1. TECHNOLOGY EXECUTIVES
ROUNDTABLE
2012 LEGAL UPDATE:
WHAT EVERY TECHNOLOGY COMPANY
NEEDS TO KNOW
JANUARY 17, 2012
MODERATOR:
David M. Calhoun (Partner Morris, Manning & Martin, LLP)
PANELISTS:
Scott L. Allen and Christopher E. Maxwell
Morris, Manning & Martin, LLP

2. CONTENTS
TAB 1 BIOGRAPHIES (DAVID CALHOUN, SCOTT ALLEN
AND CHRIS MAXWELL)
TAB 2 FREQUENTLY ASKED QUESTIONS -AMERICA
INVENTS ACT
TAB 3 GEORGIA’S NEW RESTRICTIVE COVENANTS
ACT MEMORANDUM
TAB 4 TROTMAN v. VELOCITEACH PROJECT
MANAGEMENT, LLC
TAB 5 PHONEDOG, LLC V. KRAVITZ (NY TIMES
ARTICLE)
TAB 6 GEORGIA CAPITAL ACCELERATION PROGRAM
HOUSE BILL 718
TAB 7 IN RE: OPENLANE SHAREHOLDER LITIGATION
TAB 8 VALUATION AND APPRAISAL MEMORANDUM

3. David M. Calhoun
Partner
Phone: 404.504.7613 • Fax: 404.365.9532 • E-mail: dcalhoun@mmmlaw.com
David M. Calhoun is a partner in the firm’s Corporate Securities, Mergers and Acquisitions, and Financial
Technologies practices.
Mr. Calhoun practices in the areas of corporate finance, securities, and mergers and acquisitions. He has
significant experience in public and private securities and corporate finance, including representation of
issuers, underwriters, and investors. Representative transactions include debt and equity offerings (public
and private), going private transactions, venture capital financings, IPOs, secondary offerings of common
and preferred securities, PIPEs (private investments in public equity), and tender offers. Mr. Calhoun has
been active in mergers and acquisitions for public and private companies, including acting as counsel in
transactions ranging in size from less than $100,000 to over $1 billion. Representative M&A transactions
PRACTICE AREAS:
include representation of both buyers and sellers in mergers, asset sales, stock sales, international and
Corporate Finance cross-border transactions, and leveraged buy-outs. He has represented companies in numerous
Securities industries, including technology, biotechnology, green tech, medical devices, business process
outsourcing, manufacturing, real estate and financial institutions. Mr. Calhoun’s practice also includes
Mergers & general corporate counseling, corporate governance, audit and special committee representation, and
Acquisitions securities law compliance matters.
Financial Institutions
Clean Tech Education
University of Tennessee at Knoxville, B.A., 1985
Mercer University, J.D., cum laude, 1988
BAR ADMISSION: Brainerd Currie Honor Society
State Bar of Phi Alpha Delta
Georgia, Admitted Book Editor, Mercer University Law Review
1988
Honors and Affiliations
Listed, Legal 500, Venture Capital and Emerging Companies, 2010-2011
American Bar Association
National Association of Real Estate Investment Trusts (NAREIT)
Atlanta CEO Council, Board of Directors
Venture Atlanta, Organizing Committee
Recent Speeches
“Overview Of The Dodd-Frank Wall Street Reform And Consumer Protection Act Of 2010”
“Non-Traditional Offering Structures: Pipes, Equity Lines and SPACs”
“Corporate Governance for Public Companies”
“Exit Strategies: M&A vs. Going Public”
“Accounting, Tax and Legal Update: What Every Technology Company Needs to Know” – 2007, 2008
and 2009
“Tips for Due Diligence in Mergers & Acquisitions”
“Practical Time and Work Management”
“The Public REIT: What Can You Expect?”
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4. “IMN Securities Law Conference: Blue Sky Update”
“Raising Capital for Transaction Processing Companies”
“Venture Capital for Southeastern Companies: How to Find It and What It Costs”
“Sarbanes-Oxley Act of 2002 and Legal Compliance – 2008 Update”
“Buying and Selling a Business – Mastering the Basics”
“How to Create a Board of Directors or Advisory Board That Works”
Recent Articles
“Non-Traditional Offering Structures: Pipes, Equity Lines and SPACs”
“Overview Of The Dodd-Frank Wall Street Reform And Consumer Protection Act Of 2010”
3

5. Scott L. Allen
Partner
Phone: 404.504.7743 • Fax: 404.365.9532 • E-mail: sallen@mmmlaw.com
Scott L. Allen is partner in the firm’s Corporate and Securities Practices. His practice focuses primarily on
representing public and private companies, including private equity firms and their portfolio companies and
family owned enterprises, in general corporate matters, mergers and acquisitions, venture capital and
public securities offerings.
Mr. Allen’s practice covers a wide variety of industries, with extensive experience representing clients in
the information technology and telecommunications industries, as wells as business services companies,
medical device companies and traditional light manufacturing and sales and distribution organizations.
Mr. Allen routinely advises a range of clients, including start-up, middle market and large cap companies,
PRACTICE AREAS: in complex mergers and acquisitions, venture capital, and corporate finance issues, involving both
domestic and cross-border transactions.
Corporate
Mr. Allen has been recognized as a leading young attorney in the corporate practice area by being
Mergers &
selected as Georgia Super Lawyers Rising Star, as published by Law & Politics and Atlanta magazines on
Acquisitions
numerous occasions. Mr. Allen is also a frequent speaker on corporate law, M&A and private equity
Securities topics for continued legal education programs, trade association events and related conferences.
Medical Device
Honors & Affiliations
BAR ADMISSION: Association for Corporate Growth (Member)
State Bar of Atlanta Venture Forum (Member)
Georgia, Admitted
2002 Technology Association of Georgia, Corporate Development Society (Board Member
and Program Chair)
Southeastern Medical Device Association (General Counsel and Member)
Selected as Georgia Super Lawyers Rising Star by Law & Politics and Atlanta magazines, 2011
Representative Matters
Representation of a leading “smart-grid” technology company in venture capital transactions in excess
of $90 million received from national VC funds and strategic investors, joint venture transactions with
Fortune 100 partners and general corporate matters.
Representation of a technology based expedited delivery company in venture capital transactions in
excess of $110 million received from national VC funds, its senior and mezzanine credit facilities and
general corporate matters.
Representation of technology company in the loyalty card market in its $24 million recapitalization with a
private equity sponsor and related roll-over of management equity.
Representation of a leading clinical research organization based in the U.K. in its U.S. acquisitions and
U.S. aspects of its senior and mezzanine credit facility.
Representation of sellers in $32 million sale to a private equity sponsored competitor in the plastics
manufacturing industry.
Representation of a U.K.-based cable and telecommunications equipment provider in several U.S.
acquisitions totaling in excess of $200 million.
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6. Representation of firearm and ballistics company in its $18 million sale to private equity sponsored entity and continued
corporate representation.
Representation of private equity sponsored software company in the legal and accounting market in its U.S. acquisitions and
general corporate matters.
Representation of private equity sponsor and management in $27 million sale of full-service professional landscape joint venture
to a new private equity sponsor.
Representation of medical device company developing a product combining radiation therapy with MRI technology in a $25
million venture capital transaction.
Representation of a “triple-play” telecommunications client in its $255 million acquisition of a regional broadband
telecommunications company.
Representation of venture capital fund in its Series A and Series B investment in a leading provider of endoscopy products.
Representation of a leading provider of HR software in its $155 million sale to a Fortune 50 strategic partner.
Representation of a public client providing call center and compliance monitoring solutions in a $100 million public offering.
Representation of a public client in a $200 million PIPE (private investment in public equity) transaction.
Representation of a leading international provider of billing software in the energy industry in its $90 million sale to a Fortune 100
company.
Representation of a technology client providing mobile messaging and marketing services in a $25 million venture capital
financing.
Representation of a leading provider of audio and speech analysis technology in a venture capital and mezzanine debt
transaction in excess of $15 million.
Education
University of Georgia, B.A., 1998
Emory University School of Law, J.D., with honors (Order of the Coif), 2002
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7. Christopher E. Maxwell
Associate
Phone: 404.364.7477 • Fax: 404.365.9532 • E-mail: cmaxwell@mmmlaw.com
Christopher E. Maxwell is an associate in the Corporate Practice. Mr. Maxwell is active principally in the
firm's general corporate practice, concentrating in mergers and acquisitions and venture capital
transactions. Mr. Maxwell has assisted many of the firm's clients in structuring and consummating
complex corporate transactions, including, mergers, acquisitions, debt facilities, financings, restructurings
and corporate reorganizations. Mr. Maxwell’s practice covers a wide variety of industries, with experience
representing clients in the information technology and telecommunications industries, as well as business
services companies.
Recent Experience
Representation of Public Company in several PIPE (private investment in public equity) transactions
PRACTICE AREAS:
and its regular securities filings.
Corporate
Representation of sellers in $32 million sale to a private equity sponsored competitor in the plastics
Mergers & manufacturing industry.
Acquisitions
Representation of technology client providing payment processing services in a $5 million venture
Securities capital financing.
Representation of a telecom expense management Company in a $15 million business combination
with a competitor in the telecom industry and related follow-on acquisitions of the combined entity.
BAR ADMISSION:
Representation of consulting company in reorganization of various subsidiaries and business lines.
State Bar of Georgia,
Admitted 2007 Representation of financial institutions bill processing company in its mezzanine credit facilities.
Representation of software company in the foreign option exchange sector in a $6 million venture
capital financing.
Representation of a battery manufacturer in venture capital transactions in excess of $10 million
received from national VC funds, its senior and mezzanine credit facilities and general corporate
matters.
Representation of medical waste disposal company in its $32 million sale to a competitor in the waste
disposal industry.
Representation of a credentialing and compliance monitoring company in the healthcare industry in a
$67 million sale to a private equity sponsored entity and related roll-over of management equity.
Representation of telecommunications company in its acquisition of European telephone
company and venture capital financings in excess of $10 million.
Representation of software company focusing on compliance related industries in a series of VC
transactions in excess of $10 million.
Representation of a public company in the healthcare industry in several small strategic acquisitions.
Representation of a technology based expedited delivery company in venture capital transactions in
excess of $110 million received from national VC funds, its senior and mezzanine credit facilities and
general corporate matters.
Representation of firearm and ballistics company in its $18 million sale to private equity sponsored
entity and continued corporate representation.
Representation of private equity sponsor and management in $27 million sale of full-service
professional landscape joint venture to a new private equity sponsor.
Representation of a medical claims processing company in $28 million acquisition of competitor in
medical claims processing sector.
6

