{"data":{"id":"us-ky/krs-154.20-234","jurisdiction":"us-ky","citation":"KRS 154.20-234","heading":"Angel Investor Program qualification requirements.            (Effective","body":"July 15, 2026)\n(1) The requirements for small businesses, investors, and investments to be qualified\nfor participation in the Angel Investor Program are as follows:\n(a) To be certified as a qualified small business, the business shall demonstrate to\nthe authority that it is an entity which, at the time the small business requests\ncertification:\n1. Has a net worth of ten million dollars ($10,000,000) or less or net\nincome a fter federal income taxes for each of the two (2) preceding\nfiscal years of three million dollars ($3,000,000) or less;\n2. Is actively and principally engaged in a qualified activity within the\nCommonwealth, or will be actively and principally engaged in a\nqualified activity within the Commonwealth after the receipt of a\nqualified investment by a qualified investor;\n3. Has no more than one hundred (100) full-time employees;\n4. Has more than fifty percent (50%) of its assets, operations, and\nemployees located in the Commonwealth; and\n5. Has at no time received an aggregate amount of qualified investments\nthat has allowed qualified investors to receive more than one million\ndollars ($1,000,000) in angel investor credits;\n(b) To be certified as a qualified investor, an individual investor shall demonstrate\nto the authority that he or she:\n1. Is an individual natural person who may utilize a single -member limited\nliability company to make the investment as long as the individual\nnatural person is the owner and the limited liability company is a\ndisregarded entity;\n2. Qualifies as an accredited investor pursuant to Regulation D of the\nUnited States Securities and Exchange Commission, 17 C.F.R. sec.\n230.501, in effect as of the date the individual investor requests\ncertification;\n3. Does not hold in excess of twenty percent (20%) ownership interes t in,\nand is not employed by, the qualified small business prior to making the\nqualified investment in that qualified small business;\n4. Is not closely related to an individual who holds in excess of twenty\npercent (20%) ownership interest in, or who is em ployed by, the\nqualified small business prior to making the qualified investment in that\nqualified small business. For purposes of this subparagraph, \"closely\nrelated\" means any of the following in relation to the owner or owners\nor spouse of the owner or owners:\na. Parents or grandparents;\nb. Children or their spouses; or\nc. Siblings or their spouses; and\n5. Seeks a financial return from the investment made in the qualified small\nbusiness;\n(c) To be certified as a qualified investment, the investment shall:\n1. Be a cash investment of at least ten thousand dollars ($10,000), in a\nqualified small business made:\na. Directly by a qualified investor; or\nb. Indirectly through a pass -through entity formed for the sole\npurpose of making one (1) or more investments in a single,\nqualified small business and treated as a pass -through entity for\nfederal income tax purposes;\n2. If made through a pass -through entity, the amount eligible for the tax\ncredit shall be limited to that individual's pro rata share of the capital\ncontributed to the entity that is ultimately invested in the qualified small\nbusiness; and\n3. Be offered and executed in compliance with applicable state and federal\nsecurities laws and regulations; and\n(d) A pass-through entity utilized under paragraph ( c) of this subsection shall not\nmake qualified investments in more than one (1) company.\n(2) In consideration for the qualified investment, the qualified investor shall receive an\nequity interest, or a near equity interest, such as a simple agreement for f uture\nequity, or \"SAFE agreement,\" or a convertible debt instrument in the qualified\nsmall business.\n(3) The authority may establish additional requirements and guidelines for the efficient\nimplementation and administration of the Kentucky Angel Investment  Act and to\ncarry out its purposes.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57635","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:53Z","sha256":"7ddca08a6a81c416585a4702e200cec62d0532a608d0fe5d65b8f0da22d3374e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.20-232","next":"us-ky/krs-154.20-236"},"notice":"GroundRules: Original legal text. Not legal advice."}