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Georgia Angel Investor Tax Credit Renewed for 2014-2015

5 Apr

House Bill 318, passed on March 25 by the Georgia General Assembly during the 2013 Legislative Session, renewed the Georgia Angel Investor Tax Credit legislation that was initially passed in 2010. House Bill 318, if signed by the Governor, will renew the Georgia Angel Investor Tax Credit for two years,  2014 through 2015. 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 2010 legislation signed on June 4, 2010 that gives this credit from 2011-through 2013 (Section 2):

http://www.legis.ga.gov/Legislation/20092010/107440.pdf

Here is a link to the 2013 bill that was passed March 25, 2013 (Section 6) and would extend the credit in years 2014 & 2015:

http://www.legis.ga.gov/Legislation/20132014/135871.pdf

The Georgia Angel Investor Tax Credit took effect in 2011 and provides an individual state tax credit of up $50,000 on an annual basis for individual angel investors who invest in early stage, “qualified” Georgia companies. The Tax Credit is available to be used by investors and “qualified” companies in the years 2011, 2012 and 2013. In the first 18 months of 2011 & 2012, 96 companies applied for the tax credit. Based on information collected in 1st Q, 2013, it looks as if applications are up 30% YOY from 2011 to 2012.

Let’s encourage Governor Deal to support early stage investing in Georgia and urge him to sign House Bill 318!

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Additional Information on the Angel Investor Tax Credit:

Companies that meet the following criteria are eligible to become a “qualified” company:

– Technology or manufacturing

– employs 20 or fewer

– less than 3 years old

– no more that $500,000 in annual revenue

– has not raised more that $1,000,000 in aggregate

“Qualified” Company Application:

Here is a link to the GADOR site for a “Qualified” company to apply: (IE browser seems to work fine, Chrome not so much)

https://etax.dor.ga.gov/inctax/taxcredits/TSD_Qualified_Business_Registration_Form_ITQBR.pdf

Application for Angel Investors that invested in a “Qualified” company in 2011:

https://etax.dor.ga.gov/inctax/Form_IT-QI-AP_Qualified_Investor_Tax_Credit_Preapproval_Form_1.2.13%20v1.3.pdf

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.

Link to legislation: http://www.legis.ga.gov/legislation/en-US/Display/20132014/HB/318

A Quick History of the 2010 Georgia Angel Tax Credit

23 Jun

It’s been a while since I have posted on this blog, but I kept it alive for occasions such as this…

2006 An initial draft of a Georgia Angel Tax Credit bill is created. The bill is drafted by researching and reviewing active laws, in particular North Carolina and Virginia.

 2007 A tax credit bill is dropped in the Georgia House of representatives during the 2007 General Legislative Session by Representative Chuck Martin and becomes House Bill 435. It is a “stand alone” tax credit bill and is sent to the House Ways and Means Committee within the House of Representatives. It remains in the House Ways and Means committee for the remainder of the 2007 Legislative Session.

2008 The Georgia Angel Tax Credit bill remains on the books for the 2008 Legislative Session,  but the emphasis within the Atlanta community in 2008 is the Alternative Pension fund bill (SB 80 at the time, I believe). However, House Bill 1196 is quietly passed into law which gives a 25% tax credit only to limited partners within the Georgia Research Alliance Fund. The GRA fund is also seeded with taxpayer funds of between $7,000,000 and $10,000,000, I believe.

