Ohio’s 2026 Venture Capital Gains Deduction:A Catalyst for Innovation and Investment—Op-Ed
By Jon Cross
During my service in the Ohio House of Representatives, I authored an amendment to the state operating budget that established the Ohio Venture Capital Gains Deduction, set to take effect beginning tax year 2026. This reform was driven by a core belief: if Ohio is going to compete for innovation on a national scale, we must compete for investment.
Why We Created It:
Ohio is home to strong universities, global corporations, advanced manufacturing, agriculture innovation, energy expansion, and a growing tech corridor—all with the talent, research, and commercial viability to support high-growth startups. Yet historically, much of the venture capital used to fund Ohio-originated innovation has flowed from outside our borders. We wanted to flip that.
The deduction incentivizes venture capital funds not only to invest in Ohio-based companies but also to headquarter operations here, establish stronger local networks, and reinvest returns into our economy. This isn’t just about tax relief—it’s about building an investment ecosystem where innovation, capital, and job creation stay in Ohio.
How the Deduction Works:
Beginning in 2026, Ohio taxpayers may claim:
100% deduction on capital gains directly tied to investments in Ohio-based businesses.
50% deduction on gains from other qualified investments made via a certified Ohio-based venture capital operating company (VCOC).
To qualify, a venture capital operating company must:
Manage at least $50 million in active assets, and
Have two-thirds of its general or managing partners residing in Ohio.
Why Ohio, Why Now:
Ohio already enjoys a strategic advantage:
A large and skilled workforce with Midwestern work ethic.
Low cost of living and high quality of life.
Central U.S. location with strong logistics and access to major markets.
Public-private leadership committed to technology, energy, agriculture, and biotech development.
Existing innovation hubs in cities like Columbus, Cleveland, Cincinnati, and emerging regional communities.
This deduction signals that Ohio is ready to lead—not just attract startups but attract the capital that helps them grow.
A Call to Investors:
With the Venture Capital Gains Deduction taking effect in 2026, now is the time for 1.) venture capital funds to consider establishing headquarters or regional offices in Ohio, 2.) Family offices, institutional investors, and private equity to evaluate Ohio-based fund structures, and 3.) entrepreneurs and startup founders to connect early with fund managers looking to leverage this incentive.
Ohio is no longer just a place where great ideas are developed—it’s where they can be funded, scaled, and built.
I’m proud to have helped craft this bipartisan policy that keeps investment dollars working here at home, supports innovation, and strengthens our long-term economic competitiveness.
The future of venture capital doesn’t have to be on the coasts. It can be in Ohio, the “heartland of America!” And starting in 2026, there’s never been a better time to invest here.
Jon Cross is the Founder & President of Cross Capital Consulting and former State Representative (OH-83).