8. Education
Emory University, B.A., 2004
The University of Georgia School of Law, J.D., cum laude, 2007
Member, Student Bar Association
Member, Georgia Law Review
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9. MEMORANDUM
TO: Clients and Entrepreneurs
FROM: Morris, Manning & Martin
RE: Frequently Asked Questions (FAQs) about Patent Reform – The
Leahy-Smith America Invents Act of 2011 (“AIA”)
DATE: January 2012
________________________________________________________________________
This Frequently Asked Question (FAQ) memorandum addresses typical questions regarding the
new Leahy-Smith America Invents Act of 2011 (enacted September 16, 2011), and its potential
impact on patent application filing, patent enforcement, and patent litigation. This document is
authored by the Intellectual Property Group of Morris, Manning & Martin, LLP
(www.mmmlaw.com). Please note that there are additional questions that will be relevant in this
area and you should consult an IP attorney at MMM (contact information listed at the end of this
memorandum) with any other questions.
1. What is the main impact of the AIA?
Answer: The main impact of the America Invents Act (“AIA”) is expected to be an increased
urgency to file patent applications, due to the fact that the U.S. patent system will now grant
patents to the first inventor to file a patent application (“first to file”) instead of to the “first to
invent.”
2. What should I be doing now as a result of the AIA?
Answer: There are many potential effects of the AIA, but the most important effect on patent
applications is “file early, file often.” Because the AIA radically changes the priority rules
associated with patent filings, it is now more important than ever to file patent applications as
soon as possible. Also, because it is now potentially easier to challenge issued patents (and
submit prior art in pending applications), it is also important to monitor the patent filings of your
competitors.
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10. 3. Will the AIA improve the quality of U.S. patents?
Answer: It is not known at this time if the AIA will improve the quality of patents. Patent
quality is an elusive characteristic – what makes for a “quality” patent? There are no objective
measures as to the quality of a patent. The AIA is, however, supposed to improve patent quality
because of increased scrutiny of patent applications at the U.S. Patent and Trademark Office
(USPTO) and new procedures for challenging patents outside of the courts.
4. Will the AIA affect the patent lawsuits that are brought by patent “trolls” and non-
practicing entities (NPEs)?
Answer: It is not likely that the AIA will appreciably affect the incentives for NPEs (also known
as patent “trolls”) to bring lawsuits to enforce patents, at least for the immediate future. The AIA
includes a new joinder provision requiring that accused infringers in the same lawsuit must be
tied together by “the same accused product or process.” It is possible that, in the longer term
(more than 5 years out), the likelihood of success of lawsuits by NPEs will decline due to a
decreased number of patents that are issued. However, it will be a number of years before the
effects of the AIA on patent litigation will be fully felt and realized.
5. Will the AIA make it any easier or less expensive to challenge patents outside of courts?
Answer: Possibly. The AIA includes a number of reforms that are designed to provide new and
improved methods to challenge possibly invalid patents outside of the court system. The AIA
provides for new procedures in the USPTO for (a) Post-grant review, (b) Preissuance
Submissions, and (c) Supplemental Examination. These new procedures will add to the USPTO
bureaucracy, but are supposedly designed to help challenge suspect patents more quickly and
inexpensively.
6. Will the AIA cut back on the large damages awards that have been awarded in many
recent patent lawsuits?
Answer: No. The AIA includes no provisions that affect patent damages or awards. A number of
lobbyists had urged Congress to include patent damages limitations so that companies could
more readily manage their exposure to patent infringement claims. However, for some reasons
not completely understood, Congress failed to include the patent damages limitations provisions
that some companies felt were needed.
7. What is the biggest change to the U.S. patent system from the AIA?
Answer: Clearly, the biggest change to the U.S. patent system is the change from “first to
invent” to “first to file.” The change required a complete revision to the definition of prior art.
The revised definition greatly expands the nature of information and activities that bar the grant
of a valid patent to a patent applicant.
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11. 8. Did the AIA change the basic requirements for obtaining a patent?
Answer: No. The primary requirements for patentability of (a) patentable subject matter, (b)
novelty, (c) nonobviousness, (d) a complete and enabling written description, and (e) description
of the best mode of practicing the invention – did not fundamentally change. There are changes
that affect the best mode requirement, but those changes are not expected to have a major impact.
A patent application under the AIA must still satisfy these basic requirements. The novelty and
nonobviousness requirements relate to “prior art,” whose definition has been significantly
altered.
9. What is the definition of “prior art” under the AIA?
Answer: The definition of prior art is fundamentally different under the AIA than under previous
laws. Prior art provides the evidentiary baseline for judging whether an invention is novel and
nonobvious, and thus entitled to be patented. In particular, the one-year “grace period” has been
eliminated for many types of prior art (see subsequent questions for more details). This is a
profound change. Prior art is now defined as other patents, printed publications, on sale events,
and public use events that predate a patent applicant’s effective filing date. Many more types of
information, both in the U.S. and in other countries, is now available to cite against a patent
application as evidence that a patent should not be granted (or is invalid).
10. Did the AIA make any changes to the definition of patentable subject matter?
Answer: No. The primary categories of patentable subject matter are still (a) machines, (b)
manufactures (articles), (c) composition of matter, and (d) processes or methods. No significant
subject matter-related cases were overruled, such as the 2010 Bilski v. Kappos decision, which
affected business method and computer software patents.
11. Does the AIA eliminate business method patents?
Answer: No. There are no substantive provisions in the AIA that affect the way that the USPTO
receives or processes so-called “business method patents.” However, the AIA includes a new 8-
year program to address the validity of business method patents, using a new procedure for
challenging such patents at the USPTO. There is still much complexity in determining what
exactly is a “business method” patent.
12. Did the AIA affect the availability or desirability of filing a “provisional” patent
application?
Answer: No. Provisional patent applications (PPAs) are still available under the AIA. The
requirements for a useful PPA remain the same. Patent applicants must still file a complete
written description of any invention that is to be claimed, although there is no requirement to
include any claims in a PPA. PPAs still present significant risks that a patent applicant will not
devote sufficient attention and work to providing a complete written description, so that the
benefits of a PPA may not be available.
13. What is the impact of the AIA on the “best mode” requirement?
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12. Answer: Under current laws, a patent applicant is required to describe in the patent application
the “best mode” for making and practicing the invention. The AIA abolishes the best mode
requirement as a defense to patent infringement, but it requires that the best mode still be
described in patent applications. Specifically, the AIA amends the laws to eliminate the best
mode requirement as “a basis on which any claim of a patent may be canceled or held invalid or
otherwise unenforceable.” The overall impact of this seemingly conflicting provision is not
entirely clear.
14. Will the USPTO be able to improve its operations and efficiency and speed of
processing patent applications?
Answer: Probably, yes. The AIA included a provision that allows the USPTO to receive
increased funding for its operations, of about $300 million per year at current rates of activity.
However, Congress failed to grant the USPTO the right to retain all of the patent fees that it
receives to fund its operations, as many experts urged. Congress thus did not completely end fee
diversion – (a) the USPTO is appropriated funds to some extent by Congress each year, (b) the
USPTO can charge fees at increased rates, (c) collections in excess of the appropriation are
collected in a reserve fund, and (d) Congress could – perhaps – allocate additional amounts of
the reserve fund for USPTO operations.
15. What was the reason for changing from a “first to invent” system of granting patents to
“first to file”?
Answer: The reasons and policies for making this change are not clear. Since 1995, Congress
has attempted to make changes to the U.S. patent system so as to make our system consistent
with the patent systems of many other countries. This is called patent harmonization. This was
primarily to promote a concept that patent applicants would receive the same treatment in the
patent systems of all the different countries that were elected for international patenting efforts. It
is far from clear that this change provides any benefits to U.S. patent applicants, as the patent
systems in most countries are less well developed and consistent than the U.S. patent system.
16. What happened to the “grace period” under the old U.S. Patent Act?
Answer: The Patent Act of 1952 provided a grace period for filing a patent application. This
grace period was provided to the inventor to provide additional time for the inventor to assess the
value of the invention and workability of the technology before requiring significant investment
in the patent process. Specifically, this grace period provided the inventor with a one-year time
period from any public disclosure, offer for sale, or description in a publication of the invention.
Some aspects of the grace period remain under the AIA (see next question), but they are more
limited in scope.
17. What is the “modified grace period” under the AIA?
Answer: Under the AIA, a one-year grace period still applies for certain public disclosures of
the subject invention, so long as those disclosures were made by the inventor, or by someone to
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13. whom the inventor disclosed the invention. Thus, disclosures by an inventor’s competitors or
others working on similar inventions could bar the inventor’s ability to obtain a patent, even
though the inventor actually invented the technology first.
18. When do the provisions of the AIA go into effect?
Answer: The AIA includes numerous provisions that are slated to go into effect at various
points from the date of the AIA’s enactment (September 16, 2011) until the last provision goes
into effect on March 16, 2013. For example, provisions such as the false marking changes, new
“best mode” requirements, prior user defense, and a 15% fee increase across the board went into
effect as soon as the AIA was signed into law. Other provisions such as the new post-grant
review procedures, the ability to file on behalf of an assignee (instead of individual inventors),
modifications to the inter-partes review proceedings, third party submissions, and other
provisions go into effect one year after the enactment of the AIA (i.e., on September 16, 2012).
The “first to file” provisions, changes to the prior art rules, and other significant provisions go
into effect 18 months after the enactment of the AIA (i.e., on March 16, 2013).
19. What is the “prior commercial user” defense now available under the AIA?
