Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Inside the long hallways of the East Tennessee State University (ETSU) Research Corporation Valleybrook Campus in Kingsport, there is a passionate team of business leaders who have spent years planning an entrepreneurial hub in Northeast Tennessee.

David A. Golden, CEO of ETSU Research Corporation; Dave Clark, Vice President for Entrepreneurial Ecosystem Development; and Ryan Shipley, the new Executive Director of 2681 Core (accelerator program), have banded together to create a resource hub focused on cultivating, supporting, and scaling startups that can drive regional economic growth. The key is identifying companies that can leverage the advantages of the Appalachian Highlands region.

The ETSU Valleybrook Campus is rich with resources

One of those assets has been under development for the last couple of years and is ready to welcome innovators, creators, and researchers.

With the unwavering support of ETSU, Eric Jorgenson, the VP of Biomanufacturing Development, has spent the last few years transitioning the Valleybrook facility’s 29 wet laboratories into fully operational units suitable for most researchers, entrepreneurs, or innovators.

In total, Valleybrook boasts a 100,000-square-foot space on 144 acres, with more than 70,000 of that being air-conditioned offices and laboratories, and the remaining 30,000 being high-ceiling warehouse and utility space. One of the goals is to fill those labs with startups and research teams that aim to make a tangible impact.

The wet labs range from 300–1,200 sq ft modules with room to grow inside a 100,000 sq ft facility as entrepreneurs scale from lab to pilot.

 

Touring the never-ending hallways of the building, Jorgenson, Golden, and Clark said they dream of the day when the resources can be fully utilized. It’s all about finding the right entrepreneurs and innovators for the space.

Some of the offices and labs are already utilized by various entrepreneurs; for example, Mounir Izallalen, the Co-founder and CEO of OceanFlex, operates inside one of the wet labs; and David Arapakos, the founder of Spartan Health Science, operates in one of the offices.

2681 Core Accelerator is getting startups capital-ready

Tucked inside the Valleybrook Campus is an accelerator program, now spearheaded by Shipley, and focused on incubating growth-stage startups in Northeast Tennessee. The entity is named after the intersection of Interstate 26 (I-26) and Interstate 81 (I-81), which is located in Sullivan County, near Kingsport and Johnson City.

Now in its second year, the 2681 Core accelerator really focuses on two things: mentorship and capital readiness.

“What each company needs to move forward is very different,” Clark said. “That’s why this year, we are using AI as an analytical engine to provide in-depth analysis and evaluation of companies, similar to what you would see in a due diligence check with a venture capital firm.”

Using the AI evaluation, Clark and Shipley said they can better direct the founders toward specific areas of improvement, versus one-size-fits-all accelerator programming.

“The exercise building out a full due diligence package reveals a lot about the status and maturity of your company,” Shipley said. “And put simply, our objective is to get companies from this region funded.”

The startups in this year’s accelerator cohort include:

• QuestionsHeal, a guided self-discovery mobile app that helps users uncover the subconscious beliefs shaping their stress, patterns, and relationships.
• OceanFlex, an advanced materials company developing biodegradable alternatives to conventional plastics, engineered to work as direct replacements within existing manufacturing processes. Its initial focus is the outdoor and sporting goods market.
• Heatherstone develops semantic matching technology that connects people and opportunities based on meaning and intent rather than keywords and filters.
• InstructiDerm is producing patented instructional dermatology models used to train clinicians and students in recognizing skin cancer across various skin tones.
• IonicH2O is scaling an enhanced electrochemical deionization process for low-energy seawater desalination, along with a chemical rinse technology for removing PFAS from contaminated water.

Companies that develop a thorough due diligence packet and end up seeking outside investment are then ushered through to another resource, established by Clark, Golden, and a couple of other regional economic developers.

Catalyst Capital could fill the funding gap in Northeast Tennessee

One of the biggest hurdles to Northeast Tennessee companies is funding. Venture capital and angel groups located in this specific region are few and far between. To date, three companies in the Tri-Cities have received funds from Launch Tennessee’s InvestTN fund: Personality Pool, MAIA, and Green Llama. In total, 80 companies across the state have been funded since InvestTN’s inception.

However, the state fund works as a matching fund. Companies need investors to come alongside the state’s investment in a 1-to-1 private capital match.

So, for the past year, Clark has been building out one of Northeast Tennessee’s first angel networks: Catalyst Capital.

“By the end of September, at the latest, we’ll be ready to start making investments,” Clark said. “And we already have multiple companies that we’re looking at in the process.”

One of the components of the Catalyst Capital thesis is intentionally investing in companies that will have an economic impact on the region. Of course, return on investment is important for the longevity of the angel network, but the angels hope to get an RIO on companies that are from Northeast Tennessee, have a headquarters there, or are willing to hire people from the region.

Clark said the goal is to have a pool of about $1 million, with an investment range from $25,000 to $250,000.

The momentum is undeniable

Between the assets of Valleybrook, the emerging accelerator, and the newly announced angel group, the momentum coming out of the entrepreneurial ecosystem in Kingsport is undeniable.

Golden said it’s the culmination of years of planning, dedication, and teamwork.

“We have recruited people to this effort with decades of business experience, a lot of gas left in the tank, and the passion to build something that can outlast all of us,” Golden said. “We realize it’s not about us. It’s about the people who come after us.”

So, when asked about the vision – both of Valleybrook and for the region – the answers didn’t disappoint.

“Painting my vision for the next 10-15 years… This place will be filled with researchers and entrepreneurs. We will have a robust accelerator program, pulling people from all over the country to work in this facility and grow in this community,” Clark said.

Learn more about Valleybrook’s available lab space here.

Connect with David Golden.

Connect with Dave Clark.

Connect with Ryan Shipley.

Explore more about the 2681 Core Accelerator.

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