OUTLOOK SERIES PART 7: Recommendations for new Governor, General Assembly
(EDITOR’S NOTE: Thanks to the participation of Angel and Venture Capitalists located in East Tennessee, we are able to annually offer their insights on the past year’s activities and their outlook for 2019. This is the seventh article in this year’s series.)
Today’s question was posed before the recent inauguration of new Governor Bill Lee. It reads as follows: “Tennessee will inaugurate a new Governor on January 19 and welcome about 30 new state legislators? If you could offer one or two policy recommendations for the new administration and General Assembly to enact to further spur entrepreneurship, what would they be?”
Ken Woody, President, Innova Memphis: Throwing millions of dollars of incentives at an Amazon HQ2 or a new Sports Facility sounds exciting and big impact, but the state would benefit much more by investing in local tech training for employees and offering incentives for start-ups. So many of these start-ups need to hire top talent and will grow rapidly, doubling and tripling in size in a very short period. The impact for the state and the communities can be exponential.
Eric Dobson, Chief Executive Officer, Angel Capital Group: Expand angel tax incentives! This state has demonstrated great vision and leadership turning Tennessee into a start-up engine. Don’t falter or alter the course. It is working. Don’t mess it up! It will pay off soon.
Tony Lettich, Managing Director, The Angel Roundtable: Proactively support LaunchTN’s strategic vision of making Tennessee the most start-up friendly state in the nation, on a legislative basis.
Kristina Montague, Managing Partner, The JumpFund: Stay the course. LaunchTN has been a huge advocate for our start-up ecosystem and has worked closely with the Governor and state leadership to increase both public and private early stage investment, pass legislation such as the angel investor tax credit, and leverage national programs such as SBIR (Small Business Innovation Research) and NSF (National Science Foundation) to secure additional research and growth capital for Tennessee companies. We should continue to look at successful models in other states which have created public/private partnerships to build funding and support structures to continue to grow our start-up ecosystem and thus benefit our statewide economy as a whole.
John Morris, Fund Manager, The Lighthouse Fund: Capital does improve the quality of deals. Programs that infuse or attract capital to the state are desperately needed.
Grady Vanderhoofven, President and Chief Executive Officer, Three Roots Capital: I would encourage the Governor and the General Assembly to think about access to private capital as a mechanism to spur economic growth in Tennessee. Entrepreneurs and companies with growth potential require access to capital in order to grow. Legislation and policies that increase the amount of capital available and encourage investors to invest (and thereby, risk) capital will spur entrepreneurship, company creation, and company growth, which will increase job and wealth within Tennessee. I also believe it’s important for lawmakers and policy makers to think proactively about encouraging capital to flow into areas of the state that are outside of what are generally perceived as “hot spots” of economic activity. Creating economic opportunity in all corners of the state can be a mechanism to help mitigate issues related to unemployment, poverty, and drug use.
Courtney Watson, Partner, Chattanooga Renaissance Fund (CRF): With the change in leadership, I would request that the new administration continue to support the SBIR/STTR (Small Business Technology Transfer) program. Many of CRF’s portfolio companies and companies that we follow have been successful in receiving these forms of non-dilutive funding. The Phase I and II grants help companies at the forefront of technology build the early phases of their product so that they are more attractive for external investment from the venture community.