Answer: Prior “commercial use” of a patented method is recognized as a defense against
infringement under current law if certain conditions are met, and the AIA expands this defense to
include any “process, or consisting of a machine, manufacture, or composition of matter used in
a manufacturing or other commercial process.” In order to rely on this defense, the accused
infringer must have, “acting in good faith, commercially used the subject matter in the United
States, either in connection with an internal commercial use or an actual arm’s length sale or
other arm’s length commercial transfer of a useful end result of such commercial use.” Other
provisions apply as well.
20. Will it be easier to challenge a patent under the AIA once it has issued?
Answer: Possibly. The AIA replaces the current “reexamination” process with a new “post¬grant
review” process that provides more grounds and opportunity for a patent to be challenged within
a limited time from its issuance. The new post-grant review process is initiated by a petition to
the USPTO that must be filed within nine months after the date of patent grant or issuance of a
reissue patent. The petition does not need to satisfy the familiar “substantial new question of
patentability requirement,” but rather must show that it is “more likely than not that at least 1 of
the claims challenged in the petition is unpatentable. There are other aspects of this provision
that expand the grounds for challenging an issued patent.
21. Will it be possible to challenge a pending patent application?
Answer: No, a third party cannot challenge a pending patent application. However, the AIA
does expand the window and content available for third party submissions of information prior to
issuance. These third party submissions will be considered by the USPTO in granting a patent.
Specifically, third parties can now submit “prior art” to the USPTO before the earlier of either a
notice of allowance of the pending application or the later of 1) 6 months after publication of the
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14. patent application or 2) the date of the first rejection during examination. When submitting prior
art, the third party must provide a description of the relevance of each document along with a
fee.
22. What is “false marking” and how was it affected by the AIA?
Answer: Generally, “false marking” relates to the concept of marking a product, machine, or
other invention as “patented” (or providing a patent number) when in fact the product was never
patented. Recently, some cases made it easier to sue for false marking offenses, even in
circumstances in which a product was initially validly marked, but then the product continued to
be marked as patented even after the underlying patent had expired. The AIA has essentially put
an end to these (sometimes frivolous and unfounded) lawsuits, by making it more difficult to sue
for false marking.
23. Is it now easier under the AIA to “mark” my products as patented?
Answer: Yes. The AIA introduces “virtual marking” as a way to satisfy the public notice
marking requirement. Virtual marks are statements on products or product packaging that direct
the reader to a publicly accessible website, where the patent numbers relevant to the product are
listed. Parties are exempt from liability for false marking after a patent expires if the product or
package uses a virtual mark.
24. Can a company now file a patent application in its own name instead of naming
individual inventors?
Answer: Yes. If an inventor or inventors have assigned their rights in an invention to an assignee,
then the assignee will now be able to file the patent application in its name only. This new
provision should make it easier in some respects for companies to file patent applications on
behalf of its employees.
25. What is the “transitional program for covered business methods”?
Answer: The AIA includes a new bureaucratic process designed to help challenge business
method patents, but it does not cover “technological” inventions (whatever those might be). This
process is similar to the new post-grant review procedures, discussed above. It may not be clear
for some time what is a “technological” invention in the area of business methods patent.
26. Will I receive any reduction in USPTO fees under the AIA?
Answer: Possibly. Under the current laws, “small entities” (generally businesses with less than
500 employees, or universities, individuals, etc.) are entitled to a 50% reduction in fees. The
AIA defines a new category of applicants called “micro entities” that receive a 75% reduction in
filing fees, extension fees, maintenance fees, and the like. These micro entities generally include
small entities that do not exceed some threshold requirements in terms of number of patent
applications filed, gross income, and other factors.
27. Will the AIA speed up the patent examination process?
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15. Answer: Yes, in some limited circumstances. The AIA allows for “prioritized examination” for
a certain limited number of applicants that meet certain requirements. To qualify for prioritized
examination, the applicant must pay greatly-increased filing fees ($4,800), there are limits on the
total number of claims that can be submitted, the application must be complete as of the time of
filing (i.e., all declaration and supporting documents must be present at the time of filing), and
other requirements must be met. Final disposition of the application should occur within twelve
(12) months of filing.
28. Did the AIA change the standard for “willful infringement”?
Answer: No. The AIA has codified the recent standard set forth in the In re Seagate opinion.
Under Seagate (and now the AIA), a party cannot be held liable for willfully infringing a patent
(and thus be subject to triple damages) simply because the party failed to obtain a legal opinion
of non-infringement once the party became aware of the possible infringement. It is worth
noting, however, that although a party cannot be held liable for willful infringement, failure to
seek an opinion of non-infringement can impact the overall damage award in a lawsuit.
29. Did the AIA affect the way that patents are examined and granted by the USPTO?
Answer: Not immediately, but eventually. The USPTO should have more resources (money)
available under the AIA, and will likely hire more examiners, and will establish satellite offices,
etc. But, the law included no substantive provisions on how the USPTO should conduct its
business from a substantive perspective. A number of new regulations for patent processing and
handling will be issued in the upcoming months to implement various AIA provisions. These
new regulations will inevitably change some aspects of the patent process.
*****
For more information regarding any of the above-listed questions, or any others relating to
patents or intellectual property, please contact one of the following attorneys in the
MMM IP Group:
John R. Harris - 404-504-7720 - jharris@mmmlaw.com
Tim T. Xia – 404-495-3678 - txia@mmmlaw.com
Chris Raimund – 202-216-4816 - craimund@mmmlaw.com
Daniel Sineway - 404-364-7412 - dsineway@mmmlaw.com
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16. MEMORANDUM
FROM: Morris, Manning & Martin, LLP
DATE: December, 2011
RE: Georgia’s New Restrictive Covenants Act
On May 11, 2011, Georgia enacted House Bill 30 (the “New Act”), which
governs the enforcement of restrictive covenants against “employees” entered into on or
after May 11, 2011.1 The New Act is a significant departure from the existing body of
case law on the subject, which historically has been an unfavorable forum for employers.
The New Act promulgates safe harbor rules (e.g., courts now presume that restraints of
two years or less in duration are reasonable in time, and that restraints more than two
years in time are unreasonable); liberalizes prior rules (e.g., non-disclosure provisions no
longer require a time limitation; the non-solicitation of customers provision need not
expressly define the types of products or services considered to be competitive in order
for the non-solicit of customers to be enforceable); and, most significantly, permits courts
to “blue-pencil” (i.e., modify, or partially enforce) covenants that are otherwise
overbroad. Under prior Georgia law, these safeguards did not exist or, at best, were
unclear.
While the New Act is more employer-friendly, employers should nonetheless
exercise caution for four reasons:
(1) the New Act applies only to restrictive covenants entered into on or after May
11, 2011;
(2) the New Act permits, but does not require, Georgia courts to blue-pencil
overbroad restrictive covenants;
(3) the New Act applies only to “employees” (however, that term is broadly
defined and includes, but is not limited to, officers, directors, managers, franchisees,
1 House Bill 30 only applies to “contracts entered into on and after [its effective date] and [it] shall not
apply in actions determining the enforceability of restrictive covenants entered into before such date.” Ga.
L. 2011, p. 399, § 5. House Bill 30 is codified at O.C.G.A. §§ 13-8-50
et seq. See Murphree v. Yancey Brothers Company, 2011 WL 4375216, *4 fn.10 (Ga. App. Sept. 21,
2011).
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17. distributors, lessees, licensees, parties to a partnership agreement, sales agents, and
brokers)2; and
(4) few courts have yet to apply the New Act, and, therefore, there is a certain
degree of uncertainty surrounding the interpretation of the New Act.
For example, in Pointenorth Insurance Group v. Zander, 2011 WL 4601028 * 3
(N.D. Ga. Sept. 30, 2011), the defendant, a licensed insurance broker who had signed
restrictive covenants after the New Act went into effect, the court held the covenants at
issue overbroad, but that the New Act permitted the court to “blue pencil any overbroad
or otherwise offensive passages.” Specifically, the court held that it “may” remedy the
broad prohibition against contacting “any of the Employer’s clients” by “blue penciling
that provision to only apply to customers that the Defendant contacted and assisted with
insurance.”
On its face, the Zander decision appears to be a boon for employers because it
takes a broadly drafted provision and seemingly authorizes a court to rewrite it.
However, the court decided Zander in the context of a preliminary injunction, not on the
merits of the case. Therefore, the court did not actually blue pencil the covenants, instead
holding that a court “may” do so (and, if so, it is unclear to what extent a court actually
would modify the covenants or the facts and circumstances that it would deem important
in that context).
In addition, the New Act explicitly states that a court may “modify” an overbroad
restrictive covenant, which is defined as "severing or removing" a part of a restrictive
covenant that would otherwise make the covenant unenforceable. However, the New Act
is silent whether a court may rewrite or otherwise add to a covenant, which the Zander
court appears to authorize. Thus, it is unclear if Zander’s holding is accurate.
The practical effect of the New Act is that employers can be cautiously aggressive
in drafting the scope and territorial limitations of their restrictive covenant agreements,
but they should be aware of the limitations of the New Act and draft their covenants
accordingly. In addition, employers may want to consider strategies to implement new
restrictive covenants agreements with their workforce to provide enhanced protection of
their business interests under the New Act.
-------------------------------
2 Under pre-existing Georgia law, an employer could enter into a non-compete agreement with any type of
employee (e.g., janitor, manager, salesman, etc.). However, under the New Act, a non-compete may only
be enforced against an “employee” who: 1) customarily and regularly solicits customers or prospective
customers; 2) customarily and regularly engages in making sales; 3) has a primary duty of managing a
company, or one of its departments or subdivisions, directs the work of two or more employees and has the
authority to hire or fire other employees; or 4) performs the duties of a "key employee" or a "professional"
as defined by the New Act.
16

