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November 19, 2015 | Tom Ballard

ACG leads $8.7 million investment in General Graphene

General Graphene

By Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.

What a way to celebrate local entrepreneurship and put an exclamation point on the third annual “Start-up Day Knoxville.”

Ironically, at an event held in one of the city’s most historic venues – the Bijou Theater, the region’s exciting technology and entrepreneurial future was clearly on display with the capstone being a game-changing announcement about the largest Series A investment ever made in a local company.

Knoxville-based Angel Capital Group (ACG), one of the largest angel networks in the country, announced that it was leading a syndicate that is investing $8.7 million in General Graphene Corporation, the newest undertaking from Vig Sherrill, one of the region’s best known serial entrepreneurs.

“Ninety-five percent of the money for that round came from Knoxville and Nashville,” Eric Dobson, ACG Chief Executive Officer, said.

The investment is also one of the largest Series A rounds in the Southeast.

For a region that is frequently described as a flyover for many Venture Capitalists, the announcement that a deal of this size can be organized locally sends a solid message, not only to investors across the country, but also to aspiring entrepreneurs who want to grow new enterprises here.

It is, in fact, all about “stickiness,” and our region’s ability to keep start-ups here rather than see them relocate to other areas when they are shown the money. It is also about not letting promising technologies that come out of our region’s technology creators – Oak Ridge National Laboratory (ORNL) and the University of Tennessee – go elsewhere due to lack of capital or serial entrepreneurs.

In the case of General Graphene, it has licensed a graphene synthesis process developed at ORNL that overcomes limitations of previously used techniques.

As noted in a series about Sherrill, graphene is a material that has amazing properties – 10 times as strong as diamonds, 200 times stronger than steel, able to carry more than a thousand times the current that copper can, and the most flexible substance ever measured.

The challenge: the production costs that would allow it to be widely used in a variety of products.

“We’ve developed the technology that will enable the mass production of high quality graphene at a low cost,” Sherrill said at yesterday’s event. “Angel Capital Group’s funding will allow us to make the machine that will then in turn make the graphene. We will build our first prototype in Oak Ridge and get into pre-production.”

For ACG, the opportunity aligned very well with the firm’s philosophy.

“General Graphene demonstrates the Angel Capital Group investment philosophy, which is to find the real innovator in the nation’s heartland who has demonstrated science and technology that can ultimately have worldwide impact,” Dobson said.

ACG’s model connects angel investors and entrepreneurs such as Sherrill in a process that celebrates innovation, rewards risk taking, and focuses on performance.

“General Graphene is real; it can be scaled-up and grown to maturity,” Dobson says. “We are excited to be a part of this world-changing investment.”

How much of a game changer is graphene? Sherrill is eloquent in his explanation.

“Imagine having tires that only weigh two to three pounds, airplane wings that weigh a hundred pounds, and clothing that becomes bulletproof based on the fact that it’s made out of graphene,” he says. “That’s the potential of graphene. Nobody is using it now, because you can’t buy enough to use; you can’t get the material to experiment with because it’s too expensive.”

ACG and one syndication partner have extended General Graphene a term sheet for the entire round, and it will be completed by the end of the month.


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