Category Archives: private equity

Economic Justice: What Can We Do for OUR Communities?

Loaded question right? Many of you may have read my first blog on this issue in August when my legislative office and my non-profit hosted an event on “Economic Justice: How To Use Our Dollars to Make Sense”. The issue was the almost $2 Trillion, with a “T”, in spending power in the black community and how to leverage that power to accelerate social justice. It’s my theory that leveraging the universal language of money can speed up social justice reform towards minorities in this country—all we have to do is come up with a plan and stick together to make it happen!

We had a lively discussion with panelists about the issues facing the black community with respect to economic parity and what preliminary steps we can take individually and as a community to address those issues. Over 60 individuals came to hear from the panel and there was a united conclusion to continue the conversation. We had a diversity of opinions, backgrounds, professional careers and visions for how to accomplish this enormous task. My non-profit, Minority Access to Capital, Inc., is committed to answering that call on the business side and I am committed as a policy maker to address those issues from a community and policy standpoint. Together we CAN and we WILL insight and inspire change but we need your help. Can we count on it?

If your answer is “Yes”, that time has arrived! I am pleased to announce that my office and non-profit are answering the call for ACTION ITEMS and a PLAN for how we can tackle the issue of economic justice in our communities. See below and join me at either or both events! *I will not be at the event on Nov. 17th as I have a conflicting event related to my legislative duties that will take me out of town.

AND……

On behalf of the Board of Directors of Minority Access to Capital, Inc., I hope to see some of you soon!

**************************************************************************I am Dar’shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practicehelping businesses raise capital the LEGAL way. We work with “for profit” companies seeking to raise $250,000 or more through private capital (including crowdfunding) 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. I have been elected to the Georgia House of Representatives (East DeKalb/South Gwinnett) since 2011 and I serve on the committees of Juvenile Justice, Interstate Cooperation, Judiciary Non-Civil and as the ranking Democrat on the Small Business and Job Creation Committee.

You may be interested in my non-profit organization as well to EDUCATE and EMPOWER minorities called Minority Access to Capital, Inc. Please visit our website to learn about events and sign up for our enewsletter.

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our 1 hour consultation.

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Filed under non-profit, policy, private debt, private equity

How new and amended S.E.C. rules can that affect YOUR capital raising in Georgia?

The Securities and Exchange Commission (S.E.C.) did it! After months of reading articles about proposals and submitting my own public comments, the S.E.C. finally has adopted what I think are epic changes to Rules 147 and Rule 504. (See S.E.C. press release) Both of these changes are meant to provide more access to capital for entrepreneurs under the 2012 JOBS Act and the SEC’s Regulation CF.

The updates to Rule 147 will continue to be a safe harbour under Section 3(a)(11) of the Securities Act so that issuers that engage in securities offerings through intrastate offerings (“within a state only”) in reliance on state law exemptions will be protected. The new Rule 147A is similar to Rule 147 BUT….BUT it will allow offers to be accessible to out-of-state residents and for companies to be incorporated or organized out-of-state. THIS IS HUGE—no longer will issuing companies only be able able to raise money within the state they are incorporated if they are using an intrastate offering exemption.

DISCLAIMER (like any good attorney): The information contained below is a brief summary of the rules. As always, please consult a knowledgeable securities attorney before attempting any capital raising or dealing with investors. They will be able to provide you with more details about the rules. You are responsible for your own due diligence in this matter and this blog cannot be relied upon as specific legal advice.

Rule 147 Changes: No longer bound by borders!

New Rule 147A and updates to Rule 147 are meant to modernize the existing intrastate offering framework that permits companies to raise money from investors within their state without having to register and report on the federal level. As many of you know, Georgia was one of the first of 33 current states to adopt intrastate offerings which is called the Invest Georgia Exemption or “IGE”. (See blog and see rules) IGE has been successful in providing over 38 companies the opportunity to raise money from investors that reside inside of the state of Georgia, GroundFloor being one of the most famous examples.

