(a) The center, subject to the approval of the board or its designee, may authorize transfers from the fund to make equity contributions through the direct purchase of qualified securities of enterprises, subject to the center assuring itself that the following conditions will be satisfied:

(1) At least $3.00 of equity contributions has been committed in writing to the enterprise by persons other than the state for every $1.00 of equity contributions committed by the state from the fund to the enterprise;

(2) The center shall manage the investments of equity contributions in the qualified securities of enterprises so that the state shall not hold voting control of an enterprise;

(3) The total amount of equity contributions by the state made to an enterprise that originate from the fund, either directly or indirectly through an investment entity as permitted by subsections (b) and (c) of this Code section, and that are invested in qualified securities of an enterprise should ordinarily be no more than $1 million. Total equity contributions from the fund to an enterprise, directly or indirectly through an investment entity, may be greater than $1 million if, in the judgment of the center, the enterprise is in severe financial difficulty and an investment of a greater amount is necessary to preserve the initial investment in qualified securities;

(4) The amount of investment, directly or indirectly through an investment entity, by the fund in qualified securities issued by an enterprise should ordinarily not represent more than 49 percent of the enterprise's total qualified securities outstanding at the time such qualified securities are purchased by the fund, after giving effect to the conversion of all outstanding convertible qualified securities of the enterprise. An investment of an equity contribution from the fund may exceed 49 percent of the enterprise's total qualified securities outstanding if:

(A) In the case of direct investment, in the center's judgment, such greater investment is prudent; or

(B) In the case of indirect investment in the investment entity's judgment exercised in accordance with paragraph (5) of subsection (b) of this Code section, such greater investment is prudent;

(5) The center shall invest equity contributions in qualified securities of enterprises engaged in an entrepreneurial business only after receipt of an application from the enterprise that contains:

(A) A business plan including pro forma financial statements and a description of the enterprise and its management, product, and market;

(B) A statement of the amount, timing, and projected use of the capital required;

(C) A statement of the potential economic impact of the enterprise, including the number, location, and types of jobs expected to be created; and

(D) Such other information as the center shall request; and

(6) Approval of an equity contribution may be made after the center finds, based upon the application submitted by the enterprise and such additional investigation as the staff of the center shall make and incorporate in its records, that:

(A) The proceeds of the investment or financial assistance will be used only to cover the seed-capital needs of the enterprise except as authorized by paragraph (2) of this subsection;

(B) The enterprise has a reasonable chance of success;

(C) The fund's participation is instrumental to the success of the enterprise and its retention within the state;

(D) The enterprise has the reasonable potential to enhance employment opportunities within the state;

(E) The entrepreneur and other founders of the enterprise have already made or are contractually committed to make a substantial financial or time commitment to the enterprise;

(F) Any securities to be purchased are qualified securities;

(G) There is a reasonable possibility that the fund will recoup at least its initial investment or financial commitment; and

(H) Binding commitments have been made to the state by the enterprise for adequate reporting of financial data to the center, which shall include a requirement for an annual report or, if required by the center, an annual audit of the financial and operational records of the enterprise, and for such control on the part of the investment entity as considered prudent, over the management of the enterprise so as to protect the investment or financial commitment of the investment entity, including in the discretion of the entity and without limitation, right of access to financial and other records of the enterprise and membership or representation on the board of directors of the enterprise.

(b) The center, subject to the approval of the board or its designee, may authorize transfers directly from the fund or indirectly, as described in subsection (c) of this Code section, from an investment entity as to which the state is the sole limited liability owner, to make equity contributions to one or more investment entities whose structures, purposes, and operations are consistent with the criteria specified in this chapter. Investment entities to which the state, directly or indirectly, makes an equity contribution shall not expend any of the funds invested by the state unless and until the center has assured itself that the following conditions will be satisfied by such investment entity:

(1) Either:

(A) At least $3.00 of equity contributions has been committed in writing to the investment entity by persons other than the state for every $1.00 of equity contributions committed by the state from the fund or from an investment entity which the state is the sole limited liability owner of; or

