(EDITOR’S NOTE: This is the second article in a two-part series based on an interview with Tom Wylly, Senior Partner with Brentwood Capital Advisors. Part 1 focused on the firm that he joined in 2001, while Part 2 discusses the Nashville entrepreneurial ecosystem.)
By Tom Ballard, Chief Alliance Officer, PYA
No one would deny that Nashville is on fire, figuratively speaking, in so many ways.
From construction cranes that dot the downtown landscape and the resulting new skyscrapers that are being built to the entrepreneurial ecosystem, Tennessee’s State Capital is one of the fastest growing metro areas in the country.
Last August, the Nashville Capital Network (NCN) and Nashville Health Care Council issued a report that underscored the strength of the city’s entrepreneurial ecosystem. Titled “Nashville Venture Capital Report: 2005 – 2015,” the document says that more than $1.6 billion in venture capital has been invested in 300 Nashville-based companies in the 10-year period, and $940 million of that total was invested in healthcare enterprises.
The growth since 2009 could best be characterized as explosive, increasing 450 percent overall.
Tom Wylly, Senior Partner at Brentwood Capital Advisors (BCA), is also the long-time Chair of NCN, so we took the opportunity during our recent interview to get his thoughts on Nashville’s proverbial “secret sauce.” His answer should not surprise anyone who follows strong entrepreneurial ecosystems or, conversely, wonders how to accelerate their less robust communities.
“Successful business people are willing to invest in promising young people with compelling business models, both with coaching and money,” Wylly says in characterizing the key to Music City’s success. Translation: it’s those who are not sitting on the sidelines and letting others take the lead, but rather successful individuals getting engaged and giving back.
“They are very scarce,” Wylly says. “Serving as Chairman and the lead angel investor is not something many investors are qualified to do or want to do, but rather someone who has been successful at the task. It’s successful business people who are willing to give back.”
He sees recruiting more of these lead angels or “lead coaches,” a favorite term, as a key role for NCN.
For our readers who might not be familiar with the organization, it is a network of 130 professional investors, all seasoned business executives, who help identify, develop and support promising high growth companies. You can read NCN’s 2016 annual report here.
NCN manages several investment funds including NCN Angel Fund I, NCN Angel Fund II, and Tennessee Angel Fund. NCN recently announced a $25 million NCN Partners Fund, exceeding the original target of $22.5 million. Since 2003, NCN has invested $60 million in 41 companies that secured follow-on investments of $594 million.
Wylly uses the term “lead coach” to describe the successful business executive who is willing to serve as Chair of the Board of the early stage growth company and also lead fundraising.
“Of increasing importance to our success here is how many are willing to step-up and be the lead,” he notes, citing the reputation that the lead angel can bring to the new venture because of that individual’s credibility and prior accomplishments.
“The success of Nashville is not just writing checks, but also being involved,” Wylly emphasizes.
It’s a good basic foundation for every entrepreneurial ecosystem that aspires for success. If people sit on the sidelines, start-ups will not gain the coaching they need.