Here are HIGHLIGHTS of the New Rule 147A and the updates to Rule 147:

  • The issuer must have its “principal place of business” in-state and satisfy at least one “doing business” requirement that would demonstrate the in-state nature of its business;
  • A new “reasonable belief” standard for issuers to rely on when determining the residence of a securities purchaser at the time of sale;
  • A requirement that issuers obtain a written representation from each purchaser regarding residency;
  • A limit on resales to persons residing within the state or territory of the offering for a period of six months from the date of the sale by the issuer to the purchaser;
  • An integration safe harbor that includes prior offers or sales of securities by the issuer made under another provision, as well as certain subsequent offers or sales of securities by the issuer occurring after the completion of the offering; and
  • Legend requirements to offerees and purchasers about the limits on resales.

In essence, what the new updates to rule 147 and new Rule 147A mean is that Georgia will be able to expand its existing intrastate offering program so that companies can raise capital from investor OUTSIDE of the State of Georgia! This is a step in the right direction towards expanding access to capital in a highly competitive fundraising market. Many times companies do not use intrastate offerings because of the limitation of investors to within a certain state—-especially when most investors officially reside in California, New York or Boston. This will open up more options for issuing companies to raise funds but also better competition amongst the states that do offer intrastate offerings. Note that the Georgia Secretary of State’s office will have to update the rules in order to take advantage of the S.E.C. rules but is a less onerous process than a legislative update (believe me…I know!)

Amendments to Rule 504 (which in effect repeal Rule 505): Say goodbye to $1MM.

The S.E.C. has 3 rules under Regulation D that exempts companies from S.E.C. registration: Rules 504, 505 and 506. Rule 504 exempts companies from registering with the S.E.C. for offers and sales of up to $1MM in a 12 month period (with some additional exemptions—see my disclaimer above). The change to Rule 504 raises the amount of capital that can be raised from $1MM to $5MM. The main distinction between a Rule 504 exemption and Rule 505 exemption was the amount of capital that could be raised. Under Rule 505, there were similar requirements under Rule 504 but a company could raise up to $5MM. Since the S.E.C. allows raising under Rule 504 up to to the same level and Rule 505, Rule 505 is unnecessary and useless and therefore is being repealed.

Other Information to Note:

I know that you are as EXCITED as I am about these new and updated rule changes—but remember that there is a “holding period” by which S.E.C. rules must be published in the Federal Register before the rules become effective so that the public has adequate notice. Updates to Rule 147 and new rule 147A will become effective 150 days after publication in the Federal Register and updates to Rule 504 will become effective 60 days after publication. Rule 505 will be repealed and become effective 180 days after publication in the Federal Register.

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I am Dar’shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practicehelping businesses raise capital the LEGAL way. We work with “for profit” companies seeking to raise $250,000 or more through private capital (including crowdfunding) 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. I have been elected to the Georgia House of Representatives (East DeKalb/South Gwinnett) since 2011 and I serve on the committees of Juvenile Justice, Interstate Cooperation, Judiciary Non-Civil and as the ranking Democrat on the Small Business and Job Creation Committee.

You may be interested in my non-profit organization as well to EDUCATE and EMPOWER minorities called Minority Access to Capital, Inc. Please visit our website to learn about events and sign up for our enewsletter.

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our 1 hour consultation.

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Economic Justice: How to Use Our Dollars to Make Change (Sept. 8th, join us)

It’s been a little while since I wrote a blog post. Last time I wrote one, I was chairing an ad hoc committee made up of my collegues from the Georgia House of Representatives—House members from both the Economic Development committee and Small Business and Job Creation committee where I serve as the ranking Democrat. The purpose of the committee

was to hold hearings in metro Atlanta to discuss ways to improve our investment environment in Georgia to make it easier for investors, individuals and institutional, to invest in Georgia based businesses and for businesses to receive private investment funds. (Report from Private Investment Policy Focus Group, June 2016)

Now I want to turn to a more specific topic—economic justice for minorities, particularly African Americans. You see, I happen to be a African American woman that works in the capital markets industry, practicing securities law (which is a fancy word for “I help companies that want to raise millions of dollars to start or grow their business). I have seen where the almost $1.2 Trillion in private capital funds over the last 10 years has went—and you’ll be shocked to know 95% of it did NOT go to minority owned companies. As a matter of fact, minority firms are lagging behind in a few areas due to capital disparities. (Source)

It has been reported that black spending power for 2016 will reach $1.2 Trillion and reach $1.4 Trillion by 2020, a 275% INCREASE from black spending power since 1990. (Source) But here is the question:  What are we going to do with all this black spending “power” if we don’t use it? Just look at the number of U.S. minority owned firms and the economic contributions we have made to this nation.