(B) At least $1.00 of equity contributions has been committed in writing to the investment entity by persons other than the state for every $1.00 of equity contributions committed by the state from the fund or from an investment entity which the state is the sole limited liability owner of; provided, however, that no investment is to be made from such investment entity in qualified securities unless, in total, at least $3.00 of investment from sources other than the state, which may include funds from sources other than the investment entity and funds invested by the investment entity in the enterprise that are other than from equity contributions made by the state from the fund or from an investment entity which the state is the sole limited liability owner of, has been committed to such enterprise for every $1.00 of the state's portion of the amount invested in the qualified securities of such enterprise;

(2) The total amount of equity contributions by the state made to an investment entity that originate from the fund and that are ultimately invested by an investment entity in qualified securities of an enterprise, when added to any amounts invested by the fund directly in the enterprise's qualified securities, should ordinarily be no more than $1 million. In addition, the amount of investment by an investment entity in qualified securities issued by an enterprise should ordinarily not represent more than 49 percent of the total qualified securities at the time such qualified securities are purchased by the investment entity, after giving effect to the conversion of all outstanding convertible qualified securities of the enterprise; provided, however, that the investment in qualified securities of the enterprise by the investment entity can exceed 49 percent if, in the investment entity's judgment exercised in accordance with paragraph (5) of this subsection, such greater investment is prudent; and provided, further, that an amount greater than $1 million of funds attributable to equity contributions by the state from the fund may be invested by the investment entity in qualified securities of an enterprise if the enterprise is in severe financial difficulty and, in the judgment of the investment entity, an investment of such greater amount is necessary to preserve the initial investment in qualified securities;

(3) The investment entity shall make authorized investments in enterprises engaged in an entrepreneurial business only after receipt of an application from the enterprise that contains:

(A) A business plan including pro forma financial statements and a description of the enterprise and its management, product, and market;

(B) A statement of the amount, timing, and projected use of the capital required;

(C) A statement of the potential economic impact of the enterprise, including the number, location, and types of jobs expected to be created; and

(D) Such other information as the investment entity shall request;

(4) Approval of an investment may be made after the investment entity finds, based upon the application submitted by the enterprise and such additional investigation as the staff of the investment entity shall make and incorporate in its records, that:

(A) The proceeds of the investment or financial assistance will be used only to cover the seed-capital needs of the enterprise except as authorized by paragraph (2) of this subsection;

(B) The enterprise has a reasonable chance of success;

(C) The investment entity's participation is instrumental to the success of the enterprise and its retention within the state;

(D) The enterprise has the reasonable potential to enhance employment opportunities within the state;

(E) The entrepreneur and other founders of the enterprise have already made or are contractually committed to make a substantial financial or time commitment to the enterprise;

(F) Any securities to be purchased are qualified securities;

(G) There is a reasonable possibility that the investment entity will recoup at least its initial investment or financial commitment; and

(H) Binding commitments have been made to the investment entity by the enterprise for adequate reporting of financial data to the investment entity, which shall include a requirement for an annual report or, if required by the investment entity, an annual audit of the financial and operational records of the enterprise and, for such control on the part of the investment entity as considered prudent, over the management of the enterprise so as to protect the investment or financial commitment of the investment entity, including in the discretion of the entity and without limitation, right of access to financial and other records of the enterprise and membership or representation on the board of directors of the enterprise;

(5) The governing agreement of the investment entity provides that the care and judgment that management of the investment entity must exercise in the performance of its obligations shall be the judgment and care under the circumstances then prevailing and that persons of ordinary prudence, discretion, and intelligence exercise in the management of risk capital intended for investment at the early stages of organization and growth of a business that is:

(A) Expected to create, retain, or extend employment opportunities and economic growth in Georgia; and

(B) All other material matters being equal, developing technological advances that could be expected to result in the greatest increase in employment opportunity and economic growth in Georgia; and

(6) The governing agreement of the investment entity provides for distributions made by the investment entity to its partners or members that are proportionate to the capital committed or otherwise reflective of the ownership interests purchased by the partners or members.

