Update on the Invest Georgia Program: 2015 Legislative Session

4 May

In 2015, the Georgia General Assembly Legislative Session lasted from January 12 through April 2. The Invest Georgia Program was active during this Session through House Bill 439, which was amended late in the Session to include a $55,000,000 allotment for the Invest Georgia Program. This $55,000,000 allotment would be considered a second tranche of funding to fulfill the original Invest Georgia mission started in 2013 of creating a $100,000,000 state-based fund to help grow Georgia-based companies over the next decade. Invest Georgia was allocated $10,000,000 in the 2014 Legislative Session and is now actively conducting due diligence to invest this initial allotment.

In Georgia, the Governor has 40 days from the end of the Legislative Session to sign any passed legislation. The deadline for this time period this year is May 12. Governor Deal has yet to sign HB 439 and any support the community can give to encourage the passage of this bill would be greatly appreciated. This bill is highly supportive of the entire startup and investment community in Georgia.

Background on House Bill 439:(2015)


– HB 439 is a “dual” legislative bill in that it supports two different types of programs in Georgia. HB 439 would fund the Invest Georgia Program with a $55M allotment, and HB 439 would also fund a completely separate program by the name of “New Markets Jobs Act”. The two programs are entirely separate, but both are contained in HB 439.

Invest Georgia is a program created by statute (HB 318) passed in 2013 that allows the State of Georgia to create a $100M venture and private equity fund that would exclusively fund Georgia-based companies. The Invest Georgia Program within HB 439 has wide community support and would be very supportive of early stage and growth stage Georgia-based companies. More about Invest Georgia can be found here:


HB 318 (2013)


– The Georgia New Market Jobs Act program of HB 439 is an initiative supported by out-of-state investment firms (Advantage Capital, based in Louisiana and Enhanced Capital, based in New York) that mirrors a Federal Program by the name of the New Markets Tax Credit Program. Essentially, Advantage Capital and Enhanced wish to create a Georgia state-based tax credit program similar to the Federal New Market Jobs Act. The New Markets Jobs Act would fund Georgia companies in low income and rural areas only—very similar criteria to the federal program. Both Advantage Capital and Enhanced Capital have been active in Georgia politics since at least 2002 and were formerly supportive of earlier legislation in recent years known “CAPCOs”.

We hope that Governor Deal will continue his support for the Invest Georgia Program by agreeing to fulfill the prior commitment to help grow Georgia based companies. The Invest Georgia Program funds and supports homegrown entrepreneurial, high growth Georgia companies that create future high wage jobs, create a future tax base for Georgia, creates jobs within state borders and retains our educated workforce in Georgia.

Invest Georgia Program, 2015

31 Jan

I have not written on this particular blog in quite a while-Why?



The Invest Georgia Program officially launched yesterday, January  30, 2015. We have closed on, and are funded with, the first tranche of $10,000,000. Exciting times.

Over the next several weeks, I’ll be cleaning up this particular blog to make it more focused on venture capital in the state of Georgia. Some of my older posts on angel investing or crowdfunding may stay on this blog–but for the most part, this blog will now focus on my involvement in venture capital in the Great State of Georgia.

Note that this blog domain is investgeorgia.org while the website of Invest Georgia is investgeorgia.net

To make it a bit easier to answer questions about the Invest Georgia Program in the short term,  let’s do an old school FAQ–For today, I’ll run through a short list of the most popular questions I have received in recent days. I’ll try and repeat this for a few weeks as I receive more questions as I engage the Georgia community about the Invest Georgia Program.

1.) I heard it has taken a while to get the Invest Georgia program off the ground. Is that true?

Sure. We’ve been working on the Invest Georgia “concept” since 2011. The legislation allowing the program was introduced into the Georgia General Assembly during the 2012 Legislative Session (House Bill 718), was passed in 2013 Legislative Session (House bill 318) and signed into law in April of 2013. Since April of 2013, we have been hard at work putting the pieces of the program together and sourcing funding. The Invest Georgia is a unique program, one of the first of its kind in Georgia. So, it is to be expected to take time—to do it right.

2.) What is your role?