Over the past few years, most of the politicians, speaking heads and activists have focused on social justice given the unarmed black man shootings that have occurred throughout the country. And rightly so! But I implore and ask anyone reading this post to stop and consider my theory: I believe that 1) We cannot talk about social justice without talking about economic justice at the same time and 2) the path to social justice, I believe, will come faster and smoother if we focus on economic justice issues. No one has to agree with me—I am just telling you my thoughts. And the reason for my theory is something that I have learned over the 8 years I have been practicing corporate law, meeting with those who have millionaire dollar net worths or access to millions, attending events where capital is being distributed, patronizing black businesses and talking with blacks with high net worths and disposable income and serving almost 7 years as a member of the Georgia legislature: Money is the universal language of mankind. A black man’s currency has the same worth as a white man’s. So if we are to catch the attention of those that are violating our social and civil rights—-speak with the almighty dollar and watch who listens, how fast they listen and the call for change. Again, my theory. No one has to agree.

That being said, let’s start to have the discussion around how to empower and support black businesses, how to communicate information among our community without fear of some other person of color of getting ahead of us and learn how to create generational wealth to leave to our children and families. I invite you all to participate in this discussion with me at Emory on Sept. 8th along with a dynamic moderator and great group of panelists (We will even have a reception before hand for networking.)

See panelist bios

RSVP HERE (Limited spaces!)

I hope you can join me for a GREAT discussion.

*******************************************************************************************

I am Dar’shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practicehelping businesses raise capital the LEGAL way. We work with “for profit” companies seeking to raise $250,000 or more through private capital (including crowdfunding) 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. I have been elected to the Georgia House of Representatives (East DeKalb/South Gwinnett) since 2011 and I serve on Juvenile Justice, Judiciary Non-Civil and as the ranking Democrat on the Small Business and Job Creation Committee.

You may be interested in my non-profit organization as well to EDUCATE and EMPOWER minorities:

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our 1 hour consultation.

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Investment Policy in Georgia: Hear what these industry leaders think.

On June 28th, I held my public meeting under the Gold Dome with a focus group on investment policy in Georgia. We had a number of leaders in the industry come and speak about a variety of capital formation and generation issues. Take a look at the powerpoint presentation below complete with links and documents for your review.

A special shout out to those that presented and were on the panel:

  • Charlie Jarrett and Noula Zaharis (Georgia Secretary of State’s office, Securities Division)
  • Tino Mantella  (President of the Technology Association of Georgia)
  • State of Atlanta StartUp Ecosystem Report , Adam Harrell (Executive Director of StartUp Atlanta)
  • Association for Corporate Growth,  Melanie Brandt (Executive Director of ACG Atlanta, Inc.)
  • Allyson Eman (Executive Director with Venture Atlanta)

Barry Etra, Chair

RAISE Forum

  • Barry Etra worked in Sales and Marketing, Operations, and General Management for manufacturing organizations in the Northeast. In 2014 he founded the RAISE Forum in partnership with Emory; they help early-stage companies in the Southeast get senior funding from the Southeast, which helps keep companies here. He has a BA and an MBA from Columbia University.

Dharma Jackson

Leaf Life Learning

  • Dharma “DVL” Jackson is born and raised in metro Atlanta, GA. She has earned her degree in Criminal Justice Georgia Perimeter College. Ms. Jackson is also a Grammy member recording artist in the local Atlanta Chapter and has over 16 years in the film and music entertainment industry.

Terrance Ashanta-Barker

QuarryFish Venture Partners

  • Terrance Ashanta-Barker is Co-Founder and Managing Director of QuarryFish Venture Partners, LLC (“QuarryFish”). Mr. Ashanta-Barker is responsible for all of the firm’s operational activities related to the execution and management of its investments in its current and growing portfolio of companies. Ashanta-Barker co-founded a corporate law boutique, the Ashanta-Barker & Johnson Law Group, LLC.

 

Dan King 

Atlanta Technology Angels

  • Dan King is an attorney who has practiced law since 1980, most of it as a partner in the Atlanta and NY offices of King & Spalding. He is active in the Atlanta angel investor community, as the organizer of the Gwinnett Angels and in serving on the board of the Atlanta Technology Angels. He has made direct investments in over 10 start-up ventures.

