A Critical Analysis of the Recent Georgia Initiatives to Promote Intrastate Crowdfunding Investments in Private Georgia Companies

Abstract

The investment criteria for “qualified” companies by the Georgia Fund is not based upon economic logic, if the goal is private sector job creation. The criteria of less than 20 employees, less than 3 years old, less than $500,000 in annual revenue, and less that $1,000,000 in aggregate capital raise is directly counter to the goals of economic growth and job creation in Georgia, which would target exactly the opposite criteria if the goals were economic growth and job creation. The statistics on capital investments in private technology firms indicates that the mother lode of jobs is created by companies that are 8 years old, which need about $1.5 million in capital. If these companies obtain the capital that they need, their job creation goes from about 20 jobs to about 40 jobs, per company.