By Tom Ballard, Director of Innovation and Entrepreneurial Initiatives, Pershing Yoakley & Associates, P.C.
Chattanooga-based SwiftWing Ventures is fairly new to the venture capital scene in East Tennessee, but it has already made a name for itself in several ways.
In its hometown, SwiftWing is actively engaged with several start-ups and is rehabbing the Fleetwood Building to anchor its initiatives and some of its portfolio ventures. Just a few weeks ago, the fund invested $686,000 in a seed round for Knoxville-based Survature, Inc.
“We think there are a lot of good companies in Chattanooga,” Ben Brown, SwiftWing Chief Executive Officer (CEO), told us recently. He has experience in the investment world (Nashville Capital Network and FourBridges Capital Advisors) and in start-ups (Tensor Surgical, American Exchange, and ProDiligence).
“We want to build a really strong brand for SwiftWing Ventures, wherever we invest,” Brown said in explaining the investment in Survature. “We have to find the best opportunities to run a really good fund, and Survature was a great opportunity.”
Brown dispelled rumors that SwiftWing expects companies in which it invests to relocate to Chattanooga.
“We want companies to be where they want to be,” he said, adding that Survature Co-Founder and CEO Jian Huang is well-connected to the all-important talent pipeline in Knoxville through his role as a University of Tennessee Professor.
So, what characteristics does SwiftWing look for in start-up funding candidates?
“First and foremost, it’s the team,” Brown says. “We want deep domain expertise, grit, and integrity.”
SwiftWing will help build-out the team with a particular focus on sales and marketing.
“Sales and business strategy is our value add beyond just capital,” Brown explains.
After the quality of a start-up’s team, SwiftWing looks for the existence of a product with a “proven and differentiated space in the market.” This is frequently described as “traction,” which translates into recurring revenue, repeat customers or both.
“We want to put gas on an already-burning fire,” Brown says, adding that SwiftWing is more interested in B2B (business-to-business) than B2C (business-to-consumer) opportunities. In that regard, he says the fund is “technology agnostic,” although SwiftWing has a special interest in manufacturing because of Chattanooga’s heritage.
“Additive manufacturing is transformative,” Brown says. “It is an area of high interest . . . it is moving fast.”
In terms of disciplines that cross industries, Brown cited two. One is SaaS (software as a service), where scalability is easier and there are higher margins. Another is “anything related to data . . . creation, management, analysis and application of findings,” Brown adds.
In addition to Survature, SwiftWing Ventures’ portfolio in Chattanooga includes:
- DevLabs42, an in-house software R&D company;
- DevStudio42, a software development consulting start-up;
- Creative Insomniacs, an agency that does creative work, video production and design; and
- TechTown, an experiential learning center for young people interested in programming, videography, 3D printing and design;
SwiftWing has also invested in FiveWOWs, a business and personal concierge service that is located in Kansas City.
Finally, SwiftWing is developing a new accelerator concept that it expects to announce this fall.