Erik Nelson

Mountain Share Transfer

  • Nelson has been active in the securities industry for 27 years, starting out as a stock broker following graduation from college in 1989.  In 1995, he launched Coral Capital Partners, Inc., an advisory services firm that provides services to participants in the capital markets. In late 2012, he acquired Mountain Share Transfer, whose clients range from small private companies to NASDAQ listed firms

 

Dana Clare Redden

Solar Concierge

  • Dana Clare Redden is the CEO of Solar Concierge, which she started in 2012 with the goal of educating and marketing to the now cost-competitive solar energy market. After seeing the light while helping people utilize solar energy in San Diego, Riverside, and Orange County, California in 2009, she sought to bring solar to the Southeast with a business model that would empower the client through knowledge, industry connections, and multiple funding sources. Dana is currently on the Board of Directors for the Georgia Solar Energy Association, where she serves as Education Committee chair, is a LEED Accredited Professional, and is a member of the Buckhead Rotary Club.

NOTE: If you are interested in being on my email list for events and other initiatives in the space of private investments, please email me at dkendrick@kendrickforgeorgia.com, Subject: Private Investment Project.

***************************************************************************

I am Dar’shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practicehelping businesses raise capital the LEGAL way. We work with “for profit” companies seeking to raise $250,000 or more through private capital (including crowdfunding) 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. I have been elected to the Georgia House of Representatives (East DeKalb/South Gwinnett) since 2011 and I serve on Juvenile Justice, Judiciary Non-Civil and as the ranking Democrat on the Small Business and Job Creation Committee.

You may be interested in my non-profit organization as well to EDUCATE and EMPOWER minorities:

General Meeting Notification

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our 1 hour consultation.

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May 16th, 2016 It Begins: Federal Crowdfunding Rules Change the Capital Formation Conversation

In many ways this blog is a recap of previous blog I wrote on the new federal crowdfunding rules (also known as “regulation crowdfunding”) that will become effective on May 16th of this year. (I am so excited that I am counting down on my social media posts!) But before I go further, I would not be a good lawyer unless I gave a disclaimer or two so here it goes. Disclaimer: We are NOT responsible for your reliance on this blog. Please review the full rules and related material before you raise capital via crowdfunding or otherwise. (Sources: 1- The full S.E.C. press release. 2- The final crowdfunding rules in their entirety.)

Alright, now that that is done, let’s continue. To understand why I am so excited you have to realize the process and length of time it took to get to this place on May 16th. The JOBS Act was passed and signed into law in April of 2012 with the requirement that rules be promulgated by the Securities & Exchange Commission (“S.E.C.”) in the 6 months after the bill was passed. The S.E.C. didn’t finalize the rules until October 30th, 2015, over 3 years AFTER the law mandated the rules be finalized.  I can only predict the hundreds of thousands of businesses have been waiting for these rules to be finalized and then become effective (Fun fact: Once S.E.C. rules are finalized and published in the Federal Register, they take 6 months to become effective.)

In fact, many states, like Georgia, grew tired of waiting on the finalized rules and therefore came up with their own intrastate crowdfunding exemptions likeGeorgia’s Invest Georgia Exemption or “IGE”. However, there are limitations to intrastate crowdfunding such as only being able to sell to resident investors within each respective state and most states have a raise cap of $1MM-$5MM. (See comparison chart)

So these final federal rules are important to expand the pool of investors throughout the United States by which companies can raise capital. The federal crowdfunding rules now permit individuals to invest in equity based crowdfunding subject to certain investment limits based on income or net worth.

Before you through up a RED FLAG for the potential for investor fraud, it’s notables that the rules also do the following to protect the investing public (so this is not a “free for all” regulation):

  1.  Limit the amount of money a company can raise using the crowdfunding exemption;
  2. Impose disclosure requirements on issuers for certain information;
  3. Create a regulatory framework for broker-dealers and;
  4. Limit the amount of money an investor can invest based on income or their networth; and
  5. Dictate the manner and mode of funding portals for facilitation.

Now I am about to give you a GENERAL overview of equity based federal crowdfunding. Please remember my lawyer disclaimer I gave at the beginning of this blog; there are many, many details that you will need to consult knowledgeable counsel about before starting a campaign fundraising campaign under these new rules.

