Atlanta – After coming to Georgia to take advantage of Secretary of State Brian Kemp's Invest Georgia Exemption, an Atlanta-based real estate crowdfunding company announced this week that it has gained federal approval to expand into other states. Groundfloor is the first business in the nation to qualify under the U.S. Securities and Exchange Commission’s new crowdfunding rule, known as Regulation A+.
“This is why we put the Invest Georgia Exemption in place: to give innovative companies an edge in Georgia,” said Kemp. “We want to encourage new businesses to open in Georgia, give those businesses the opportunity to grow and expand, and give Georgia residents the opportunity to invest once they conduct their due diligence. We congratulate Groundfloor on its success in Georgia and wish this Georgia employer good luck as it expands and grows.”
Prior to qualifying under Regulation A+, Groundfloor had operated in Georgia using Kemp’s Invest Georgia Exemption, one of the first intrastate crowdfunding rules in the country. It currently allows Georgia companies to raise up to $1 million a year from Georgia residents. Nonaccredited investors can invest up to $10,000. In specified circumstances, the exemption allows companies to sell securities without registering the offering with the state.
Groundfloor moved its operations from North Carolina to Georgia to take advantage of this innovative exemption. So far, Groundfloor has funded over $2 million of real estate projects with no defaults from its borrowers. The SEC qualification allows Groundfloor to expand into eight more jurisdictions: California, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington state, and Washington, D.C.
Kemp is in the process of raising the annual limit on the Invest Georgia Exemption from $1 million to $5 million.
“We had some good feedback from companies that the $1 million cap was really limiting the type of projects that could use the exemption, so we are looking into raising the limit to allow even more investment into Georgia companies,” said Kemp.
“It’s exciting to witness the Invest Georgia Exemption successfully being used as a financing stepping stone for emerging local businesses," said Dara Albright, an Atlanta businesswoman recognized as an expert on crowdfinanace. "By validating the significance of intrastate crowdfunding in the capital formation process, Secretary Kemp's leadership continues to set new crowdfunding precedents for the nation."
Georgia was the second state to allow intrastate crowdfunding when it was adopted in 2011 and the first to allow portals such as Groundfloor. Since then 28 states have enacted intrastate crowdfunding rules and the SEC has finalized its own crowdfunding rules.
Brian Kemp has been Secretary of State since January 2010. Among the office’s wide-ranging responsibilities, the Secretary of State is charged with conducting secure, accessible, and fair elections, the registration of corporations, and the regulation of securities, charities, and professional license holders.
DISCLAIMER: Groundfloor or any other issuers use of the Invest Georgia Exemption does not mean that the Secretary of State Securities Division has verified, in any way, upon the truth, completeness, or accuracy of the information filed by the issuer, the merits of the securities offered, or has recommended or given approval to such security or transaction. Investing is risky. Investors should conduct their own due diligence before investing in any security and must be able to afford the loss of their entire investment.