18. Note: On November 2, 2010, Georgia voters approved an amendment to the constitution
authorizing a new restrictive covenants law (the “Prior Act”) substantially similar to the
New Act; however, due to a technical flaw, there is a substantial question whether the
Prior Act is valid, and this question has not yet been litigated. Because of the uncertainty
surrounding the Prior Act, on May 11, 2011, the New Act was signed into law.
Accordingly, restrictive covenant agreements entered into between November 3, 2010
and May 10, 2011 may not be subject to the Prior Act and, therefore, the enforceability of
broadly-drafted covenants entered into between an employer and an employee during this
time period is subject to a substantial amount of risk.
17

19. TROTMAN v. VELOCITEACH PROJECT MANAGEMENT LLC
TROTMAN v. VELOCITEACH PROJECT MANAGEMENT, LLC.
CertiFi Project Management Certification Training, LLC v. Velociteach Project
Management, LLC.
Nos. A11A0402, A11A0403.
July 13, 2011
SUMMARY:
A recent decision by the Georgia Court of Appeals addressed the issue of an employer’s
rights when a former employee, upon leaving, uses the company’s proprietary materials
to establish a new competing business.
In the case of Trotman v. Velociteach Project Management LLC, the trial court awarded
project management training company, Velociteach, $147,750 from former employee
Floyd Trotman and his new company, CertiFi, based on breach of contract, fraud, tortious
interference with a business relationship, conversion, and misappropriation of trade
secrets. The court also ordered Trotman to return all VelociTeach materials and barred
him from using Velociteach’s customer lists. On appeal, the Georgia Court of Appeals
affirmed the trial court’s decision.
CASE:
Following a jury trial, Floyd Trotman III (in Case No. A11A0402) and CertiFi Project
Management Certification Training, LLC (“CertiFi”) (in Case No. A11A0403) appeal
from a judgment and other orders entered against them in a dispute arising from
Trotman's continued use of training materials he obtained as a former instructor for
Velociteach Project Management, LLC (“Velociteach”). We have consolidated the cases
for review, and for the reasons that follow, we affirm in part, vacate the award of attorney
fees, and remand.1
Viewed in favor of the jury's verdict,2 the record shows that from 2003 to 2006, Trotman
worked as an instructor for Velociteach, a company founded by Andy Crowe, which
offered project management training courses to students seeking a Project Management
Professional (“PMP”) credential. When Trotman's relationship with the company faltered
due to a lapse in his own credentials and his unauthorized use of a company credit card,
his employment was terminated, and he left the company pursuant to a confidentiality
agreement in February 2006. The confidentiality agreement required Trotman to return or
delete all course materials and electronic presentation slides, and it prohibited him from
18

20. soliciting Velocitech customers for a period of three years. In an exit meeting, Trotman
assured Velociteach staff that he had returned or deleted any Velociteach teaching
materials.3 Soon thereafter, Trotman asked Velociteach if he could buy instruction kits to
teach PMP classes on his own, and Velociteach declined.
In early 2006, Trotman formed his own company, CertiFi, and began teaching training
courses on his own. In early 2007, after seeing Trotman in an airport, Crowe decided to
search for information about Trotman on the Internet. Crowe discovered a CertiFi
website listing Velociteach customers and containing marketing copy that Crowe had
written for Velociteach. Crowe then enrolled a student in one of Trotman's classes to
observe the course content and materials. Based on the similarities between Trotman's
course materials and those he had used previously at Velociteach, Velociteach demanded
that CertiFi cease operating in violation of Trotman's confidentiality agreement. Trotman
refused, and Velociteach sued him and CertiFi, alleging claims for breach of contract,
Uniform Deceptive Trade Practices Act4 (“UDTPA”) violations, fraud, tortious
interference with a business relationship, conversion, and misappropriation of trade
secrets.
After discovery and the denial of the parties' cross-motions for summary judgment, the
action was eventually tried by a jury, which awarded Velociteach $13,750 (from
Trotman) and $134,000 (from CertiFi). The trial court also awarded Velociteach $30,000
in attorney fees and entered a permanent injunction requiring Trotman to, inter alia,
return all Velociteach materials and abstain from using Velociteach's customer lists.
Trotman appeals in A11A0402, and CertiFi appeals in A11A0403.5
Case No. A11A0402
1. During the litigation, Velociteach obtained an interlocutory injunction that prohibited
Trotman and CertiFi from using any instructional slides contained in a certain exhibit.
Based on Trotman's subsequent reformulation and use of a prohibited slide, the trial court
found that Trotman had violated the injunction and held him in contempt, ordering
Trotman and CertiFi to provide a copy of its teaching materials to Velociteach and pay
$1,012.50 in attorney fees incurred by Velociteach while pursuing the contempt motion.
On appeal, Trotman enumerates as error the trial court's interlocutory injunction, but he
does not challenge the $1,012.50 attorney fee award, and the only other remedy,
disclosure of his teaching materials, was permissible as part of the pending litigation. As
Trotman points to no other remedy affecting him or CertiFi resulting from the contempt
finding itself, this enumeration presents nothing for review.6
2. Trotman argues that the evidence and verdict did not authorize the trial court to issue a
permanent injunction against him based on a violation of the UDTPA. We disagree.
“Equitable relief is generally a matter within the sound discretion of the trial court. The
action of the trial court should be sustained on review where such discretion has not been
abused.”7
19

21. (a) Based on the jury's verdict that Trotman violated the UDTPA, the trial court granted
an injunction against Trotman that (1) prohibited him from using a specified trial exhibit
containing Velociteach course materials, (2) required him to return all Velociteach
property and course materials, (3) forbade him from using Velociteach's customer lists,
and (4) required disclosure of each person to whom he had shown the enjoined materials.
Trotman argues that because only he, and not CertiFi, was found to have violated the
UDTPA, the only basis for the finding would be his failure to maintain his PMP
certification. And because he later remedied the lapse in his certification, he argues that
this lapse in certification could not support the injunctive relief granted by the trial court.
This argument ignores the fact that the trial evidence supported a finding that he
personally violated the UDTPA, regardless of whether the jury attributed his behavior to
CertiFi. The UDTPA provides as follows, in relevant part:
(a) A person engages in a deceptive trade practice when, in the course of his business,
vocation, or occupation, he: ․
(2) Causes likelihood of confusion or of misunderstanding as to the source, sponsorship,
approval, or certification of goods or services;
(3) Causes likelihood of confusion or of misunderstanding as to affiliation, connection, or
association with or certification by another; ․
(7) Represents that goods or services are of a particular standard, quality, or grade or that
goods are of a particular style or model, if they are of another; ․
(9) Advertises goods or services with intent not to sell them as advertised; ․ [or]
(12) Engages in any other conduct which similarly creates a likelihood of confusion or of
misunderstanding.
(b) In order to prevail in an action under this part, a complainant need not prove
competition between the parties or actual confusion or misunderstanding. 8
At trial, there was evidence that Trotman created a misleading advertisement stating that
CertiFi had developed course content over a four-year period, which would have referred
to the time Trotman was with Velociteach, not CertiFi. There was also evidence that
Trotman solicited former Velociteach students on behalf of CertiFi, referencing the
Velociteach course and falsely holding himself out as PMP certified. Velociteach also
introduced evidence that Trotman published a list of Velociteach customers and falsely
represented them to be CertiFi customers. Finally, there was evidence that Trotman used
nearly duplicate versions of certain Velociteach course materials without its consent. This
evidence supported the jury's finding that he violated the UDTPA, and the trial court did
not abuse its discretion by awarding equitable relief to Velociteach against Trotman
based on the jury's finding.9
20

