How Stacey Abrams became a millionaire

When Abrams ran for governor four years ago she was in debt. Now, as she takes on Kemp again, she is a millionaire.

The Democrat is hardly the first wealthy Georgian to run for governor; Kemp’s fortune has grown as well and his net worth of $8.6 million is still more than double her own, according to state disclosures. But the broad array of Abrams’ roles and holdings would make her unique among those who have held the job. They owned land and led local or regional businesses; Abrams is a brand.

All of that success brings with it questions of how she will disengage should she be elected.

Abrams has pledged to “lead by example,” saying she would step down from public boards and wall herself off from financial decisions that would create a conflict of interest. But her campaign declined to provide more detail, such as whether that would include putting her holdings in a blind trust.

“I have built my career on ethical and transparent leadership,” she says on her website, where she promises to serve Georgians and not special interests.

Abrams declined through her campaign staff to be interviewed for this story. They answered some of the AJC’s questions via email.

Experts said Abrams could face heightened scrutiny, in part, because of her varied holdings. In a hyper-partisan environment, potential conflicts of interest — or even the appearance of conflicts — could lead to ethics complaints or unwanted attention, they said.

“Because of the breadth and depth of her financial life and the commitments that she has, I think that she’d be under a very large microscope. More than any other elected governor in Georgia,” said Kennesaw State University Political Science Professor Kerwin Swint.

Abrams, Inc.

During her 2018 bid for governor, Abrams was seeking to become the first Black female governor in the country.

At the time, she owed the IRS $54,000 and had another $170,000 in student loan and credit card debt, according to personal disclosures. Republicans attacked her finances, suggesting if she couldn’t manage her own money how could she be trusted to handle taxpayers’?

That line of attack won’t work today. She is worth more than $3 million, according to her latest disclosures. In the past couple years, she’s branched out into new ventures. She’s now invested in a solar startup and she holds stakes in a company seeking a foothold in the technology and cybersecurity sectors.

But most of Abrams’ new wealth comes from the fact that she is Stacey Abrams — author, politician and progressive activist celebrated by millions of admirers across the country.

Of the more than $6 million she has earned since the 2018 election, 85% has come from her books, paid public speeches and payments for television appearances. And based on her prior personal financial disclosures filed while serving in the Legislature, her earnings in these areas skyrocketed alongside her fame.

Since the last gubernatorial election, Abrams has disclosed receiving almost $3.6 million in book payments. Her novels are hot properties. The political thriller published last year, “While Justice Sleeps,” raced to the top spot on the New York Times Best Sellers list the week it was released and was immediately optioned as a television series by Working Title Television, a production company that is part of NBCUniversal. Later the same year, she released “Stacey’s Extraordinary Words,” a children’s picture book that also became a Times best seller.

Last year, Doubleday and Anchor books announced a deal to buy Abram’s next two novels. The details of her book deal have not been revealed, but in her disclosure, Abrams reported a $2 million payment from her literary agent in 2021 and this year she received a second payment for $425,000.

Prior to her first run for governor, Abrams wrote most of her fiction under the pen name Selena Montgomery. In another nod to her increased name recognition, new editions of those older books now say “Stacey Abrams writing as Selena Montgomery.”

Abrams is also an in-demand public speaker, giving speeches for TED, South by Southwest and corporate speaking events where she shared her philosophy on leadership, earning $1.5 million along the way in fees. Her profile had grown so much that her booking agency placed her photo prominently on its website among other celebrity speakers. She was directly in the center of a montage of clients that included Bill and Hillary Clinton, Lin-Manuel Miranda, Henry Kissinger and fellow Georgian Tyler Perry.

In addition, she appeared on dozens of television shows, mostly news or public affairs, but also chat shows like “The View” and a notable appearance as “president of Earth” on the Paramount show “Star Trek: Discovery.”

Learning from failure

Even before her first run for office, Abrams had her hands in many different arenas.

In 2001, fresh out of Yale law school, she published her first book — a romance novel — while working as a young tax attorney in an Atlanta firm. The following year, she registered Sage Works, her legal consulting business and the first of several business ventures she would found or co-found over the next decade.