 2010 A “stand alone” bill is dropped in the House of Representatives during the 2010 Legislative Session by Representative Chuck Martin and becomes House Bill 1001. House Bill 1001 is a bill solely for the passage of a Georgia Angel Tax Credit . It is sent to the House Income Tax Subcommittee within the House of Representatives. Also during the Session, Angel Tax Credit language is added to House Bill 1023, sponsored by Representative Tom Graves.  Separately during the 2010 Legislative Session, House Bill 1219, sponsored by Representative David Knight, is introduced. House Bill 1219 is a “stand alone” bill that would eliminate the low income tax credit. Subsequently, House Bill 1023 is passed by the House and the Senate. House Bill 1001 remains in the House Income Tax Committee and does not pass out of the House of Representatives. During the last days of the 2010 Legislative Session, the Senate asks that the original Angel Tax Credit language be added to House Bill 1069. House Bill 1069, sponsored by House representative Joe Wilkinson is a tax credit bill related to energy and water appliances. Separately, the House asks that the language of House Bill 1219 be added to House Bill 1069 in order to pass the language before Sine Die. (The language of House Bill 1219 was not added to House Bill 1069 to offset the angel tax credits. Any suggestion or implication that this was done so is erroneous and false.) Additionally, other language regarding a municipal option sales tax is added to House Bill 1069 at the request of the City of Atlanta. House Bill 1023 is vetoed by the governor after the end of the Session. House Bill 1069 passes both the House and the Senate, is signed by Governor and becomes law on June 4, 2010.

Georgia has a long and successful history of angel investors and angel investments. From Imlay Investments to the Communications Group to the Atlanta Technology Angels—angels have been active in the state of Georgia for two decades. I would encourage the communities of Georgia to focus on helping make the angel investors, and the Georgia companies they help fund, successful.

Some Supporters of the Georgia Angel Tax Credit (Section 2 of HB 1069)

Senate Majority Leader Chip Rogers and Lieutenant Governor Casey Cagle

Karen Handel

Georgia Chamber of Commerce

Metro (Atlanta) Chamber of Commerce

Gwinnett Chamber of Commerce

Georgia Public Policy Foundation

Georgia Game Developers Association

Georgia Economic Developers Association

Technology Association of Georgia

TechAmerica

The National Federation of Independent Business

…and hundreds, if not thousands, of entrepreneurs and local investors that took time to send their support to the state government during the legislative session.

Thank you!

.

.

GA Angel Investor Tax Credit Bill Update

25 Mar

The people have spoken. Your voices were heard. Many thanks to the many of you who wrote to legislators in support of this.

We’re very pleased to share with you that today our bill, HB 1001 The Angel Investor Tax Credit Bill, was submitted to House Rules Committee. This House Committee conducts a final vetting of the bill and determines if the bill will make it to the floor of the House of Representatives in time for a full House vote before Crossover Day (the day approved bills leave the House and go to the Senate).

However,  we have only two General Session days to accomplish getting the bill to the House Floor. It is doable, but we once again need your help to achieve this.

The Rules Committee will meet today (Thursday, March 25) starting at 2:00 PM  during which time our bill can be heard. We need for you to send the same notes you sent over the weekend, but now to key members of the House Rules Committee and also most certainly to those members of this Committee who represent your respective towns/cities or those near you. A voice mail works just as well. And leveraging personal relationships is best. We also ask that those of you are leaders of organizations and groups throughout the State please forward this information to your constituents.

Three of the Key Members of the House Rules Committee were on the list from this past weekend. If you haven’t yet written them please do so. These are:

House Rules Committee Chairman: Bill Hembree-Winston/Douglas

bill.hembree@house.ga.gov

hembrew@nationwide.com

404.656.5141 (Capitol)

770.942.1656 (Cell)

Jan Jones-Alpharetta

janjones38@bellsouth.net

jan.jones@house.ga.gov

404.656.5072 Capitol)

Jerry Keen-St. Simons

jerry.keen@house.ga.gov

404.656.5052 (Capitol)

912.634.3773 (District Office)

If any of the following represent your respective district/town/city we ask that you contact these as well and ensure that you note that you live in the district/town they represent:

Mark Burkhalter-Johns Creek

mark.burkhalter@house.ga.gov

404.656.5058 (Capitol)

770.418.9098 (District Office)

Howard Mosby-Atlanta

Howard.mosby@house.ga.gov

404.656.0287 (Capitol)