22. (b) Trotman also argues that an injunction against future conduct is unwarranted because
his confidentiality agreement has expired, and his wrongful conduct took place in the past
and is not likely to recur. This argument is misplaced. There was evidence supporting a
finding that Trotman's conduct violated the UDTPA regardless of his confidentiality
agreement, and the nature of the wrongful behavior was not such that it could not be
repeated, i.e., by re-creating confusing or misleading marketing materials or re-using
Velociteach's proprietary course materials.10 Nor was the injunction's breadth an abuse of
the trial court's discretion. The injunction essentially pertained to the use of Velociteach
course materials and customer list, and it did not prohibit Trotman from engaging in other
PMP teaching activity. Nor was it an abuse of discretion to allow Velociteach five years
to monitor Trotman's courses, because the harm to Velociteach would not diminish over
time if Trotman unfairly competed with it. Accordingly, this enumeration provides no
basis for reversal.11
3. Trotman next challenges the trial court's failure to give his requested jury charge on the
UDTPA claim. “In order for a refusal to charge to be error, the request[ ] must be entirely
correct and accurate, and adjusted to the pleadings, law, and evidence, and not otherwise
covered in the general charge.”12 Trotman's requested charge was as follows:
Although a finding of actual confusion [in the marketplace] is not necessary to prove a
likelihood of confusion, it is nevertheless the best evidence of a likelihood of confusion.
Coexistence in the marketplace over a significant period of time with no evidence of
actual confusion raises a presumption against a likelihood of confusion; however, the
presumption may be rebutted by evidence of other factors tending to support a finding of
a likelihood of confusion.
As support, Trotman relies on Ackerman Security Systems, Inc. v. Design Security
Systems, Inc.,13 which included the following language: “In the case at hand, the trial
court ․ incorrectly applied the likelihood of confusion test by requiring a showing of
actual confusion․ Although evidence of actual confusion is obviously the best evidence
of a likelihood of confusion, it is not necessary to a finding of likelihood of confusion.”14
The emphasized portion of this statement was dicta and not a statement of settled law;15
thus the requested charge was not entirely correct and accurate. Further, the trial court
correctly charged the jury as to the settled law stated in Ackerman, i.e., that actual
confusion in the marketplace need not be shown. We discern no reversible error here.16
Case No. A11A0403
4. CertiFi contends that the evidence was insufficient to support the jury's verdict on the
conversion claim, which was predicated on Trotman's use of Velociteach training
materials. Specifically, CertiFi argues that because Trotman's confidentiality agreement
required him to return or destroy any training materials, Velociteach had abandoned
them, which would preclude a conversion claim due to an absence of Velociteach's right
of possession.17 The confidentiality agreement does not evince an intent to abandon the
property, however; instead, it shows Velociteach's attempt to remain in exclusive control
and possession of its confidential information. This is wholly consistent with the
21

23. conversion claim because it shows that Trotman's retention and use of the materials was
unauthorized: “The very essence of conversion is that the [defendant's] act of dominion is
wrongfully asserted.”18
CertiFi also argues that the intangible teaching materials on the laptop were not “novel”
and therefore not subject to a conversion claim.19 Nevertheless, this argument is belied by
the evidence that the methodology and teaching concepts reflected in the Velociteach
course materials were originated by and exclusive to Velociteach. Accordingly, this
enumeration presents no basis for reversal.
5. CertiFi also challenges the sufficiency of the evidence as to the value element of
Velociteach's unjust enrichment claim. CertiFi relies on Phoenix Airline Svcs. v. Metro
Airlines,20 which is physical precedent only21 and states that if “an award of monetary
damages is made for unjust enrichment, it must, of course, be supported by evidence
from which it can be determined to a reasonable certainty that the defendants in fact
realized such a gain.”22 Here, there was evidence that Trotman had unsuccessfully
requested to purchase instruction kits from Velociteach, and that the kits were valued at
$1,000 each. Thus, the jury could conclude that Trotman avoided paying $1,000 in cost
for each kit he used to teach CertiFi students. CertiFi does not dispute that Trotman
taught more than 300 students on its behalf. This evidence authorized the jury's damages
award.23
6. CertiFi also challenges the trial court's award of $30,000 in attorney fees under OCGA
§ 9–15–14(b) based on its finding that the defendants unnecessarily expanded the
proceeding. That Code section authorizes an attorney fee award based on conduct
“including, but not limited to, abuses of discovery procedures․”24 Here, the trial court
cited a series of orders granting Velociteach's motion to compel, prohibiting the use of
certain teaching slides, granting a motion for contempt, and ordering production of
documents—all of which were the product of Trotman's and CertiFi's resistance to
discovery and failure to cooperate with court orders.
Based on this behavior, the trial court did not abuse its discretion by awarding attorney
fees under OCGA § 9–14–15(b),25 but the trial court's order fails to show how it
apportioned its award to fees generated based on sanctionable behavior. “As we have
held in cases involving OCGA § 9–15–14(a) or (b), the trial court must limit the fees
award to those fees incurred because of the sanctionable conduct. [Thus,] ‘[l]ump sum’ or
unapportioned attorney fees awards are not permitted in Georgia.”26 Velociteach's
counsel submitted an affidavit with billing statements totaling $95,974.66. The trial
court's award of $30,000 may have been reasonable, but the trial court's order, “on its
face ․ fails to show the complex decision making process necessarily involved in
reaching a particular dollar figure and fails to articulate why the amount awarded was
$[3]0,000 as opposed to any other amount.”27 Accordingly, we must vacate the award and
remand for appropriate fact finding with respect to the amount of attorney fees to be
assessed.28
22

24. 7. (a) CertiFi contends that the trial court erred by failing to give its requested jury charge
on waiver with respect to the conversion claim. However, in light of our holding in
Division 4, that the confidentiality agreement did not evince Velociteach's abandonment
or waiver of its right to exclusively possess its course materials, this charge was not
authorized by the evidence.29
(b) CertiFi also asserts as error the trial court's failure to give its requested jury charge on
apportionment of damages under OCGA § 51–12–33, in light of evidence that Trotman
had another Velociteach employee help him make revisions to the Velociteach teaching
materials and that he hired a marketing firm to edit Velociteach presentation slides and
“put some lipstick on” a chart in a Velociteach workbook. Nevertheless, “[a] trial court
does not err in refusing to give a requested charge which is confusing, misleading, inapt,
not precisely tailored or adjusted to the evidence, or not authorized by the evidence.”30 At
trial, Trotman explained that he was personally responsible for the content of the
revisions to the teaching materials and he did not assign any blame to his fellow
employee or the marketing firm he hired. Further, the evidence is undisputed that he
alone was responsible for using the materials for teaching. Based on the record before us,
we discern no reversible error in the trial court's failure to give the requested charge.31
8. CertiFi challenges the trial court's exclusion of certain testimony that Crowe, the
founder of Velociteach, was motivated by racial bias when he terminated Trotman.
Specifically, CertiFi proffered testimony from a Velociteach employee who heard Crowe
use racially derogatory language in reference to Trotman.32 The trial court sustained
Velociteach's objection to the testimony on relevance grounds.
The decision to admit or exclude evidence is committed to the sound discretion of the
trial court and will not be disturbed on appeal absent a clear abuse of discretion. When an
issue is raised whether the probative value of evidence is outweighed by its tendency to
unduly arouse the jury's emotions of prejudice, hostility, or sympathy, a trial court's
decision regarding admissibility is a matter of discretion. Further, a trial court may
exclude relevant evidence if its probative value is substantially outweighed by the danger
of unfair prejudice, confusion of the issues, or misleading of the jury.33
Here, the issues at trial centered on the similarity between the teaching material used by
Trotman/CertiFi to that created by Crowe/Velociteach and Trotman's authority to use
them after his termination. The proffered witness stated that any derogatory statements
made by Crowe were not in connection with Crowe's termination of Trotman, who had
received favorable evaluations prior to the events leading up to his termination, i.e., the
lapse in Trotman's PMP credentials and his misuse of the company credit card. Based on
the record before us and the inflamatory nature of the proffered evidence, we discern no
clear abuse of the trial court's discretion.34
9. Finally, CertiFi attempts to incorporate by reference to its brief in the companion case
an argument challenging the sufficiency of the evidence to show that it tortiously
interfered with Velociteach's business relationships or contracts. This enumeration was
not otherwise supported by argument or citation to authority.35 Nevertheless, we note that
23

25. during his tenure at Velociteach, Trotman had taught classes to students from a company
called Axiom, including one class shortly before his termination. Shortly after his
termination, Trotman solicited Axiom on behalf of CertiFi based on his prior contact with
them, and Axiom employed CertiFi and declined to employ Velociteach. Crowe,
Velociteach's founder testified as to the loss of Axiom as a paying client. Thus, this
enumeration is without merit.36
10. CertiFi and Trotman's remaining enumerations are moot.
24

26. A Dispute Over Who Owns a Twitter Account Goes to
Court (NEW YORK TIMES)
By JOHN BIGGS
Published: December 25, 2011
How much is a tweet worth? And how much does a Twitter follower cost?
Enlarge This Image
In base economic terms, the value of individual Twitter updates seems to be
negligible; after all, what is a Twitter post but a few bits of data sent caroming
through the Internet? But in a world where social media’s influence can mean the
difference between a lucrative sale and another fruitless cold call, social media
accounts at companies have taken on added significance.
The question is: Can a company cash in on, and claim ownership of, an employee’s
social media account, and if so, what does that mean for workers who are
increasingly posting to Twitter, Facebook and Google Plus during work hours?
A lawsuit filed in July could provide some answers.
In October 2010, Noah Kravitz, a writer who lives in Oakland, Calif., quit his job at a
popular mobile phone site, Phonedog.com, after nearly four years. The site has two
parts — an e-commerce wing, which sells phones, and a blog.
While at the company, Mr. Kravitz, 38, began writing on Twitter under the name
Phonedog_Noah, and over time, had amassed 17,000 followers. When he left, he
said, PhoneDog told him he could keep his Twitter account in exchange for posting
occasionally.
The company asked him to “tweet on their behalf from time to time and I said sure,
as we were parting on good terms,” Mr. Kravitz said by telephone.
And so he began writing as NoahKravitz, keeping all his followers under that new
handle. But eight months after Mr. Kravitz left the company, PhoneDog sued, saying
the Twitter list was a customer list, and seeking damages of $2.50 a month per
follower for eight months, for a total of $340,000.
25