Her political career also took flight during this period. In 2006, voters in Atlanta and parts of DeKalb sent her to the Gold Dome. Abrams would serve a decade in the Georgia House of Representatives, most of that time spent as leader of the Democratic caucus. While in the Legislature, she established a non-profit aimed at registering Georgia voters.

Abrams also leveraged connections made with women at panels and conferences into new business opportunities. She met Lara Hodgson in 2003 at Leadership Atlanta, a training and development program for promising young professionals.

Three years later, the women launched Insomnia Consulting — a management consulting firm named because Abrams and Hodgson were night owls.

In interviews, Abrams said she was, at first, a reluctant entrepreneur.

“When we (Hodgson and I) met I was a lawyer. I was very happy with paychecks. So moving into entrepreneurship was a risk for me,” Abrams said in the Harvard Business Review podcast “Women at Work.” “One piece that always drew Lara and I together is this curiosity. Loving to learn new things. Wanting to understand how things work and how to make them better.”

They had an “aha moment” when Hodgson arrived flustered and late to a lunch in Buckhead toting her infant son. She had spilled a bottle of formula on her dress and as she mopped it up she wondered aloud why someone didn’t make spill-proof water bottles to mix formula for babies.

Credit: Stacey Abrams

Credit: Stacey Abrams

Soon afterward, they were doing just that. It took some time, but Nourish took off. The bottles began to appear at stores like Whole Foods and the mega online retailer Amazon. But as they scrambled to meet the growing demand they ran into an obstacle: cash flow. Purchasers waited months to pay their invoices and the small startup didn’t have the cash to pay their suppliers.

“When Nourish failed, we failed because we grew to death,” Abrams said in a 2021 interview with Inc. “So we didn’t let that moment define our capacity for success, and we didn’t let it dictate what we were going to do next.”

Out of that failure, came NOWAccount Network, another startup to help small businesses with cash-flow problems. The financial technology company now has a staff of 23 and has helped small businesses process $702 million in payments, according to its website. Abrams began as one of NOW’s top executives, but left in 2016 as her political career demanded more of her time. In 2018 she reported earning $279,940 from NOW and her campaign says she is still an investor and serves on its advisory board.

Abrams’ loss that year to Kemp seemed only to heighten her celebrity.

When Democrat Joe Biden won Georgia in 2020 and Jon Ossoff and Raphael Warnock won their U.S. Senate runoffs, handing control of the chamber to Democrats, Abrams was lauded as a driving force who had paved the way. Black women had been a critical part of the multiracial coalition which helped organize voters and flip the state for Democrats. Abrams was the most prominent face of that movement.

Her status as a star on the left was cemented.

New campaign, new investments

As Abrams star power rose after the 2020 election, speculation about her future intensified. She ended that on Dec. 1, 2021 when she formally announced her plan to run for governor again.

Earlier that year, she had met Atlanta businesswoman Phyllis Newhouse when they both spoke at a panel on entrepreneurship and women’s leadership. Newhouse led Xtreme Solutions, a cybersecurity business, which she started after a two-decade career in the military.

Newhouse was on the cusp of new investment opportunities and she had asked Abrams to come along, according to news reports and the Abrams campaign.

At Newhouse’s invitation, Abrams invested in one of her companies, Athena Holdings, in its merger with a solar technology start up.

Newhouse declined to comment for this story.

But in a 2021 article in Inc., Abrams said she was enthused by Newhouse’s vision for a company funded and founded solely by women.

“Black women are not often included in the more sophisticated financial deals,” Abrams said.

Just weeks after Abrams announced her second bid for the state’s highest office, Athena finalized a $2 billion deal with Heliogen, a Pasadena, Calif.-based company developing technology to replace carbon-producing fossil fuels with concentrated sunlight.

The Abrams campaign said she “invested” in Heliogen but declined to specify what that involved. As part of the deal, Abrams was given 15,000 founder’s shares of Heliogen valued at about $64,000, according to her personal financial disclosure. She and Newhouse were also named directors on Heliogen’s board.