TOPIC I: GENERAL OVERVIEW OF RULES

Generally speaking, the federal crowdfunding rules:

  1. Permit a company to raise a max. of $1M in 12 months;
  2. Permit individual investors to invest a certain amount based on annual income OR networth;
  3. Permit during a 12 month period, the max sold to any individual investor may not exceed $100k; and
  4. Permit an issuing company to raise money through general solicitation that must be conducted through a crowdfunding portal registered with the S.E.C.

(Source: Visit our slideshare account for a more detailed explanation.)

TOPIC II: INELIGIBLE COMPANIES

Certain companies would not be eligible to use the exemption under the Rules. This includes non-U.S. companies, Exchange Act reporting companies,certain investment companies, companies that have failed to report during 2 years prior and companies with no specific business plan. (Disclaimer: Review the full rules for more detailed explanations.)

TOPIC III: RESTRICTION ON RESALE

There is still a restriction on sale for one year.

TOPIC IV: INTERMEDIARY NEEDED TO RAISE FUNDS

In addition, all transactions relying on the new rules would need an intermediary. The intermediary could be a broker-dealer or funding portal. The funding portal would have to register with the S.E.C. and the funding portal would also need to be a member of FINRA (Financial Industry Regulatory Authority).

A company would be required to only use 1 platform at a time. There are responsibilities on the funding portal as well.

TOPIC V: DISCLOSURE BY COMPANIES

Companies would need to file certain info with the S.E.C. and companies would also need to provide the following info to investors:

  1. The price of to the public of the securities or method;
  2. A discussion of the company’s financial condition;
  3. Financial statements of the company with review or audit or tax returns;
  4. A description of the business and the use of proceeds; and
  5. Certain related-party transactions.

If you have a comprehensive business plan, this information would be covered.

DISCLAIMERS & OTHER INFO

  • To view the full S.E.C. press release on this topic: View here.
  • To view the full final rules in their entirety: View here.
  • Please contact us for a services consultation to see how we can help you with your crowdfunding campaign.

 

Hopefully this blog has given you a general overview of what to expect from issuing companies on or after May 16th when the rules become effective and crowdfunding portals can actually start helping companies raise money under these new rules. The final rules are several hundred pages long so—-always seek knowledgeable legal counsel to help you navigate the details.

OR, if you are reading this blog before May 5th, join me for an event and learn even more about intrastate crowdfunding and federal regulation crowdfunding:

Sign up HERE and join me! Happy Crowdfunding!

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I am Dar’shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practicehelping businesses raise capital the LEGAL way. We work with “for profit” companies seeking to raise $250,000 or more through private capital (including crowdfunding) 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.

NEW SERVICE OFFERING: Legal Opinions! You have an issue, we have an answer. For more information, click HERE for a sample legal opinion memo.

You may be interested in my non-profit organization as well to EDUCATE and EMPOWER minorities: (Connect with us on Meet Up for upcoming meetings)

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our 1 hour consultation.

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IGE (Invest Georgia Exemption): How Georgia is leading the crowd in crowdfunding

I’ll admit. The state where I was born and raised has been no. 1 in a lot of bad things over the years—transportation issues, traffic problems, education failure. But I am proud to say that Georgia is one of the top states if not THE top state to do business and that makes this Georgia peach proud. (Source)

Luckily I have the opportunity to serve in the Georgia legislature and create and push for policies that I believe will help Georgia continue to lead other states with respect to business friendliness. One of my projects leading up to the 2017 legislative session is to examine our private investment policy in Georgia and provide recommendations to stakeholders to strengthen our flow of private capital through the State.

One of the important measures that Georgia took the lead on was its intrastate crowdfunding exemption. The Invest Georgia Exemption, or IGE (2011), is an exemption to the 1933 federal Securities Act that allows Georgia to create its own regulations around intrastate crowdfunding (not interstate–that’s across state lines).Georgia was one of the FIRST states to pass this intrastate exemption and now there are 31 other states that have passed similar regulations to make it easier to raise capital within a state.

After taking a look at the states across the country, Georgia really is leading the states in intrastate offerings because of its raised cap, notice only 2 page filing requirement, a higher than normal cap on investment amounts and the fact that crowdfunding portals are not required in order to raise capital.

 

 

 Here is the gist of the IGE regulations: (Legal Disclaimer: Please consult the full regulations of IGE before proceeding.)