27. PhoneDog Media declined to comment for this article except for this statement: “The
costs and resources invested by PhoneDog Media into growing its followers, fans and
general brand awareness through social media are substantial and are considered
property of PhoneDog Media L.L.C. We intend to aggressively protect our customer
lists and confidential information, intellectual property, trademark and brands.”
Mr. Kravitz said the lawsuit, filed in the United States District Court in the Northern
District of California, was in retaliation for his claim to 15 percent of the site’s gross
advertising revenue because of his position as a vested partner, as well as back pay
related to his position as a video reviewer and blogger for the site.
The lawsuit, though, could have broader ramifications than its effect on Mr. Kravitz
and the company.
“This will establish precedent in the online world, as it relates to ownership of social
media accounts,” said Henry J. Cittone, a lawyer in New York who litigates
intellectual property disputes. “We’ve actually been waiting to see such a case as
many of our clients are concerned about the ownership of social media accounts vis-
á-vis their branding.”
Mr. Cittone added that a particularly important wrinkle is what value the court might
set on the worth of one Twitter follower to a media company, saying the price set
could affect future cases involving ownership of social media.
“It all hinges on why the account was opened,” he said.
“If it was to communicate with PhoneDog’s customers or build up new customers or
prospects, then the account was opened on behalf of PhoneDog, not Mr. Kravitz. An
added complexity is that PhoneDog contends Mr. Kravitz was just a contractor in the
related partnership/employment case, thus weakening their trade secrets case,
unless they can show he was contracted to create the feed.”
These situations are likely to arise more often as social media tools like Twitter,
Google Plus and Facebook continue to become a way for company representatives
and customer service employees to interact with fans and irate customers.
JetBlue, for example, often answers customer queries via Twitter, although its official
policy is to not respond to “formal complaints” on Twitter.
26

28. Other issues may arise when companies hire popular Twitter users partly because of
their social media presence. For example, Samsung Electronics hired the outspoken
blogger Philip Berne to review phones for the company internally.
Mr. Berne uses his personal Twitter account but often posts explicitly about Samsung
products and his opinions on the phones he has tested. He cleared his Twitter
account with the Samsung public relations department, he said, and he owns it.
“Their stance was that I am entitled to have and express an opinion, but I am not a
Samsung representative, and I should make it clear that any opinions are my own
and not those of my employer,” Mr. Berne said. In general, social media experts
advise companies to tread with caution when it comes to account ownership.
Sree Sreenivasan, a professor at the Columbia Journalism School and the author of
Sree’s Social Media Guide, said smart companies let social media blossom where it
may.
“It’s a terrible thing to say you have to leave your Twitter followers behind,” he said,
talking specifically about media companies that may employ popular Twitter writers.
“It sends a terrible signal to reporters and journalists who care about this, and this
will make it less attractive to recruit the next round of people.”
He said that many industries had policies that required sales staff to leave their
Rolodexes behind, but that these policies were as relevant to social media as
Rolodexes are to the modern office. After all, social media accounts are, almost by
definition, personal.
He also said that the average Twitter account had less clout than many might think.
“The value of the individual users is very hard to quantify,” he said. “It’s dangerous to
overestimate the value of an account to an organization and underestimate what it
means for an individual.”
Mr. Kravitz said he was confused.
“They’re suing me for over a quarter of a million dollars,” he said. “From where I’m
sitting I held up my end of the bargain.”
27

29. 28

30. House Bill 718
By: Representatives Peake of the 137th, Lindsey of the 54th, Sheldon of the
105th, Stephens
of the 164th, Williamson of the 111th, and others
A BILL TO BE ENTITLED AN ACT
1 To amend Chapter 7 of Title 50 of the Official Code of Georgia Annotated,
relating to the
2 Department of Economic Development, so as to create the Georgia Capital
Acceleration
3 Authority; so as to provide for legislative findings; to provide for definitions; to
provide for
4 a program administrator; to provide for the issuance of premium tax credits to
insurance
5 companies or holding companies that purchase such credits to offset liability for
state
6 insurance premium taxes; to provide for reports; to provide for related matters;
to provide for
7 an effective date; to repeal conflicting laws; and for other purposes.
8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
9 SECTION 1.
10 Chapter 7 of Title 50 of the Official Code of Georgia Annotated, relating to the
Department
11 of Economic Development, is amended by adding a new article, to read as
follows:
12 "ARTICLE 8
13 50-7-90.
14 The General Assembly declares that its purpose in enacting this legislation is to
increase
15 the amount of private investment capital available in this state for Georgia
based business
16 enterprises in the seed, early, or growth stages of business development and
requiring
17 funding, as well as established Georgia based business enterprises developing
new methods
18 or technologies, including the promotion of research and development
purposes, thereby
29

31. 19 increasing employment, creating additional wealth, and otherwise benefiting
the economic
20 welfare of the people of this state. Accordingly, it is the intention of the
General Assembly
21 that the Georgia Capital Acceleration Authority make investments in support of
Georgia
22 based business enterprises in accordance with the investment policy authorized
and
23 required under this article and focus its investment policy principally on
venture capital
24 funds and private equity organizations investing in Georgia based business
enterprises.
25 50-7-91.
26 As used in this article, the term:
27 (1) 'Affiliate' means:
28 (A) A person who, directly or indirectly, beneficially owns, controls, or holds
power
29 to vote any outstanding voting securities or other voting ownership interests of
a
30 venture firm or an insurance company; or
31 (B) A person whose outstanding voting securities or other voting ownership
interests
32 are directly or indirectly beneficially owned, controlled, or held with power to
vote by
33 a venture firm or an insurance company.
34 The term does not include an insurance company that becomes a purchaser in
accordance
35 with an allocation of investment tax credits under this article solely by reason
of the
36 allocation.
37 (2) 'Authority' means the Georgia Capital Acceleration Authority created under
Code
38 Section 50-7-92.
39 (3) 'Contributed capital' means the amount of money contributed to the Georgia
Capital
40 Acceleration Fund for the purchase of insurance premium tax credits.
41 (4) 'Department' means the Department of Economic Development.
42 (5) 'Designated capital' means the amount of money committed and invested by
the
43 Georgia Capital Acceleration Fund into individual early stage venture capital
funds or
30

32. 44 growth stage venture capital funds.
45 (6) 'Early stage venture capital fund' means:
46 (A) A fund that has at least one principal employed to direct the investment of
the
47 designated capital;
48 (B) A fund whose principals have at least five years of experience in the
venture
49 capital, angel capital, or private equity sector by investing primarily in Georgia
50 domiciled companies or a fund whose managers have been based, as defined by
having
51 a principal office, in the State of Georgia for at least five years prior to the
effective
52 date of this article;
53 (C) At the discretion of the program administrator and the authority, one or
more early
54 stage venture capital funds that are first-time Georgia based funds, so long as
the fund
55 managers have at least five years of experience in venture capital or angel
capital
56 investing in Georgia based business enterprises; and
57 (D) A fund of which the primary investment strategy must be the achievement
of
58 transformational economic development outcomes through focused
investments of
59 capital in seed or early stage businesses with high growth potential. The fund
principals
60 must have demonstrated the ability to lead investment rounds, advise and
mentor
61 entrepreneurs, and facilitate follow-on investments. A minimum of 10 percent
of the
62 committed capital of the fund must be committed by the institutional investors,
fund
63 principals, or other accredited investors.
64 (7) 'Growth stage venture capital fund' means:
65 (A) A fund having its principal office and a majority of its employees in
Georgia that
66 has at least two principals employed to direct the investment of the designated
capital:
67 (B) A fund whose principals have at least five years of experience in the
venture
68 capital, angel capital, or private equity sector by investing primarily in Georgia
69 domiciled companies or a fund whose principals have been based, as defined
by having
31

33. 70 a principal office, in the State of Georgia for at least five years prior to the
effective
71 date of this article; and
72 (C) A fund which has as its primary investment strategy the achievement of
73 transformational economic development outcomes through focused
investments of
74 capital in growth stage businesses with high return potential. The fund
principals must
75 have demonstrated the ability to lead investment rounds, advise and mentor
76 entrepreneurs, and facilitate follow-on investments. A minimum of 50 percent
of the
77 committed capital of the fund must be committed by the institutional investors,
fund
78 principals, or other accredited investors.
79 (8) 'Insurance premium tax credit' means a credit against insurance premium
tax liability
80 offered to a purchaser under Code Section 50-7-98.
81 (9) 'Insurance premium tax liability' means any liability incurred under Code
Sections
82 33-3-26 and 33-8-4; provided, however, that any insurance premium tax
liability incurred
83 under the provisions of Code Section 47-7-61, relating to fire, lightning, or
extended
84 coverage, inland marine or allied lines, or windstorm coverage, shall not be
offset by any
85 insurance premium tax credits issued under this article.
86 (10) 'Program administrator' means a state appointed investment advisory firm
consisting
87 of experienced investment professionals that will actively pursue investment
88 opportunities for the State of Georgia. The investment advisory firm will
evaluate and
89 select Georgia based venture capital funds, in conjunction with the Georgia
Capital
90 Acceleration Authority, through a rigorous due diligence process.
91 (11) 'Purchaser' means:
92 (A) An insurance company that:
93 (i) Is authorized to do business in Georgia;
94 (ii) Has insurance premium tax liability; and
95 (iii) Pays contributed capital to purchase an allocation of premium tax credits
under
96 this article; or
97 (B) A holding company that:
98 (i) Has at least one insurance company subsidiary authorized to do business in
32