I am the Executive Director and am responsible for day to day operations. I report directly to the Board of Directors of the Invest Georgia program. The Board was appointed by Governor Deal, Lt. Gov. Cagle and Speaker of the House David Ralston. The list of the Board of Directors can be found on the website.

3.) What is the role of the Board of Directors?

Oversight and transparency of the program. Guidance to the Executive Director and Fund Administrator.

4.) What is the Fund Administrator?

As guided by the statute, the fund administrator will advise the Board of Directors on the initial due diligence of venture funds who apply for the program. The fund administrator will also advise on year end reports due to the Governor, Lt Governor, Speaker of the House, Chairperson of the Senate Finance Committee and the House Committee of Ways and Means as well as other duties deemed necessary by the Invest Georgia Board of Directors.

5.) Is there any oversight of the Invest Georgia program?

Yes. As you can see from question #4, the Invest Georgia Program has deliberately built in several layers of oversight.

Both the Executive Director and the Fund Administrator report to the Invest Georgia Board of Directors. The Board of Directors, in turn, report back to individuals or entities that appointed them to the Board of Directors: Governor, Lt Governor, or Speaker of the House. Reports are due annually to the respective bodies as mentioned in #4.

6.) Does the Invest Georgia Fund invest only in “startups” in the state of Georgia?


60% of the fund will be directed towards “growth” stage Georgia companies and 40% of the fund will be directed towards “early stage” Georgia companies.

In the legislation, a “growth” stage company is generally defined as a company:

– HQ based in Georgia

– Revenues in excess of $1,000,000

– Under 100 employees

– A business not engaged in retail sales, real estate, any business where admission is charged, insurance, banking, financial services, natural resources extraction or professional services where a license is required.

In the legislation, an “early” stage company is generally defined as a company:

– HQ based in Georgia

-Revenues less than $1,000,000

– Under 20 employees

-Has not raised more than $2,000,000 in outside capital

– A business not engaged in retail sales, real estate, any business where admission is charged, insurance, banking, financial services, natural resources extraction or professional services where a license is required.

The venture capital funds participating in the Invest Georgia program will make the final decisions on investments. No company-specific investment decision making process will lie either with the Board of Directors or the Executive Director.

7.) Does the Invest Georgia Fund invest only in Georgia-based companies?


8.) Does the Invest Georgia Fund invest directly into Georgia-based companies?

No. The Invest Georgia Fund is a “fund of funds”. The Invest Georgia Fund will invest directly into professionally run, Georgia-based venture capital funds that have a history of investing into Georgia companies. In turn, the selected venture funds will invest into Georgia based companies after their customary due diligence process.

9.) Are you excited to be involved as Executive Director?

Absolutely! I started writing this blog post at 5:00 AM on January 31. I am ready to go!



Yowza! How My Meetup Group Got Hijacked…

21 Feb

Boy, did I learn a hard lesson about Meetup policies yesterday…

…Imagine my surprise yesterday morning when the long term Co-Organizer (Michael Pruner) of my Georgia Crowdfunding Community Meetup Group emailed me and told me that he and I were no longer Organizers (leaders) of our Meetup group. I quickly logged into Meetup–and was first greeted by a message that Meetup was not getting responses to emails sent to me. Meetup asked me to “verify” my email again, which I did. I then navigated to the Georgia Crowfunding Community Meetup group and, sure enough, this guy, “J.R. McNair”, was now the main Organizer of the group with admin privileges. Michael and I had been sent “down” as just members of the Meetup group we created. For the record, Michael and I do not know this person and have not agreed to pass on the role of Organizer of our Meetup group to this person.

As background, I founded this particular Meetup Group back on April 17, 2013. My intention was to help build out the then young Georgia intrastate crowdfunding community (Invest Georgia Exemption)  and help build out the local crowdfunding market—until such time that the SEC promulgated rules on Title III of the JOBS ACT which would enable interstate crowdfunding .  I wrote about my experiences in this blog post, this one and this one.

Back to the hijack–I needed to find out what had happened– Michael and I would never turn the group over to anyone–unless we had an agreement beforehand. (This person had never attempted to contact us, so we were caught completely off-guard.)

