qualified Small Business Stock (QSBS) treatment of angel investments are often overlooked as tax codes that can incentivize investors by reducing the after-tax risk and raising the after-tax returns.
## §1244 – Loss Treatment
Losses are above the (AGI) line deductions. Shareholders can deduct QSB stock as ordinary losses should the startup fail. With charitable donations treated as below the line deductions, a startup investment is a better tax break!
#### Requirements
Applies to individuals 1 investing in a C-corp startup. Must invest in the first $1M of capital in an equity-like instrument.
## §1202 – Gains Treatment
Profits from exits are 100% tax free. Permanent tax exclusion of 100% of gains on the sale or exchange of QSB stock acquired after September 27, 2010 and held for more than 5 years. $10 million limit on exclusion for each transaction.
Applies to individuals 1 investing in a C-corp startup. Startup must make a product (not a service business).
## 1045 Exchange – Gains Rollover
§1202 gains can be reinvested tax free. Shareholders can roll over capital gains from the sale of QSB stock pre-tax if other QSB stock is purchased. Five-year holding period for 100% tax exclusion under §1202 can be met with a holding period of new investments.
Applies to individuals 1 investing in a C-corp startup. Must reinvest within 60 days from exit into another QSB.
1 Investors must invest directly or via a pass-through entity such as an LLC or revocable trust into an equity-like instrument such as preferred stock or a convertible security. Investing through a debt instrument such as a convertible note does not qualify.
The Legacy Funds LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
# Apply For Funding
Each Legacy Fund portfolio company must pass through a series of prerequisites designed to identify those companies that have achieved a defined set of milestones. These “minimally viable milestones” reflect a sound foundation of operational progress and serve as another risk mitigation step in our portfolio construction process.
#### Eligibility
In order to be eligible to apply for a Legacy Fund, startups must show transparency by using  service for at least two consecutive months, creating monthly updates for fund personnel to review.
It is important to note that  service is designed to help entrepreneurs effectively communicate to widest audience possible not just Legacy Fund personnel.
Seed service is $249/month to be paid for by the startup.
#### Applicant
After two consecutive monthly Updates, startups may apply for the Fund.
The “minimum viable milestones” are incorporated into each Legacy Fund platform’s application process. Applicants must upload proof of the following in order to be considered a Candidate for a Legacy Fund:
1. Product Roadmap/Minimum Viable Product
   * Brief description (500 characters or less)
2. Market
   * Brief description of the problem it solves, who cares (target market), and traction to date (1,000 characters or less)
3. C-Corp documentation ()
   * Articles of Incorporation/Certificate of Incorporation
   * IRS SS-4
4. Cap table ()
   * Total amount raised to date (must be < $800K)
   * Date of most recent term sheet
   * Copy of most recent term sheet
5. External Counsel (Name and Contact Information)
   * Legal Counsel/Attorney
   * Accountant/Bookkeeper
   * Advisor/Advisory Board
#### Candidate
After the third consecutive monthly Update, the candidate profile will be available for Champion review to determine Legacy Fund approval. Candidates not approved will be placed back into the candidate pool and may be reviewed by another Champion. This process will continue until the Fund is completely filled.
#### Acceptance
Once chosen, funding disbursement is determined by a commitment to transparency through timely and consistent monthly updates produced through AngelSpan’s Investor Relations service.
Fund portfolio companies will be required to upgrade to AngelSpan’s Scale service which includes SMART® IR analytics and quarterly reports. Funded companies will receive 10% of their allotted funding amount for each monthly update and 20% for each quarterly report produced.
After all funding has been disbursed to portfolio holdings, maintaining a consistent cadence of communication through AngelSpan’s Investor Relations service is highly encouraged. Legacy Fund investors will base their follow on funding decisions on this signal.
Learn More
##### Learn More About Applying for Funding From The Texas Legacy Fund