(c) The center, subject to the approval of the board or its designee, may authorize transfers from the fund to make equity contributions to one or more investment entities as to which the state is the sole limited liability owner. Any such investment entities as to which the state is the sole limited liability owner shall be assigned for administrative purposes to the center within the meaning of Code Section 50-4-3. Such investment entities may make investments in other investment entities, which make equity contributions pursuant to subsection (b) of this Code section. Such investment entities may also make equity contributions through direct purchases of qualified securities of enterprises, subject to the center and the investment entity assuring themselves that the following conditions will be satisfied:

(1) At least $3.00 of equity contributions has been committed in writing to the enterprise by persons other than the state for every $1.00 of equity contributions committed by the state directly or indirectly from the fund to the enterprise;

(2) The center shall manage the investments of equity contributions in the qualified securities of enterprises so that the state shall not hold voting control of an enterprise;

(3) The total amount of equity contributions by the state made to an enterprise that originates from the fund, either directly or indirectly through an investment entity as permitted by subsection (b) of this Code section and this subsection, and that are invested in qualified securities of an enterprise should ordinarily be no more than $1 million. Total equity contributions from the fund to an enterprise, directly or indirectly through an investment entity, may be greater than $1 million if, in the judgment of the center, the enterprise is in severe financial difficulty and an investment of a greater amount is necessary to preserve the initial investment in qualified securities;

(4) The amount of investment, directly or indirectly through an investment entity, by the fund in qualified securities issued by an enterprise should ordinarily not represent more than 49 percent of the enterprise's total qualified securities outstanding at the time such qualified securities are purchased by the fund after giving effect to the conversion of all outstanding convertible qualified securities of the enterprise. An investment of an equity contribution from the fund may exceed 49 percent of the enterprise's total qualified securities outstanding if:

(A) In the case of direct investment, in the center's judgment, such greater investment is prudent; or

(B) In the case of indirect investment, in the investment entity's judgment exercised in accordance with paragraph (5) of subsection (b) of this Code section, such greater investment is prudent;

(5) The investment entity shall be authorized to make equity contributions in qualified securities of enterprises engaged in an entrepreneurial business only after receipt of an application from the enterprise that contains:

(A) A business plan including pro forma financial statements and a description of the enterprise and its management, product, and market;

(B) A statement of the amount, timing, and projected use of the capital required;

(C) A statement of the potential economic impact of the enterprise, including the number, location, and types of jobs expected to be created; and

(D) Such other information as the center shall request; and

(6) Approval of an equity contribution may be made after the investment entity finds, based upon the application submitted by the enterprise and such additional investigation as the staff of the center shall make and incorporate in its records, that:

(A) The proceeds of the investment or financial assistance will be used only to cover the seed-capital needs of the enterprise except as authorized by paragraph (2) of this subsection;

(B) The enterprise has a reasonable chance of success;

(C) The fund's participation is instrumental to the success of the enterprise and its retention within the state;

(D) The enterprise has the reasonable potential to enhance employment opportunities within the state;

(E) The entrepreneur and other founders of the enterprise have already made or are contractually committed to make a substantial financial or time commitment to the enterprise;

(F) Any securities to be purchased are qualified securities;

(G) There is a reasonable possibility that the fund will recoup at least its initial investment or financial commitment; and

(H) Binding commitments have been made to the state by the enterprise for adequate reporting of financial data to the center, which shall include a requirement for an annual report or, if required by the center, an annual audit of the financial and operational records of the enterprise, and for such control on the part of the investment entity as considered prudent, over the management of the enterprise so as to protect the investment or financial commitment of the investment entity, including in the discretion of the entity and, without limitation, right of access to financial and other records of the enterprise and membership or representation on the board of directors of the enterprise.