Capital journey for start-ups is dominating topic during “3686 Festival” in Nashville
By Tom Ballard, Chief Alliance Officer, PYA
There was a clear focus on capital during yesterday’s return of Launch Tennessee’s in-person “3686 Festival” to Nashville after a two-year hiatus with the 2020 event totally virtual and no event in 2021.
Emceed on the main stage by the hyperenergetic Chris McAdoo, Director of Strategy and Engagement at the Knoxville Entrepreneur Center, it was clear throughout the day that attendees welcomed the opportunity to reengage face-to-face with their fellow entrepreneurs and existing or potential investors. Ashley Currie, Marketing and Communications Director for Launch Tennessee, said 786 pre-registered for the festival ahead of its opening session at 10 a.m. CDT.
This year’s event marked a return to the location where the rebranded “3686 Festival” was birthed in 2015. After launching under the “Southland” brand in 2013 at The Cannery in Music City, the event moved to Marathon Music Works in 2014 under the “Southland” moniker before the new name was adopted.
As one of those tidbits that might be of interest, the “3686” name comes from the latitude and longitude on Nashville.
Right off the bat, the all-day program kicked-off with a fireside chat featuring Morgan DeBaun, Chief Executive Officer of Blavity, and Marlon Nichols, Managing General Partner at MaC Venture Capital. They mostly discussed her start-up journey in founding the diversified digital media company that builds platforms to inform, entertain and engage communities of color before Nichols closed out the session with these insights:
- “We try to be that access to capital everywhere,” a reference to his California base.
- “Talent is everywhere and great businesses can be built everywhere.”
- “Find ways to cultivate community . . . Access to other founders.”
Next Session Focused on Growth Challenges:
Immediately after the opening fireside chat and across the street at the Foundry, several Tennessee-based entrepreneurs (see photo at right) shared their journeys during a panel discussion under the title of “Good Problems to Have: The Challenges of Growth.” They included:
- Shani Dowell from Nashville, Founder of Possip, a start-up that helps people, schools, and organizations live up to their greatest potential by enlisting the voices of their diverse and dispersed communities;
- Lauren Glass from Kingsport, Co-Founder of rpl University, which we spotlighted in this April 2021 teknovation.biz article;
- Laurel Orley of Nashville, Co-Founder of Daily Crunch Snacks that provides high quality, healthier snack options that are vegan, keto, paleo and gluten-free; and
- George Yu of Chattanooga, Founder of Variable Inc., a company that develops colorimeters and spectrophotometers that harness the world’s color libraries in easy-to-use, patented devices that pair with custom developed mobile apps on a user’s smartphone or tablet.
Yu and his company were the longest tenured, having been in existence nearly a decade, Possip is probably the second oldest, and both rpl University and Daily Crunch Snacks are relatively new.
Dowell said that her company has raised about $4 million. By comparison, Glass is raising a pre-seed round. Yu used a Kickstarter campaign to fund the early stages of Variable where he gained nationally visibility at the SEMA Show in Las Vegas in 2013. “Acclaim doesn’t translate into a product customers will buy,” he said. Variable went back to the drawing board to scale back what the product would do, an important lesson that the former NASA scientist learned in his decade-long journey.
Glass stressed the importance of having a technical co-founder, while Orley shared an experience where her team thought a critical next hire was a sales person. That quickly changed when 16,000 pounds of a rancid shipment of almonds convinced them that they need to hire someone focused on supply chain issues.
Dowell noted that the familiar adage that meeting early milestones and “the doors (to funding) will suddenly open” is not always true. There’s also the matter of never discounting a potential investor as Orley explained. “Our first investor was the parents of our intern,” she said.
Glass reminded attendees that “you have to tell people what you are doing. You are the only person who can tell your story. It’s all about building relationships.”
First Afternoon Session Focused on the Value-Added Investor:
Two Chattanoogans – Charlie Brock, former President and Chief Executive Officer (CEO) of Launch Tennessee and now of Brock Partnerships, and Kim Seals, General Partner in The JumpFund – were participants on a panel titled “The Value-Added Investor: Becoming an Operator-Angel.”
Both reiterated points that most investors will utter.
- Brock noted the importance of traits such as coachability, humility, ability to accept a “no” answer, and ability to be persuasive.
- He also answered about whether it is best to bet on the jockey or the horse with this observation: “The proverbial pivot is going to happen, possibly multiple times, so it’s betting on the person.”
- On the matter of how to deliver a “no” answer, Seals provided two responses that were slightly different. “As an angel, be as specific as possible,” she said. “With The JumpFund, when we say ‘no,’ we give you actionable, specific feedback.”
Other Afternoon Sessions:
Two Launch Tennessee staffers moderated other capital-focused afternoon panels.
- New Chief Investment Officer Monique Villa facilitated a panel titled “A #BuildInSE Homecoming Story: Entrepreneurs Becoming VCs in the Southeast” that included two Tennesseans: Cam Doody, Co-Founder of Bellhops, now known as Bellhop, and the Co-Founder of Brickyard (see recent teknovation.biz article here), and Hunter Hillenmeyer, a native Nashvillian and former National Football League player who is now a Partner in Next Play Capital and resides in Music City.
- Khrys Hatch, Senior Associate, moderated a panel that focused on top tips and advice for start-up CEOs navigating the next 18-24 months of fundraising.