Like many technology companies, Heliogen has seen its stock price tumble this year. But in an earnings call on Aug. 11, company officials said they were optimistic that the new climate bill passed in Congress would buoy them.

Credit: Heliogen

Credit: Heliogen

As she has campaigned for governor on a platform that includes Georgia’s transition to renewable energy, Abrams has acquired more Heliogen stock. In March she added 40,404 new shares and in July 99,099 more, according to U.S. Securities and Exchange Commission records. The additional stock was part of her founder’s agreement, her campaign said.

Abrams now has 154,503 shares in Heliogen. At current market prices her investment would be worth roughly $400,000.

Her involvement in Heliogen, however, could create a potential conflict if Abrams is elected. She would hold a powerful sway over the state budget. She has said she wants Georgia to develop public-private partnerships across the state to implement “advanced energy solutions.”

On Tuesday, she rolled out an environmental action plan with a strong focus on renewable energy, including training for a growing workforce in the field.

“Clean energy technicians, solar installers, clean car engineers, and green builders are increasingly in demand, and by combining training, investment and policy, Georgia stands to become a national leader,” she said in a statement.

Newhouse invited Abrams to serve on the board of another of her companies, ShoulderUp. Like Athena, ShoulderUp is a special purpose acquisition corporation — or SPAC.

SPACs seek out existing private businesses, merge with them and infuse them with money raised by selling stock to investors. Some critics say SPACs provide less transparency than the traditional process of taking a company public.

According to its most recent filings with the SEC, ShoulderUp has not found a partner company yet, but it is targeting the technology and cybersecurity sector.

Abrams doesn’t receive a salary for being on the board, but she does get 5,000 founder shares, which could be lucrative if the company succeeds.

Abrams’ campaign said she brings to the board an understanding of the federal tax code and complex financial deals. Her connections would also be very appealing to help attract investors, said Kristi Marvin, founder of financial analysis company SPACInsider.com.

Abrams is a deal maker with a deep Rolodex of contacts who might like to partner with her, Marvin said.

“That is very advantageous when (a company) wants to go public,” she said.

Complications

If she fails to properly insulate herself from her business investments, many of these endeavors could become complications should Abrams be elected. Much of her wealth is tied up in her intellectual property and in deals with publishers and entertainment companies. As governor, her administration would deal with tax breaks offered to companies that film in Georgia. Likewise, the state is interested in attracting alternative energy companies and high tech companies, like cybersecurity, and she has investments in those sectors.

Andrew Cohen, director of the Jean Beer Blumenfeld Center for Ethics Georgia State University, said it’s commendable that Abrams has had success as an entrepreneur.

“So the question now is, should she be asked to impoverish herself as part of her quest for public office?” Cohen said. “That needn’t be the case.”

To avoid possible conflicts, Cohen said Abrams could establish a blind trust where she would hand over her holdings to a financial adviser who would have the power to independently manage her assets while she serves as governor.

It’s not a requirement for governors and other politicians to distance themselves from their finances. But not doing so can have consequences.

University System Chancellor Sonny Perdue faced criticism during his two terms as governor for not removing himself from direct management of his agricultural holdings while in office. In 2006 he signed into a law a measure that effectively gave him a $100,000 retroactive tax break on an out-of-state land transaction.

Perdue did place his holdings in a family trust after his confirmation as U.S. agriculture secretary, but a deal he struck to buy a grain facility from Archer-Daniel-Midland became an issue in his confirmation as chancellor.

Kemp has not placed his assets in a blind trust and has faced scrutiny for a bad business loan he made to Hart AgStrong, an agriculture business that crushes canola seeds. Kemp’s fortune grew by $3 million during his time in office, according to his latest disclosure. Much of that came from the appreciating value of his real estate holdings and business ventures. But since taking office, he has also become involved in a Carrollton, Ga. business that digs holes and trenches for utilities.

Kennesaw State’s Swint said a blind trust “would be a minimum expectation” for Abrams because of the nature of her finances. But he said that is unlikely to answer every question because her portfolio of interests is so varied.

“Every governor deals with those (questions) to some extent. But she would have a particularly big challenge keeping it all straight and fending off the accusations,” he said.