  1. Issuer has to be a for profit entity formed under the laws of Georgia and registered with the Secretary of State (so no partnerships or sole proprietorships);
  2. The maximum amount an issuer can raise is $5MM (up from $1MM as of the Fall of 2015);
  3. The issuer cannot accept any more than $10,000 from a single purchaser UNLESS purchaser is an “accredited investor” as defined under Rule 501 of the S.E.C. (that rule may be changing soon under federal law so watch for that legislation);
  4. All funds must be deposited into a bank authorized to do business in Georgia;
  5. Upon or before either of 2 triggering events, the issuer must file a notice with the Commissioner in writing or electronic form with specific information; and
  6. This exemption cannot be used with any other exemption under the Rules or Act EXCEPT for officers or sales to certain people.

That’s it. To date, Georgia has had 38 companies apply for the IGE Exemption.

Compare the raise cap and investor cap of Georgia with other states:(Data provided by GA House of Representatives Research Office)

  • Alabama- $1MM; $5k per investor
  • Arizona– $1MM or $2.5MM if GAAP financial statements are audited and presented; $10k per investor [Only 1 company has filed for exemption]
  • Colorado– $1MM; Unlimited [No companies have filed for exemption.]
  • DC- $500k or $1MM if GAAP used; For “natural persons”: $10k per investor if the investor’s gross incoem is less than $100k; $25k per investor if the investor’s gross incoemi s $100k-$200k; for non natural persons, $0 unless gross net worth is greater than $1MM
  • Florida– $1MM; The lesser of $2k or 5% of investor’s annual net worth per investor per year if the investor’s annual gross income or net worth is less than $100k or the lesser of $100k or 10% of the investor’s annual net worth per investor per year if the investor’s annual gross income or net wroth is over $100k
  • Idaho- $2MM; The lesser of $2,500 or 10% of the investor’s net wroth per investor exlcuding home auto and furnishings. [Idaho has issued orders authorizing crowdfunding in 5 instances.]
  • Illinois- $2MM or $4MM is the insurer provides independently reviewed and officer certified financial documents; $5k per investor per offering
  • Iowa- $1MM; $5k per investor per offering, treating relatives and people in the same household as one investor
  • Indiana-  $1MM or $2MM if GAAP used; $5k per investor
  • Kansas– $1MM; $10k per investor
  • Kentucky- $1MM or $2MM is GAAP used; $10k per investor
  • Maine- $1MM; $5k per investor
  • Maryland– $100k, $100 per investor
  • Massachusetts- $1MM or $2MM if the insurer provides independently reviewed and officer certified financial documents
  • Michigan– $1M or $2MM if the insurer provides independently reviewed and officer certified financial documents
  • Minnesota- $2MM or $5MM is GAAP used with periodic increases beginning in 2018
  • Mississippi- $1M; limited to qualified purchasers are defined in Code and none of the company’s officers and directors can purchase more than 15% of offering; notwithstanding, the limit is the greater of $50k or 10% of investors’ annual income or net worth if an “accredited investor” under Rule 501 of the S.E.C. OR the greater of $5,000 or 5% of the investor’s annual income or net worth is the investor is NOT an “accredited investor”
  • Montana– $1MM; $10k per investor
  • Nebraska- $1M or $2MM if GAAP used; $5k per investor
  • New Jersey- $1MM; $5k per investor, per offering
  • New Mexico– $2.5MM with no aggregate cap; $10k per investor per offering
  • Oregon- $250k; $2,500 per investor
  • South Carolina– Unlimited; Unlimited
  • Tennessee- $1MM; $10k per investor
  • Texas- $1MM; $5k per investor
  • Vermont- $1MM or $2MM if the insurer provides independently reviewed and officer certified financial documents; $10k per investor
  • Virginia- $2M; $10k per investor
  • Washington- $1M; the greater of $2k or 5% of the investors annual net worth per investor per year if the investor’s annual gross income or net worth is less than $100l or the lesser of $100k or 10% of investor’s annual net worth per investor per year if the investor’s annual gross income or net worth is over $100k
  • West Virginia- $1MM or $2MM if the insurer provides independently reviewed and officer certified financial documents; $10k per investor
  • Wisconsin- $1M or $2MM if the insurer provides independently reviewed and officer certified financial documents; $10k per investor (Cap may not apply if investor qualified as a Certified Investor under Wis. Stat. Section 551.102(4m).)
  • Wyoming-$1MM or $2MM if the insurer provides independently reviewed and officer certified financial documents; $5k per investor

 

My Thoughts: I like that South Carolina, whom many would argue is our biggest rival with respect to business competition, has an unlimited raise cap so companies are not restricted to how much money they can raise. However, as many states have done, I would suggest making sure that GAAP are used and that the financial statements are independent reviewed and audited before taking the cap off IGE. The cap on investor contributions should remain the same under IGE and not go to the complicated percentage scale so many states use based on income and/or net worth. Let’s keep it simple.

