Chamber Supports HB 718 - "Invest Georgia" Program
Monday, February 13, 2012
The Georgia Chamber of Commerce supports offering incentives to provide additional venture capital targeted to Georgia-based companies and attract more venture capital firms to our state. The Chamber has designated HB 718 as a scorecard issue for 2012.
The Economic Impact of Venture and Seed Capital
- The Kauffman Foundation ranks Georgia first in entrepreneurial activity in the nation, and the National Venture Capital Association ranked Georgia 13th in venture capital investment in 2010.
- However, Georgia Tech’s Enterprise Innovation Institute estimates that 92 cents of every venture capital dollar invested in Georgia companies comes from out of state.
- As a result, Georgia often loses businesses to other states when firms decide to keep a closer eye on their investments.
- It’s estimated that 40 percent of the venture-backed companies in Georgia leave the state within five years due to inadequate access to local funding.
- Neighboring states, including Florida, North Carolina, South Carolina and Tennessee, have created venture capital programs with unique, state-specific attributes and active participation from their local investment communities.
- These programs support the growth and recruitment of companies and bolster the local
- venture capital infrastructure.
- Georgia would benefit from its own public-private venture capital partnership with likely financial returns to the state that include jobs created, businesses funded, business revenue generated, state taxes generated and positive returns on capital investment
"Invest Georgia" Program
- HB 718, sponsored by Rep. Allen Peake, would create up to a $200 million venture capital fund to make investments in early-stage and growth-stage Georgia companies in leading industry sectors.
- Access to capital would be raised by auctioning insurance premium tax credits. A private dollar match would also be required.
- A quality governance and reporting structure would ensure appropriate oversight, transparency and accountability.
- An independent third party would be chosen to oversee investments, and all metrics related to investments would be reported to the General Assembly and the Governor annually.
- The legislation would implement the best practices of other successful state programs while capitalizing on Georgia’s unique core assets
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