34. 99 Georgia; and
100 (ii) Pays contributed capital on behalf of one or more of these subsidiaries.
101 (12) 'Qualified distribution' means any distribution or payment by the Georgia
Capital
102 Acceleration Fund in connection with any of the following:
103 (A) Costs and expenses of forming, syndicating, and organizing the Georgia
Capital
104 Acceleration Fund, including fees paid for professional services, and the costs
of
105 financing and insuring the obligations of the Georgia Capital Acceleration
Fund,
106 provided such payments are not made to a participating investor;
107 (B) An annual management fee in accordance with a fund's partnership
agreement and
108 consistent with the fund's other private investors, to offset the costs and
expenses of
109 managing and operating the Georgia Capital Acceleration Fund; or
110 (C) Reasonable and necessary fees in accordance with industry custom for
ongoing
111 professional services, including, but not limited to, legal and accounting
services related
112 to the operation of the Georgia Capital Acceleration Fund, but not including
any
113 lobbying or governmental relations.
114 (13) 'Qualified early stage' or 'seed' business means a business that, at the time
of the
115 first investment in the business by a venture firm:
116 (A) Has its headquarters located in the State of Georgia;
117 (B) Has its principal business operations located in the State of Georgia and
intends to
118 maintain its principal business operations in the state after receiving an
investment from
119 the venture capital firm. In order to discourage the business from relocating
outside
120 Georgia within three years from the date of an initial investment, the
investment in the
121 business shall be subject to redemption by the venture capital firm within one
year from
122 the time the business relocates its principal business operations outside the
state, unless
123 the business maintains a significant presence in Georgia as determined by
relative
33

35. 124 number of employees or relative assets remaining in Georgia following the
relocation;
125 (C) Has 20 or fewer employees;
126 (D) Has a current gross annual revenue run rate of less than $1 million;
127 (E) Has not obtained during its existence more than $2 million in aggregate
cash
128 proceeds from the issuance of its equity or debt investments, not including
commercial
129 loans from chartered banks or savings and loan institutions; and
130 (F) Does not engage substantially in:
131 (i) Retail sales;
132 (ii) Real estate development or construction;
133 (iii) Entertainment, amusement, recreation, or athletic or fitness activity for
which an
134 admission is charged;
135 (iv) The business of insurance, banking, lending, financial, brokerage, or
investment
136 activities;
137 (v) Natural resource extraction, including but not limited to oil, gas, or
biomass; or
138 (vi) The provision of professional services by accountants, attorneys, or
physicians.
139 A business classified as a qualified early stage business at the time of the first
qualified
140 investment in the business will remain classified as a qualified early stage
business and
141 may receive continuing qualified investments from venture capital firms
participating in
142 the Georgia Capital Acceleration Fund. Continuing investments will constitute
qualified
143 investments even though the business may not meet the definition of a
qualified early
144 stage business at the time of such continuing investments.
145 (14) 'Qualified growth stage business' means a business that, at the time of the
first
146 investment in the business by a venture firm:
147 (A) Has its headquarters located in the State of Georgia;
148 (B) Is either a corporation, limited liability company, or a general or limited
149 partnership located in this state;
150 (C) Has its principal business operations located in the State of Georgia and
intends to
151 maintain its principal business operations in the state after receiving an
investment from
34

36. 152 the venture capital firm. In order to discourage the business from relocating
outside
153 Georgia within three years from the date of initial investment, the investment
in the
154 business shall be subject to redemption by the venture capital firm within one
year from
155 the time the business relocates its principal business operations outside the
state, unless
156 the business maintains a significant presence in Georgia as determined by
relative
157 number of employees or relative assets remaining in Georgia;
158 (D) Has 100 or fewer employees;
159 (E) Has a current gross annual revenue run rate of greater than $1 million; and
160 (F) Does not engage substantially in:
161 (i) Retail sales;
162 (ii) Real estate development or construction;
163 (iii) Entertainment, amusement, recreation, or athletic or fitness activity for
which an
164 admission is charged;
165 (iv) The business of insurance, banking, lending, financial, brokerage, or
investment
166 activities;
167 (v) Natural resource extraction, including but not limited to oil, gas, or
biomass; or
168 (vi) The provision of professional services by accountants, attorneys, or
physicians.
169 A business classified as a qualified growth stage business at the time of the
first qualified
170 investment in the business will remain classified as a qualified growth stage
business and
171 may receive continuing qualified investments from venture capital funds
participating in
172 the Georgia Capital Acceleration Fund. Continuing investments will constitute
qualified
173 investments even though the business may not meet the definition of a
qualified growth
174 stage business at the time of such continuing investments.
175 (15) 'Qualified investment' means the investment of money by the Georgia
Capital
176 Acceleration Fund in each early or growth stage venture capital fund selected
by the
177 program administrator.
35

37. 178 50-7-92.
179 (a) There is hereby created the Georgia Capital Acceleration Authority, which
shall
180 exercise the powers and perform the duties prescribed by this article. The
exercise by the
181 authority of its powers and duties is hereby declared to be an essential state
governmental
182 function. The authority is subject to all laws generally applicable to state
agencies and
183 public officials, to the extent those laws do not conflict with the provisions of
this article.
184 (b) The authority shall consist of three members appointed by the Governor,
one member
185 appointed by the Lieutenant Governor, and one member appointed by the
Speaker of the
186 House of Representatives. Each appointed member shall be a resident of
Georgia and shall
187 have experience in at least one of the following areas:
188 (1) Early stage, angel, or venture capital investing;
189 (2) Growth stage venture capital investing;
190 (3) Fund of funds management; or
191 (4) Entrepreneurship.
192 No member of the authority shall be affiliated in any way with any venture
capital fund that
193 is selected to perform services for the authority.
194 (c) The commissioner of economic development, revenue commissioner, and
Insurance
195 Commissioner or their designees shall serve as nonvoting members of the
authority.
196 (d) Initial appointees to the authority shall serve staggered terms, with all of
the initial
197 terms beginning on January 1, 2013. The terms of one member appointed by
the Governor
198 and the members appointed by the Lieutenant Governor and the Speaker of
the House of
199 Representatives shall expire on December 31, 2015. The terms of the other
two initial
200 appointments by the Governor shall expire on December 31, 2017. Thereafter,
terms of
201 office for all appointees shall be for four years, with each term ending on the
same day of
36

38. 202 the same month as did the term that it succeeds. A vacancy on the authority
shall be filled
203 in the same manner as the original appointment, except that a person
appointed to fill a
204 vacancy shall be appointed to the remainder of the unexpired term. Any
appointed member
205 of the authority is eligible for reappointment.
206 (e) A member of the authority may be removed by the member's appointing
official for
207 misfeasance, willful neglect of duty, or other cause, after notice and a public
hearing,
208 unless the notice and hearing are waived in writing by the member.
209 (f) Members of the authority shall serve without compensation, The Governor
shall
210 designate a member of the authority to serve as chairperson. A majority of the
voting
211 members of the authority constitutes a quorum, and the affirmative vote of a
majority of
212 the voting members present is necessary for any action taken by the authority.
A vacancy
213 in the membership of the authority does not impair the right of a quorum to
exercise all
214 rights and perform all duties of the authority.
215 (g) The authority shall have the power:
216 (1) To have a seal and alter the same at its pleasure;
217 (2) To acquire by purchase, lease, or otherwise, including acquisition of land
from the
218 state government, and to hold, lease, and dispose of real and personal property
of every
219 kind and character for its corporate purpose and to enter into any contracts,
leases, or
220 other charges for the use of property or services of the authority and collect
and use the
221 same as necessary to operate the authority; and to accomplish any of the
purposes of this
222 article and make any purchases or sales necessary for such purposes;
223 (3) To acquire in its own name by purchase, on such terms and conditions and
in such
224 manner as it may deem proper, real property, or rights or easements therein, or
franchises
225 necessary or convenient for its corporate purpose, and to use the same so long
as its
37

39. 226 corporate existence shall continue, and to lease or make contracts with respect
to the use
227 of such property, or dispose of the same in any manner it deems to be to the
best
228 advantage of the authority;
229 (4) To appoint, select, and employ officers, agents, and employees, including
real estate,
230 environmental, engineering, architectural, and construction experts, fiscal
agents, and
231 attorneys, and to fix their respective compensations;
232 (5) To make contracts and leases and to execute all instruments necessary or
convenient.
233 Any and all persons, firms, and corporations and any and all political
subdivisions,
234 departments, institutions, or agencies of the state and federal government are
authorized
235 to enter into contracts, leases, or agreements with the authority upon such
terms and for
236 such purposes as they deem advisable; and, without limiting the generality of
the
237 foregoing, authority is specifically granted to municipal corporations,
counties, political
238 subdivisions, and to the authority relative to entering into contracts, lease
agreements, or
239 other undertakings authorized between the authority and private corporations,
both inside
240 and outside this state, and between the authority and public bodies, including
counties
241 and cities outside this state and the federal government;
242 (6) To accept loans and grants of money or materials or property of any kind
from the
243 United States of America or any agency or instrumentality thereof upon such
terms and
244 conditions as the United States of America or such agency or instrumentality
may
245 require;
246 (7) To accept loans and grants of money or materials or property of any kind
from the
247 State of Georgia or any agency or instrumentality or political subdivision
thereof upon
248 such terms and conditions as the State of Georgia or such agency or
instrumentality or
249 political subdivision may require;
38