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I am Dar’shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practicehelping 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. I also serve as the ranking Democrat on the Georgia House Small Business Development and Job Creation Committee. View past and upcoming speaking engagements and request me to speak to your organization.

NEW SERVICE OFFERING: Legal Opinions! You have an issue, we have an answer. For more information, click HERE for a sample legal opinion memo.

You may be interested in my non-profit organization as well to EDUCATE and EMPOWER minorities:

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our 1 hour consultation.

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Filed under capital raising, Georgia law, investor, legal compliance, private debt, private equity, securities

If you have a gift to offer the world, it doesn’t need to be nicely wrapped. Just do it!

Many of you have seen or heard my rants on Facebook, Twitter, Instagram,YouTube or anywhere else that I think I have an audience. And the rant is typically the same—-WHERE ARE ALL THE MINORITIES (WOMEN AND RACIAL MINORITIES) WHEN INVESTORS AND OTHERS ARE DISCUSSING PRIVATE CAPITAL? Many times, I look to my left—and my right—-and I am the only woman or person of color in the room or at the table (and if I am having a really depressing week—I’m the only one of for both). And this doesn’t make sense given the Business FAQs about Georgia (Georgia is #1 in the growth of women owned businesses and metro Atlanta is #1 in the US for black owned businesses) and the amount of private capital being infused into Georgia (see below).

So I decided to develop a personal and professional pledge—the DK Pledge I call it—-as a constant reminder to myself why I must continue to break down the walls of access, education and communication between minority businesses and the world of private capital.

But the pledge was not enough. You see, I am a woman of action—I’ve been raised that if I don’t like something, I don’t complain, I do something about it (which is probably why I was elected to the GA House of Representatives at age 27 but I digress). So I decided to start a non-profit with the FOCUS on “Educating and empowering minorities, especially women and racial minorities, on how to access private capital to grow their companies and create generational wealth.”I started with a small interest group in January and now we have a 8 member Board of Directors, approved by-laws, registration with the Secretary of State, and as of April 1, 2016 we are now a 501(c)(3) under the IRS Code with tax exempt status!—Just in time for our April 28th meeting which I hope you will join us in attending!

Now I wish that I could say that I did this alone but I didn’t. I had help as we all need rather we want to admit it or not. Say hello to my fabulous Board Members who believe in my vision and have supported this effort:

 

Carleton Moten

Board Member

VP of Finance

Maurice Jackson

Vice Chair of Board

VP of Programs

 

 

Rod Echols

Board Member

VP of Technology

 

Shannon Weaver

Board Member

VP of Sponsorships

 

Sylvester Ford

Board Member

VP of Membership

 

Dar’shun Kendrick

Founder/Board Chair

 

 

And a SPECIAL shout out to the tax attorney that helped us to get it all done—Mr. Keith Miles.

You can contact any of the above mentioned Executive Board Members by downloading this CONTACT LIST and letting us know if you’d like to be involved with our organization. Here are other ways to connect with us as well:

So…if you are a finance professional out there, minority or not, are you ready to help us in our mission to empower and educate minority entrepreneurs on how to obtain a piece of the almost $2 Trillion in private capital that has been invested over the last 10 years? If so, contact me and let me know.

***************************************************************************

I am Dar’shun Kendrick, Private Securities Attorney and Owner of Kendrick Law Practicehelping 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.

NEW SERVICE OFFERING: Legal Opinions! You have an issue, we have an answer. For more information, click HERE for a sample legal opinion memo.

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our 1 hour consultation.

Follow us on social media:  

LinkedIn Company Page

Twitter
Facebook
Blog
Instagram
Slideshare

Periscope- Search “Kendrick Law” (interactive live videos)

 

Leave a comment

Filed under capital raising, non-profit, private debt, private equity, securities