PART 1: Vanderhoofven reflects on first-year progress at Three Roots Capital
(EDITOR’S NOTE: This is the first article in a two-part series updating readers on the progress made in the inaugural year of Three Roots Capital, a local non-profit that provides loans, private equity, community development services, and business technical assistance.)
By Tom Ballard, Chief Alliance Officer, PYA
It was a little more than a year ago that Three Roots Capital had its official unveiling to the region during an event that was part of the inaugural “Innov865 Week” celebration.
Looking back over the past 12 months, Grady Vanderhoofven is proud of the organization’s accomplishments as well as the bright future that he sees for Three Roots Capital and the primary geographic area it serves.
“The idea is to have a continuum of funding available here,” the entity’s President and Chief Executive Officer says. That includes not only venture capital – an area that Vanderhoofven knows well – but also loans.
As regular readers of teknovation.biz know, Vanderhoofven has been a major player in the region’s investment picture for most of this century, serving as a key executive in the Southern Appalachian Fund and Meritus Ventures. Both brought much needed early stage equity investing to an area that had a significant void, and he says that both venture funds had two exits each this past year.
With last year’s decision to wind down Tech 2020, Vanderhoofven saw an opportunity to incorporate one of Tech 2020’s key services – technical assistance for business owners – in a way that maximized the likelihood of success for the recipients of funding coming through Three Roots Capital.
“The name that we chose for this new financial institution recognizes three critical needs of young and small businesses – capital, connections, and expertise,” Vanderhoofven told us in this teknovation.biz article posted in September 2017.
So, how is Three Roots Capital executing against the three pillars?
“We have secured $34 million in the last nine months primarily but not exclusively from banks and already committed almost $13 million of that amount,” Vanderhoofven says. “Those loans have been as small as $50,000 and as large as $6 million.”
He adds that Three Roots Capital has looked at deals in Athens, Cleveland and Chattanooga and participated in a recent major project in Cookeville.
“It’s been a big variety,” Vanderhoofven says, noting that the mix ranges from young technology companies – something that you expect of someone with a venture background – to manufacturing and larger economic development projects.
“We have this eclectic mix, and we are comfortable with the wide breadth,” he adds.
The loan fund is just part of the opportunities that Vanderhoofven and the Three Roots Capital team are exploring.
NEXT: Other Three Roots Capital initiatives and plans.