40. 250 (8) To exercise any power usually possessed by private corporations
performing similar
251 functions, provided that no such power is in conflict with the Constitution or
general laws
252 of this state; and
253 (9) To do all things necessary or convenient to carry out the powers expressly
given in
254 this article.
255 (h) The department shall provide the authority with office space and such
technical
256 assistance as the authority requires and the authority shall be attached to the
department for
257 administrative purposes. The department shall also consult with the authority
in connection
258 with the administration of the Georgia Capital Acceleration Program created
under this
259 article.
260 50-7-93.
261 The authority's primary responsibilities include:
262 (1) Establishing an investment policy for the selection of a program
administrator;
263 (2) Selecting a program administrator to administer the provisions of this
article;
264 (3) Giving final approval to allocations of designated capital to the venture
capital funds
265 selected by the program administrator;
266 (4) Executing and overseeing the contract of the program administrator in
order to assure
267 compliance with this article; and
268 (5) Establishing a policy with respect to use of capital and profits returned to
the state
269 pursuant to the provisions of Code Section 50-7-102.
270 50-7-94.
271 (a) The program administrator will be selected by the authority through a
transparent open
272 bid process and will be responsible for administering the Georgia Capital
Acceleration
273 Fund and for making all venture capital fund selections in accordance with the
investment
274 policies developed by the authority or contained in this article.
39

41. 275 (b) The program administrator will be responsible for selecting a group of
Georgia based
276 venture capital funds in two categories, early or seed stage venture capital
funds and
277 growth stage venture capital funds.
278 (c) The early stage venture capital funds shall invest primarily in early or seed
stage
279 businesses and shall be selected using a transparent open bid process pursuant
to guidelines
280 developed by the authority. The program administrator shall ensure that a
diverse
281 cross-section of industry sectors is represented by the selected funds,
including technology,
282 health care, life sciences, agribusiness, logistics, energy, and advanced
manufacturing.
283 (d) The growth stage venture capital funds shall be selected using a
transparent open bid
284 process pursuant to guidelines developed by the authority. The program
administrator shall
285 ensure that a diverse cross-section of industry sectors is represented by the
selected funds,
286 including technology, health care, life sciences, agribusiness, logistics,
energy, and
287 advanced manufacturing.
288 (e) In the selection of the early stage venture capital funds and the growth
stage venture
289 capital funds the program administrator shall consider the following factors:
290 (1) The management structure of the fund, including:
291 (A) The investment experience of the principals;
292 (B) The applicant's reputation in the venture firm industry and the applicant's
ability
293 to attract coinvestment capital and syndicate investments in qualified
businesses in
294 Georgia;
295 (C) The knowledge, experience, and capabilities of the applicant in subject
areas
296 relevant to venture stage businesses in Georgia; and
297 (D) The tenure and turnover history of principals and senior investment
professionals
298 of the fund;
299 (2) The fund's investment strategy, including:
300 (A) The applicant's record of performance in investing in early and growth
stage
40

42. 301 businesses;
302 (B) The applicant's history of attracting coinvestment capital and syndicate
303 investments;
304 (C) The soundness of the applicant's investment strategy and the compatibility
of that
305 strategy with business opportunities in Georgia; and
306 (D) The applicant's history of job creation through investment;
307 (3) The fund's commitment to making investments, that to the fullest extent
possible:
308 (A) Create employment opportunities in Georgia;
309 (B) Lead to the growth of the Georgia economy and qualified businesses in
Georgia;
310 (C) Complement the research and development projects of Georgia academic
311 institutions; and
312 (D) Foster the development of technologies and industries that present
opportunities
313 for the growth of qualified businesses in Georgia; and
314 (4) The fund's commitment to Georgia, including:
315 (A) The applicant's presence in Georgia through permanent local offices or
affiliation
316 with local investment firms;
317 (B) The local presence of senior investment professionals;
318 (C) The applicant's history of investing in early and growth stage businesses
in
319 Georgia;
320 (D) The applicant's ability to identify investment opportunities through
working
321 relationships with Georgia research and development institutions and Georgia
based
322 businesses; and
323 (E) The applicant's commitment to investing an amount that matches or
exceeds the
324 amount of the applicant's designated capital received under this article, in
Georgia
325 based qualified early stage businesses and qualified growth stage businesses.
326 (f) A venture capital fund shall file an application with the authority in the
form required
327 by the program administrator. The authority shall begin accepting applications
on or
328 before September 1, 2012.
329 50-7-95.
41

43. 330 (a) The Georgia Capital Acceleration Fund will be capitalized through state
insurance
331 premium tax credits. The State of Georgia will sell tax credits to purchasers,
pursuant to
332 the provisions of this article, and the tax credits shall be used to offset the
purchasers' state
333 insurance premium tax liability.
334 (b) The capital raised through the auction of insurance premium tax credits
will be
335 periodically distributed to the venture capital funds selected by the program
administrator
336 pursuant to Code Section 50-7-94.
337 (c) Each year the purchasers shall be issued a tax credit certificate by the
authority.
338 (d) Purchasers will be able to claim their tax credits pursuant to the provisions
of Code
339 Section 50-7-98.
340 50-7-96.
341 (a) The State of Georgia will sell a maximum of $200 million in insurance
premium tax
342 credits over a three-year period through an auction process administered by
the program
343 administrator pursuant to guidelines developed by the authority. The $200
million in
344 insurance premium tax credits will be auctioned in the first year of the
Georgia Capital
345 Acceleration Program, and the purchasers will be obligated to pay the
purchase amount to
346 the authority for deposit in the Georgia Capital Acceleration Fund in three
equal amounts
347 over the three-year period.
348 (b) The program administrator shall obtain the services of an independent
third party to
349 conduct the bidding process to secure purchasers for the capital acceleration
program.
350 (c) Using the procedures adopted by the independent third party, each
potential purchaser
351 shall make a timely and irrevocable offer, subject only to the authority's
issuance to the
352 purchaser of tax credit certificates, to make specified contributions of
designated capital
353 to the authority on the dates specified in Code Section 50-7-98.
42

44. 354 (d) The offer shall include:
355 (1) The requested amount of tax credits, which may not be less than $5
million;
356 (2) The potential purchaser's specified contribution for each tax credit dollar
requested,
357 which may not be less than the greater of:
358 (A) Eighty-five percent of the requested dollar amount of tax credits; or
359 (B) The percentage of the requested dollar amount of tax credits that the
program
360 administrator, on the recommendation of the independent third party,
determines to be
361 consistent with market conditions as of the offer date; and
362 (3) Any other information the independent third party requires.
363 (e)(1) The deadline for submission of applications for tax credits is February
1, 2013.
364 (2) Each potential purchaser shall receive a written notice from the program
365 administrator not later than May 1, 2013, indicating whether or not it has been
approved
366 as a purchaser and, if so, the amount of tax credits allocated.
367 50-7-97.
368 (a) As soon as practicable after the authority receives each installment of
contributed
369 capital, the authority and each selected venture capital fund that has been
allocated
370 designated capital shall enter into a contract under which the allocated amount
of
371 designated capital will be committed by the authority to the selected venture
capital funds
372 for investment pursuant to this article.
373 (b) The authority shall allocate designated capital as follows:
374 (1) Early stage venture capital funds: Thirty percent of the contributed capital
in the
375 Georgia Capital Acceleration Fund shall be allocated among the early stage
venture
376 capital funds, in accordance with the following eligibility and requirements:
377 (A) Each early stage venture capital fund shall be eligible for a minimum $10
million
378 allocation of designated capital and a maximum $15 million allocation to be
contributed
379 to the funds over a three-year period coinciding with the sale of the tax credits
or in
43

45. 380 accordance with the fund's partnership agreement and concurrent with the
contributions
381 of the fund's other investors;
382 (B) Each early stage venture capital fund shall be required to obtain other
independent
383 investors. A minimum of 10 percent of the committed capital of the early
stage venture
384 capital fund must be committed by independent institutional investors, fund
principals,
385 or other accredited investors; and
386 (C) Each early stage venture capital fund shall be required to commit, via a
side letter
387 or otherwise, to invest in Georgia based qualified early stage businesses and
qualified
388 growth stage businesses, an amount that matches or exceeds the amount of the
fund's
389 designated capital received under this article;
390 (2) Growth stage venture capital funds: Seventy percent of the total
contributed capital
391 in the Georgia Capital Acceleration Fund shall be allocated among the growth
stage
392 venture capital funds, in accordance with the following eligibility and
requirements:
393 (A) Each growth stage venture capital fund shall be eligible for a minimum
$10 million
394 allocation of designated capital over a three-year period coinciding with the
sale of the
395 tax credits or in accordance with the fund's partnership agreement and
concurrent with
396 the contributions of the fund's other investors;
397 (B) Each growth stage venture capital fund shall be required to obtain other
398 independent investors. A minimum of 50 percent of the committed capital of
the growth
399 stage venture capital fund must be committed by independent institutional
investors,
400 fund principals, or other accredited investors; and
401 (C) Each growth stage venture capital fund shall be required to commit, via a
side letter
402 or otherwise, to invest in Georgia based qualified early stage businesses and
qualified
403 growth stage businesses, an amount that matches or exceeds the amount of the
fund's
404 designated capital received under this article; and
44