I quickly messaged this person and in about 30 minutes he responded. I called him and told him we didn’t know what had happened, but that Michael and I had the intention of maintaining leadership (Organizer) of this Meetup Group. I offered to reimburse any and all past dues and thanked him for stepping in when apparently Michael and I were not receiving emails about dues payable or the possible disbanding of the group. –The conversation went downward from there. Essentially, this person refused to turn the group back over to Michael and me unless we struck some sort of “deal”. Within an hour, both Michael and I were kicked out of the Meetup group we created with no chance to rejoin.

I’ve contacted Meetup but have yet to hear back. I don’t have high hopes. Just since yesterday when this happened, I have had heard of two other groups in Atlanta where the same scenario played out.

So, for the record, Michael Pruner and I no longer have any association with the Georgia Crowdfunding Community Meetup group or with “J.R. McNair”.

Good luck, Meetup.

Invest Georgia “Request For Proposal” for Fund Administrator

9 Feb

The Invest Georgia Executive Director and the Board Of Directors of Invest Georgia have released the “Request for Proposal” (RFP) for a Fund Administrator for the Invest Georgia Program on the official website: www.investgeorgia.net

The RFP can be found here:


Based on the 2013 Invest Georgia statute (Ga. Code Section 10‑10‑10 et seq.) the Invest Georgia Program and the Invest Georgia Board of Directors are required to select and hire a Fund Administrator. The Fund Administrator is to be selected by the Invest Georgia Board of Directors through a transparent and open bid process.

The statute can be found here:


Questions regarding the RFP are allowed to the Executive Director through February 16, 2015 (Section X). Final applications are due to the Executive Director by email by March 6, 2015.

Contact information for delivery of the RFP application can be found on the RFP (Section XVII).

Thank you to all who are participating!

Update on Georgia Crowdfunding

12 May

Much progress has been made in Georgia regarding “legal” intrastate crowdfunding since I first posted about this topic a little over a year ago. Below, I’ll give a quick update on how the market is growing regarding the use of the Invest Georgia Exemption.


– Platforms:

All of the below platforms allow “non-accredited” investors to invest using the Invest Georgia Exemption. Angel investors (Accredited investors) can also invest, but the primary market is directed towards non-accredited investors. (FYI-“interstate” investing, a la JOBS ACT, is not yet legal)

– SparkMarket: equity. Atlanta based, IGE

– Sterling Funder: equity, Atlanta based, IGE

– Groundfloor: debt, North Carolina Based, operating in Georgia, Real estate focused, operating in GA and other states, IGE, Reg A

– Crowdvested : equity, debt, real estate focused, Georgia-based properties, IGE

– MarkerStaker equity, Atlanta-based, medical innovations, IGE


– Georgia Crowdfunding Community (Atlanta, 350+ members, meets once a month, free)



-Georgia Crowdfunding Investors (Atlanta, private, new, dues-paying, meets 1-2 a month, non-accredited members)



Augusta Crowdfunding Group (Augusta, GA, 30+ members)



Service Providers (lawyers that understand the Invest Georgia Exemption)


Stephen Wright, Taylor English

Dan Schmalo, 360 Law


State of Georgia Resources

Tom Zagorsky, Director, State Securities Division



“Understanding the Invest Georgia Exemption”, Tom Zagorsky

“Understanding the Invest Georgia Exemption” (Tom Zagorsky)



There are 367 “active” angel investors in Atlanta, Georgia.* Whaaaat??

2 Dec

Is this good or bad? True or not true?

For the sake of clarity, I consider an “active” angel to be one who is a “member” of an organized angel group (such as the Common Angels in Boston) and who is actively investing in angel deals in their community or through one of the new online platform such as AngelList.

FYI–I have tackled this subject of accredited households in a previous post, and have had a long standing interest in determining the “numbers” of active angel investors.


However, in my August post, I only used the GAO and SEC studies to determine the approximate number of accredited households in the US, not the actual number of “active” angel investors in the US.

Number of “active” angel investors in the US: 265,000.

