On July 11, 2017, Secretary of State Brian Kemp, as Georgia’s Commissioner of Securities, amended the state’s crowdfunding rule to allow more companies to utilize the Invest Georgia Exemption. The IGE is widely recognized as one of the most successful crowdfunding rules in the country, and over fifty entities currently utilize the exemption.

“The Invest Georgia Exemption provides entrepreneurs with increased access to capital from Georgia investors in order to develop new business ventures, grow existing operations, and create jobs in our state,” stated Secretary Kemp. “By expanding the exemption, we expect more businesses to take advantage of crowdfunding and develop roots in the Peach State.”

Late last year, the Securities and Exchange Commission finalized rules to further facilitate intrastate securities offerings through crowdfunding. Last week, Georgia’s Securities Division adopted final rules to reflect the SEC’s changes after extensive review and public feedback.

The SEC modernized Securities Act Rule 147, a safe harbor from registration for eligible intrastate securities offerings. Issuers do not have to register certain intrastate offerings with the SEC if they file a simple, two-page notice for the IGE with Georgia’s Securities Division.

The SEC also created Rule 147A, which expands the types of securities issuers allowed to solicit out-of-state residents so long as securities sales are limited to in-state residents. Previously, federal rules constrained IGE to domestic, for-profit Georgia entities, but the change now allows certain foreign, for-profit entities to solicit and sell offerings to in-state residents.

Put simply, more businesses will now be able to leverage the IGE, and issuers can now market such offerings using any form of mass media, including social media platforms.

In 2011, Secretary Kemp created the Invest Georgia Exemption and allows certain entities to raise up to $5 million a year from Georgia investors. Eligible businesses need only file a two-page notice filing with the Securities Division to use the crowdfunding exemption.

Real-estate technology companies, medical device companies, breweries, restaurants, and many other Georgia businesses have taken advantage of the Invest Georgia Exemption to raise millions of dollars in capital and create jobs.

“Georgia is a wonderful place for entrepreneurs to start businesses, and this exemption only makes it easier,” said Kemp.  “The Securities Division will continue to identify ways to cut red tape and allow our hardworking citizens to create jobs.”