Fran Millar-Dunwoody

franmillar@wellsfargo.com

404.656.0254 (Capitol)

404.487.7329 (District Office)

Judy Manning-Marietta

judy.manning@house.ga.gov

404.656.7868 (Capitol)

Tom Rice-Norcross

tom.rice@house.ga.gov

404.656.5912 (Capitol)

Ron Stephen-Savannah

quickrxdrugs@yahoo.com

404.656.5099 (Capitol)

912.966.5665 (District Office)

Butch Parrish-Statesboro

butch.parrish@house.ga.gov

404.463.2247 (Capitol)

Earl Earhart-Marietta

earl@ehrhart.4emm.com

404.463.2247

Wendell Willard-Sandy Springs

wendell.willard@house.ga.gov

404.656.5125 (Capitol)

770.481.7100 (Office)

David Casas-Lilburn

david.casas@house.ga.gov

404.656.0254 (Capitol)

770.931.8033 (District Office)

Jill Chambers-Atlanta/DeKalb

jill.chambers@house.ga.gov

404.656.3949 (Capitol)

Mike Coan-Lawrenceville

repcoan@charter.net

404.656.3949 (Capitol)

For those of who have not written or called, key talking/writing points are:

-I’m (one of the voters/constituents in your district) calling/writing to voice my support for House Bill 1001, The Angel Investor Tax Credit Bill. Georgia needs his economic development tool TODAY.

-Many promising start-up companies in Georgia, most of which have been created by graduates of Georgia colleges and universities, are at risk in today’s challenging financial environment.

-The primary sources of capital for these businesses are angel investors: private individuals who take personal financial risk to enhance business and job creation in our state

-HB 1001 will incentivize angel investors to further engage to help these promising young companies get started, create jobs in our state, stay in our state and stimulate economic development

-22 other states have been utilizing these incentives for years and those states have benefitted from new business creation, new jobs and new revenue

-HB 1001 will make Georgia competitive with 22 other leading edge states, including North Carolina

-Add personal comments 

-I encourage you to support HB 1001

Thank for your time to discuss/read this.

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As noted above, time is of the essence here. Hopefully you can get your correspondence before you leave work today or sometime tonight. 

Many Thanks again for your help, as we will all benefit from passage of this bill.  We’ll keep you apprised of developments.

Moving On from ATA…

9 Sep

September 9, 2009

Friends–

After seven active and busy years as the Managing Director of the Atlanta Technology Angels, I am stepping down from that position at ATA to become the Managing Partner of a family partnership, Keith-Massey Family Partnership, LLLP. Day to day operations of ATA have, as of this week, been taken over by Gordon Rogers, an active member and investor within the Atlanta Technology Angels group. However, my commitment to local, regional and national angel investing will stay strong as I will remain a member of ATA, will remain on the ATA Board of Directors and will remain on the BOD of the Angel Capital Association.

I am indebted to many folks, among them Sig Mosley, Melanie Leeth, Bill Henagan, Dan Pompilio, Meade Sutterfield, Steve Chaddick, Mike Dickerson, Mike Eckert, Clark Gilder and many, many others, all of whom helped patiently teach me the finer points of investing in young technology companies and working with other investors.

I am most proud of the 25 companies that the Atlanta Technology Angels investment group help found or fund during my watch over these seven years. Those include:  

Aretta                                                  OpenSpan

Asankya                                             Oversight Tech

AeroVectrex                                    Pramana

Beacon                                               Preparis

CentraFuse                                       Qcept        

Calorie and Pulse                           Sentrinsic

Elf ISland                                           SoloHealth

Fortel DTV                                         SimpleC

Global Crypto                                   TerraGo

GLobal Standard Financial         Websingularity

Invirtus                                               Zeewise

Invistics                                             Jacket Micro Devices

Link2Cell                                           

What did I learn?

– Relationships, above all, are the most important aspect of this type of investing. Good relationships last much longer than any investment. 

