More than $6.3 billion has been invested in deals involving 1,222 Tennessee companies between 2012 and 2021, according to an analysis from the State Science and Technology Institute (SSTI) of data from PitchBook.
In the latest edition of the SSTI Weekly Digest, the organization summarized deals by state by year in terms of number of transactions, total dollar amount, and size range of investments for the decade for every state. The ranges are: (1) less than $500,000 per deal; (2) between $500,000 and $1 million; (3) $1 million to $5 million; and (4) more than $5 million.
- Deal flow in Tennessee reached its highest point in terms of numbers in 2014 with 164 and the lowest at 96 twice in 2018 and again in 2020.
- In terms of total dollars invested annually, Tennessee crossed the billion dollar threshold in 2019 and again in 2021. Deals in 2019 reached nearly $1.3 billion, the highest ever, while the 2021 amount was $1.02 billion.
- After reaching a high point in 2014 of 88 deals below $1 million each, Tennessee has seen a continual decline in investments at that level. There were 44 in 2019, 33 in 2020 and 29 in 2021. Conversely, from a high of almost $31.5 million in all deals below $1 million in 2014, those have dropped to $12.6 million in total in 2020 and $10 million in 2021.
SSTI provided this important note: “Understanding the local market for investments under $5 million is also critical for states that are interested in using the U.S. Department of the Treasury’s State Small Business Credit Initiative (SSBCI) to support access to capital for new and young technology companies. Treasury’s rules require that states target investment programs to a deal size of under $5 million and prohibit states from participating in deals greater than $20 million. Given the market trends, the SSBCI rules will drive states to concentrate their support on the sector of the venture capital market, investments under $5 million, that is receiving far less support from the private markets than the mega deals driving the topline growth trends.”