Why Governor Nathan Deal needs to sign the Invest Georgia legislation
What is the Invest Georgia legislation?
House Bill 318, passed on March 25 by the Georgia General Assembly during the 2013 Legislative Session, creates what is known as the Invest Georgia program. The Invest Georgia program is a $100M state-based venture capital fund. The Invest Georgia fund would help to fund Georgia-based high growth companies in their early to growth stages of life. Governor Deal has until May 7, 2013 to sign any legislation passed during the 2013 General Assembly. The sponsor of the bill, Rep. Ron Stephens (Savannah) has asked for a “sign date” for the bill.
Here is a link to the House Bill 318 Legislation: http://www.legis.ga.gov/legislation/en-US/display/20132014/HB/318
Who would oversee the Invest Georgia program?
The program would be overseen by an Advisory Board appointed by Governor Nathan Deal, Lt. Governor Casey Cagle and House Speaker David Ralston. The Advisory Board would then be tasked (among other things) with selecting an outside, independent fiduciary that would assist in selecting Georgia-based venture capital firms and/or private equity firms in the state of Georgia to invest in Georgia-based early and growth stage companies.
How could the Invest Georgia program help the state of Georgia?
- Competitiveness: Georgia would join many other states in the Southeast that have similar programs. Tennessee, North Carolina, South Carolina, Florida and others within the Southeast have similar programs.
- Multiplier Effect: From 1970 through 2010, for every $1 of venture capital invested, $6.27 of revenue is generated (source: NVCA). Using these metrics, at a minimum, $840M in revenue could be generated in Georgia through the Invest Georgiaprogram.
- Job Creation: High growth companies play a key role in creating jobs in the state of Georgia.
- “Life Cycle” Ecosystem: This program will help to build a “Life Cycle” of funding pathways for Georgia companies from “friends and family” financings through “angel” financing up to venture capital financing and private equity financing.
- Matching Investments: The venture capital firms that will be selected by the fiduciary will be required to “match” a certain portion of the state allocation with private funds. This will increase the initial size of the fund at a minimum to $134m.
- Return Based: The Invest Georgia program is “return based” and all invested capital will be returned to the State along with a majority of the profits.
Why would Governor Deal NOT sign ( veto) House Bill 318?
We cannot imagine why he would not. However, we do know that certain firms located outside the state of Georgia, Advantage Capital Partners and Enhanced Capital (aka: CAPCOs), have attempted to pass and control competing legislation in years past. We also know that these firms have hired local lobbying representation.
It would be a shame to have a local lobbying firm or outside finance groups influence Georgia legislators to abolish a program that Georgia desperately needs.
Who helped support House Bill 318 during the 2013 General Assembly?
Metro-Atlanta Chamber of Commerce
Technology Association of Georgia
Georgia Chamber of Commerce
Savannah Area Chamber of Commerce
Valdosta Chamber of Commerce
Rome Chamber of Commerce
Gwinnett Chamber of Commerce
Columbus Chamber of Commerce
Macon Chamber of Commerce
Central Atlanta Progress
Atlanta Technology Angel Investors
Savannah Angel Investment Partners
Total Technology Ventures
Croft and Bender
Fulcrum Equity Partners
Morris, Manning Martin
Nelson Mullins, Riley Scarborough
Stay tuned for a “Call to Action”…!