If the provisions of the Jumpstart Our Business Startups Act, a/k/a the JOBS Act, that were intended to ease restrictions on crowdfunding for small businesses sparked a rush of excitement nationwide, the Securities and Exchange Commission, ever cautious, has not exactly stoked that fire. In fact, the SEC has still to grind out rules that will allow the law to go into effect and finally open the throttle of this economic engine nationwide. Rumored finally to be out this fall, many still say it will be 2014 before the SEC is ready to publish its final rules.
Undaunted, Georgia has leapt ahead of the pack with the Invest Georgia Exemption (IGE), allowing non-accredited residents of Georgia to invest in Georgia companies under certain conditions. Using this exemption, Georgia companies can raise up to $1 million annually from non-accredited as well as accredited investors, and–in what may or may not be the game changer–can solicit investments in Georgia from Georgia-based residents, even if they are non-accredited (up to a limit of $10,000 in each Georgia issuer per investor). See Equity Crowdfunding: Much Ado About Nothing?
The Secretary of State provides a synopsis of the rules here, and full Rules of the Georgia Commissioner of Securities can be found here. You may still need an attorney to interpret them, but crowdfunding websites like Kickstarter will undoubtedly make the process easier very soon. Although the debate continues as to how willing small investors will actually be to fund fledgling enterprise, one thing is certain: with the Invest Georgia Exemption, Georgia has taken another step forward in establishing itself as one of the most startup friendly states in the US and now offers some of the most fertile ground in the nation for investment-seeking tech and non-tech startups alike.