
INVESTOR OUTLOOK 3: How has the “InvestTN” program made a difference?
Our panel of investors from East Tennessee offer their insights.
Today’s Question: A little more than one year after “InvestTN” announced its first investment in Personality Pool, how would you say it has benefited start-ups generally and specifically as it relates to your portfolio?
- Tony Lettich, Managing Director of The Angel Roundtable: As “InvestTN” invests capital for start-ups in stages ranging from pre-seed to Series B in a variety of sectors, many of which exist in our portfolio, it has become an informal partner as it supplements angel and venture capital (VC) funding to enable the quicker completion of financing rounds which permits the key personnel in these companies the ability to return their focus to building / developing their business. As The Angel Roundtable, as an organization typically invests from pre-seed to Series A, it also helps fill financing round gaps which our portfolio companies may encounter in the Tennessee investor ecosystem. The existence and approach of “InvestTN” enhances the Tennessee investor ecosystem making it much more robust and ultimately increasing the odds of success of Tennessee start-ups.
- Travis Manasco, MD, Principal, Solas BioVentures: No response.
- Grady Vanderhoofven, Founder and Chief Executive Officer at Three Roots Capital: In general, “InvestTN” is good for the start-up financing environment in Tennessee. More capital for start-ups is better than less capital. With respect to our various portfolios (different pools of capital), “InvestTN” had been invisible until just recently, when they invested in one of our portfolio companies. We have been aware of “InvestTN,” but we hadn’t previously had substantive interaction with “InvestTN” as pertains to our current or prospective portfolio. We remain hopeful regarding “InvestTN,” especially now that our lines have intersected on a specific portfolio company. One additional thought regarding “InvestTN.” I believe it’s possible the new Presidential Administration and the new Congress will be seeking opportunities to rescind federal funds that were previously appropriated but are not yet completely allocated/deployed. The federal SSBCI Program (State Small Business Credit Initiative) is the source of funds for Tennessee’s “FundTN” Program (which consists of “InvestTN,” “LendTN,” and “AssistTN”), and the federal SSBCI Program (which was approved by Congress in March 2021) could potentially be a target for federal cost-cutting and cost-saving initiatives, including the not-yet-fully-defined-or-understood DOGE (Department of Government Efficiency). As such, I anticipate SSBCI in general on a nationwide basis, and by extension “InvestTN” in Tennessee, may be under increasing pressure to accelerate deployment of capital before the budget axe starts falling, which could increase the pace at which “InvestTN” makes investments in Tennessee. This same rationale would apply to ”LendTN,” and Three Roots is a participant in the “LendTN” program, under the” FundTN” umbrella.
- Ken Woody, President, Innova Memphis: I haven’t seen any impact yet. There’s been a lot of interest from Tennessee companies though.
- Brandon Bruce, Managing Partner, Market Square Ventures: “InvestTN” has invested in 29 start-ups, so it’s had a big impact on start-ups in Tennessee. We’ve co-invested with “InvestTN” in several of our portfolio companies.
- Eric Dobson, Managing Partner at Community Equity Partners and Sheltowee Venture Fund II: The program will be a boost to the statewide ecosystem. I know many malign the old TNInvestco efforts, but the positive effects are still being felt from that program. I believe this one will have an even bigger impact. Several of our portfolio companies received capital and others are pending. It is driving new conversations, new start-ups, and new investment in startups and growth companies. That is always good for our statewide ecosystem.
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