–  This type of investing is hard work. Writing a check is only the first step. 

 – Business cycles count.

– Believe in what you do. If you do, success will find you. 

–  Simplify your priorities and then focus on what is most important. 

 – Patience, patience, patience. 

– Life goes on.

My contact information will stay the same. I look forward to seeing you soon.

Georgia House Bill 1196-A wise use of taxpayer money?

11 Mar

 House Bill 1196 is an amendment to the Georgia Tax Code.

In specific, it is an amendment to Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated.

 This amendment would give investors who invest in the GRA Seed Capital fund a 25% state income tax credit. In other words, you can only get the 25% state income tax credit IF you invest in the GRA Seed Capital Fund.

No one else in the state of Georgia would qualify for this 25% credit UNLESS you are a limited partner (investor) in the GRA Seed Capital Fund.

I have previously posted about the 2008 Georgia Research Alliance Seed Fund. If you read the previous post, you’ll understand that I strongly support the new GRA Seed Fund.

Why does this particular bill bother me?

21 other states have some form of tax credit for early stage investors in their respective state. None have restictions similar to House Bill 1196. In fact, most of the states that have investment tax credits encourage individual investors to take advantage of the local tax credits. House Bill 1196 will restrict the Georgia tax credit to a few select investors.

 – House Bill 435, the “Angel Investor Tax Credit Program”, was introduced in 2007 in the House. Here’s a story that ran on February 23, 2007 in the Atlanta Business Chronicle on House Bill 435. House Bill 435 gives ALL qualified investors in the State of Georgia a 100% tax credit for investing in early stage companies. House Bill 435 is intended to encourage entrepreneurship and economic development in the State of Georgia. House Bill 1196 is exclusive of other early stage investors in Georgia that have, for decades, been investing in companies formed by university intellectual property. Why should a subset of  investors now get special treatment?

– This fund is funded by state money–$10,000,000 of taxpayer money to start the fund which then has to be matched by up to $30,000,000 of private money. As a taxpayer of the State of Georgia, I’m now a limited partner of this fund. Now, I have to do my due diligence.

 

Why Isn’t There A Network or Hub Connecting Venture Capitalists/Angels With Startups?

19 Feb

I didn’t write it, just repeating it….

Atlanta VC and Angel Mashup

17 Jan

Here is a quick rundown of the various VC funds and angel groups in the Atlanta area. I started this list back in January, 2008 and update it periodically. If you are seeking capital, make sure to research the below listed groups and/or funds to make sure their investment criteria matches what you are trying to accomplish! If you have any questions, send me an email at: knox.massey at angelatlanta.com

The comments below are my opinions only.

Georgia Venture Funds

Georgia Research Alliance Venture Capital Fund

Brand New. A state funded entity. Georgia legislature has allocated $7.5M (not $10M as has been reported) in state funds for the GRA seed fund. Matching private funds are required. So, a minimum of a $15M fund. Only intellectual property coming out of the GA university systems can be funded. Money from the state flows to the fund in the 2009 fiscal year which is July 1, 2008. No idea yet who is going to run the fund. Additional investment criteria TBD.

Tech Operators

Brand new. Privately funded. In the range of $10M-$12M. Local technology entreprenurs are LP’s. GP’s are former CEO’s. First closing of the fund is expected in August or September, 2008 First funding will likely happen this in the fall of 2008. Located in the hear of Georgia tech campus.

Profounder

Brand new. Small seed investment fund. Funded by a Boston VC and some local investors. Y-combinator model. No GP has been named that I am aware of. First close might happen this summer. Probably will start funding in Fall, 2008 timeframe (my guess).

Noro-Moseley

Granddaddy of the funds in town. Been around since 1983. Make sure you spell it right. Have had some nice exits recently.  Just raised fund V. Alan Taetle and Alan Moseley are the face of the fund for the next generation folk in town. Both are accessible and communicative. Hint: Have something of substance when you go to them and the conversation will flow easily.