Here is where the number 265,000 for active angels is derived–Last week, I read a recent presentation that the Angel Capital Association gave to the SEC at the November 21, 2013 SEC Forum on Small Business Capital Formation.  The Angel Capital Association is the preemminent angel investor trade organization in the United States and they are the sister organization to the Angel Resource Institute. They collaborate with Silicon Valley Bank on the Halo Report and they collaborate with the New Hampshire Center for Venture Research. I trust their numbers and their research.

SEC Presentation:


 SEC Agenda:


In the presentation (slide 8) the Angel Capital Association gives the number of accredited (“angel” investors) households on a national basis (8.7M—which is on the high end), the number of “active” angels (265,000), and the number of angel investors in formal angel groups in the United States (15,000). The 265,000 “active” angels represent approximately 3% of the overall population of the 8.7M “accredited” households. Interestingly, the above 3% also corresponds roughly with my previous post in which between 3% and 5% of the overall population are “accredited” households.

By coincidence, the Wall Street Journal published a story today about angel investing that uses similar numbers:

 “What You Need to Know to Become an Angel Investor”


Since I live in Atlanta, Georgia, we will use Atlanta as an example of these numbers and attempt to postulate how many accredited households are in the state of Georgia and in the city of Atlanta and how many of those accredited investors can be considered “active”.

– 2012 US Population of Accredited households: 8.7M

– 2012 Active Angel Investors: 265,000


– 2012 US Population: 315M


– 2012 Georgia Population: 9.9M


– 2012 Atlanta, Georgia population: 443,775


8.7M/315M = .0276 or 2.76% of the US population are accredited households

9.9M X .0276 = 273,240 accredited households in Georgia

273,240 X .03 = 7,541 “active” angel investors in Georgia

443,775 (Atlanta Pop) X .0276(% of accredited investors) X .03 (Active angels %) = 367

So there you have it. If you are a company looking to raise capital from accredited, “active” angels in the city of Atlanta, Georgia, you have 367 customers.

*I am not a researcher, nor a lawyer nor represent any angel group. I just like to keep up with this fascinating field. Please alert me if you believe my math above is incorrect or my conclusions in error.

How Many “Accredited Households” Exist in the U.S. ?

30 Aug

Many of you reading this blog know how to define an “accredited investor” (aka: angel investor)

Question is, how many “angel” investors really exist in the U.S.? It’s a question, and the answer, that has eluded me for years. However, with more attention focused on angel investing these days, numbers are now easier to come by.

There are published reports (Google, etc) that will give you a number, but I wanted to determine the information using sources I can find that are reliable. Often as well, these numbers will mix the terms of individual angel investors with the term of accredited households.

First,  let’s take a look at the July 2013 GAO report to the Securities and Exchange: “Alternative Criteria for Qualifying As An Accredited Investor Should Be Considered”.

This is a 69 page report by the U.S. Government Accountability Office generally recommending that the SEC add additional qualifications in 2014 to the “accredited Investor” criteria such as “liquid investments” and the “use of a registered advisor”. However, buried in the report are some wonderful facts related to the number of “accredited “households” that exist in the U.S.

To start:

On page 18/19, we see that the GAO uses the Survey of Consumer Finances to determine that there are 118,000,000 households in the U.S.

On pages 9/10, we see that SEC uses proprietary information (dated 2007 re: page 10) to determine the percentage number of households in the U.S. that are accredited.


1980: 1.7% (when accredited investor status first initiated)

2007: 9.0%

2010: 7.2% (after “primary residence” was removed from qualifying criteria)

However, the GAO uses information dated 2010 (page 10).


1980: not available

2007: 5.2%

2010: 2.8% (after “primary residence” was removed from qualifying criteria)

We can do a quick calculation using the SEC 2007 numbers and the GAO 2010 numbers to determine the estimated number of “accredited households” in the U.S..

SEC                                                 GAO

2007:  10,620,000                          2007: 6,136,000

2010:  8,496,000                            2010:  3,304,000

(statistical range +/- 15%)

So, from a 2010 high range using SEC numbers to a low range using GAO numbers, we can see that roughly 3, 300,000 and 8,500,000  accredited households exist in the U.S.

Surprised? So, how many exist in your state? Your town? And how many of these “accredited household” are active angel investors?  Those are my next posts….


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