The Future of Private Investing in Georgia: Fitting All the Pieces Together

Last week, on March 31st, I was honored to chair my first ad hoc committee meeting of the Georgia House of Representatives, where I have served since 2011. As a member of the minority party, you can imagine how many times I get the opportunity to chair a meeting but this is a space where I am not only comfortable, but possess a particular expertise in this subject matter: private capital. This is what I do....help companies with the legal compliance and agreements needed for successful capital raises and keep the S.E.C. and state governments off their back.

This ad hoc committee came out of an idea I had the last few days of the 2016 Georgia legislative session in which I saw the need to have a series of public hearings to discuss private investing in Georgia and how to make it easier to invest in Georgia. My first thoughts were just to update the existing Georgia securities code, which have not been updated since 2008 since there are various federal laws and regulations that have been passed in recent months. But then  I decided that since I am going to open the Georgia securities code, I may as well take testimony and hear some innovative ways to move private capital into Georgia (and away from neighboring states but shhhh...don't tell them I said that.) You see...it all works together...the securities code...the regulations from the Securities and Exchange Commission...rules and regulations from the GA Secretary of State..the state budget. Everything works together and we didn't need any missing pieces to this puzzle of encouraging capital investments in Georgia. So I wanted to make sure that didn't happen....and I'm on a one woman mission to make sure that doesn't happen as you can see from my upcoming speaking schedule.

Being the stubborn lawyer-legislator that I am, I decided to approach the Chair of the Small Business Development and Job Creation committee Chairman Bubber Epps where I serve as the ranking Democrat on that committee. I also approached the Chair of the Economic Development & Tourism committee Chairman Ron Stephens. These seemed like the most logical committees to ask to go down this complex road of capital investments in Georgia and luckily, they both agreed that it was a good idea and agreed to let me chair the meeting since this is the type of work I do for my "day job". So an ad hoc committee was appointed from these two committees that included the brightest minds in the Georgia House: Reps. Stacey Evans, Buzz Brockway, Steve Tarvin, Al Williams, myself, and Chairmen Ron Stephens and Bubber Epps.

The Gwinnett Chamber of Commerce hosted the first public hearing of this ad hoc committee. I choose the Gwinnett Chamber because I not only represent South Gwinnett but the Gwinnett Chamber has been an innovative organization committed to developing the whole entrepreneur (see flyer to left). I'm happy they were able to partner with us for this important topic.

And so we met last week at the beautiful building in Duluth that houses the Gwinnett Chamber of Commerce and the public hearing lasted about 1.5 hours as we discussed everything from intrastate crowdfunding, updating the Georgia securities code, investments through the university system, etc. The room was filled with those that were interested in private capital, those that had invested their own private capital into businesses, those seeking private capital and those that regulate (the Secretary of State's Securities Division) and legislative private capital (members of the committee).

 The Gwinnett Post wrote a brief overview of the hearing in this article that was posted a day later. Below are some specific highlights/bullet points from the hearing and you can also view the YouTube video I uploaded to my YouTube channel (feel free to subscribe to my channel.)

• From Noula Zaharis, the Secretary of State's Securities Division: Georgia has some of the most "reasonable" fees in the nation, has one of the simplest processes for intrastate crowdfunding (a 2 page form), and in October of 2015, raised the Invest Georgia Exemption from $1MM to $5MM.
• From Dan King, Member of Gwinnett Tech Angels, an affiliate of Atlanta Tech Angels: One possible reason why only 2% of the angel investor tax credit is being used is because of the number of companies that qualify and take advantage of the tax credit for its investors, for example a $1MM raise is the cap for company qualification; the average deal for a company depends on many factors but can range anywhere between $1-$1.5MM (in response to my question about the Invest Georgia Fund which is scheduled to be allocated $100M up to FY 2018 but currently only has $10MM in funding)
• From Heather Maxfield with Technology Association of Georgia: The SBIR Program (Congressional Fund) is matched in other states and Georgia should seriously consider doing the same.
• From Delray Wannemacher of First Look Equities: His company is looking for qualifies companies; portals are required for federal crowdfunding but not for IGE. 

If you are interested in this subject matter and want to be on the list for our next public hearing, please email me at [email protected], SUBJECT: Private Investing in Georgia. Stay tuned as we come up with GREAT opportunities to invest in Georgia!

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I am Dar'shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practice, helping businesses raise capital the LEGAL way. We work with "for profit" companies seeking to raise $250,000 or more through private securities (equity and/or debt) that have a line item budgeted for legal services. We do NOT find investors or introduce companies to investors; that is the job of "broker-dealers" and we are prohibited under federal securities law from doing so.  I have 2 B.A.s from Oglethorpe University, a law degree from the University of Georgia and an M.B.A. from Kennesaw State University. View past and upcoming speaking engagements and request me to speak to your organization. 

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