Arcapita

The New Money in town. Middle East based. A new hybrid with the requirement of  sharia  for each venture investment. Growth or late stage, so us early stage folk don’t see as much of John Huntz, Ramsay Battin or Tom Hawkins like we used to. Local influencers Wayne Hodges and Tom Noonan are on the Advisory Board.

Fulcrum Ventures

Headed by Jeff Muir of the Chatham Funds and Frank Dalton, former GP at Cordova. Opportunistic equity and debt investors. Good people and accessible.

Alliance Technology Ventures

Founded in 1994. Fading into the sunset. No longer active and winding down fund.

Total Technology Ventures

Gardiner Garrard and Tom Smith. Both smart, capable and accessible. This is THE fund to go to in Atlanta if you have a good financial services opportunity. Need to have a management team in place, have revenue and customers. TTV has extensive financial service resources and connections. Just raised Fund II.

Steve Nussrallah/Value Plus Ventures

Steve, formerly of Noro-Moseley, has started a small fund to help capitalize local and regional companies he and his partners decide to work with. Value Plus will put a small amount of capital into companies (with very “investor friendly” terms) that seem to already have revenue and management on board. Steve and his partners will then spend 3-12 months with each company on a deferred salary basis to prep the company for venture funding.

Veritas Venture Partners

Laurie Olivier is the partner in Atlanta. The fund has done a handful or investments in the Atlanta area. Laurie is a good person and accessible.

The Seraph Group

Small VC fund that has morphed from angel status to fund status. The fund GP’s are individual investors and/or advisors. Tuff Yen heads is the founder although Stephen Fleming has a strong influence within the fund. Has done 2 Atlanta investments. Seems to be focusing on West coast based opportunities.

 Angel  Investment Groups

Atlanta Technology Angels

My favorite.

Imlay Investments

Sig and Melanie are universally known and admired in the early stage Atlanta technology scene. Have had some huge hits (TradeX, ISS) and more are coming.

 Charlie Paparelli

Charlie has been a local angel investor since the mid 1990’s.  He prefers service based companies with recurring revenue and experienced managers.

Charlie is now very involved with the monthly Adams Capital/Angel Lounge lunches. These lunches are sponsored by Adams Capital and are held at local private club and are invitation only. The lunches are meant to introduce active angels, “interested” angels and local economic development people to each other to help further stimulate the private seed and early stage investment community. I don’t believe that active investing is yet done at these lunches.

Charlie has also been involved in High Tech Ministries for a number of years.

 ATDC Seed Fund

Completely different from the new GRA fund. Also state funded. Dates from late 1990’s.  Run by Charles Ross within ATDC. $3 to $1 match provision ($3 private capital to each $1 state funds) for any investment. 

Georgia Tech Edison Fund

The Charles A. Edison Fund based in New Jersey is one of three initial investors. The “Edison” brand name was catchy and apt, so it was kept. A 501(c)3 designated fund. Donations will flow through GATV which itself is a tax exempt affiliate of Georgia Tech. Stephen Fleming, head of Venturelab and, more formally, the head of commecrcialization at ATDC, will manage the fund. Georgia Tech alumnus Edward Allman, who is on the BOD of the Edison Fund, played a big part in helping to establish this at Georgia Tech. The GTEF is just now receiving local funding and has made one small investment that I am aware of.

NBAI

An early Atlanta-based investor group. NBAI stands for “Network of Business Angels and Investors”. Run by Karen Rands. Investment criteria is very broad. Will look at local and regional opportunities.

Communications Group

Martin Tilson at Burr Forman, LLP chairs the Communications Group, an early Atlanta investor organization. This group meets once a month for dinner and drinks at a local private club. 2-3 companies present to the members of the group. Has been meeting regularly since 1996. Primarily a social network.

Grants

SBIR in Atlanta

Georgia Research Alliance

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