(EDITOR’S NOTE: We conclude our annual “Investor Outlook” series with a final opportunity for our panelists to offer any additional insights. We again offer our thanks to Eric Dobson, Tony Lettich, Brandon Bruce, Ken Woody, Kristina Montague, both Johns (Bruck and Morris), Geoff Robson, Scott Jacobs, Charlie Brock, David Belitz, Courtney Watson, Jack Studer and Grady Vanderhoofven for sharing their thoughts.)
We conclude the annual “Investor Outlook” series with last thoughts from some of our panelists. We thank Brandon Bruce, John Bruck, the Chattanooga Renaissance Fund team, Eric Dobson, Scott Jacobs, Tony Lettich, John Morris, Geoff Robson, Grady Vanderhoofven, and Ken Woody for their participation and insightful thoughts.
- Eric Dobson, Chief Executive Officer, Angel Capital Group. Despite my somewhat pessimistic view of the industry, I strongly believe Knoxville and the broader angel and venture markets are strong and will continue to produce. Even in recessionary periods, these markets are largely decoupled from macroeconomic trends. The large tech companies exiting over the last two years in Knoxville were started and grew during the last recession, The Great Recession. I believe in the vision and drive of entrepreneurs. I believe in the vision and commitment of grassroots investors bent on creating economically resilient communities where they want to live and work. We just need to find more ways of bridging the gap between entrepreneurs and investors in the “heartland.”
- Tony Lettich, Managing Director, The Angel Roundtable. While the entrepreneurial ecosystems in East Tennessee and the state continue to develop and grow, it is important to recognize we are not competing with ecosystems from across the state. We are competing with ecosystems from around the world. To effectively compete, it is important that we develop top quartile ecosystems within Tennessee and the East Tennessee region. Only then can we be successful in the global environment.
- Brandon Bruce, Entrepreneur-in-Residence with Greater Sum Ventures. The biggest macro opportunity I see is to massively increase the number of founders. A study by RateMyInvestor and DiversityVC that polled 10,000 founders revealed: (1) 77 percent of venture-backed founders are white; (2) one percent of venture-backed founders are black; and (3) nine percent of venture-backed founders are female. Imagine the value-creation and wealth-creation for our community and state and country when there are more non-white and more female venture-backed founders. Being a new founder isn’t a zero-sum game. The new founder doesn’t take the spot of an existing founder of a different company. The pie will get much bigger for everybody when we have more founders across our talented population.
- Ken Woody, President and Partner, Innova Memphis. It’s a great time to be in Tennessee with our stable economy and strong economic bank accounts. East Tennessee and Knoxville are well-positioned for growth and are starting to show-up on the national radar more and more for early stage investors. The recent sale of three East Tennessee start-ups is further proof that companies can start here, be attractive to major acquirers, and then have more companies pop-up after those sales. Strong validation of all the hard work from the last ten years.
- Kristina Montague, Managing Partner, The JumpFund. As always, I beat the drum of greater access to capital for diverse entrepreneurs. LaunchTN recently celebrated Shani Dowell of Possip as the first black woman to raise $1 million in seed capital. This is a terrific achievement but one that was long overdue and has been happening in other markets throughout the Southeast for some time now. If Tennessee truly wants to promote itself as an entrepreneurial friendly state, it will need to consider laws and regulations that promote the health, well-being and economic outlook for ALL Tennesseans, especially the under-tapped markets of women and people of color. Memphis has been at the forefront of supporting diverse entrepreneurs for some time now, and the rest of the state should look at how we can leverage this success to enhance economic development and the growth of new companies in our own communities.
- John Morris and Geoff Robson, Fund Managers, The Lighthouse Fund. We have two new Mayors in Knoxville (city and county respectively). The previous Mayors have done a great job establishing entrepreneurial support. The next step for the Knoxville area is to connect those start-ups with capital. We would encourage leadership to continue helping support entrepreneurship, but seek ways to connect those start-ups with capital sources.
- John Bruck, Knoxville-based Member, and Scott Jacobs, Executive Director, Queen City Angels (QCA). Midway in this decade, QCA conducted a comprehensive, highly inclusive strategic plan re-build. As a result, we’ve seen significant growth (from 70 members to over 110 in 2019 alone) and stronger involvement of a more gender-diverse and culturally-inclusive group of investors. Our brand has become more welcoming and positively accepted by both sides of the investment equation, investors and start-ups. We have also lowered the initial investment barriers to entry and conduct frequent and comprehensive training across the investment and start-up communities. So, it’s clear to us that in strong macro-economic conditions, investors can play a key role in stimulating local and regional ecosystems, building successful start-ups, and creating strong financial returns. As a final thought, there are lessons from all over the country that the Knoxville start-up community should learn from. For example, strong engagement of “BigCos” is important for several reasons. Big companies, including hospitals, need to innovate, adapt and adopt new technologies to continually sharpen their competitive edges. They can benefit with access to new technologies, including the talent behind them, with a closer, more active relationship with the start-up community. With a few notable exceptions, “BigCos” in the area have not really become significantly involved in the direct support of start-ups in the region.