By Tom Ballard, Chief Alliance Officer, PYA
Four individuals representing each of the recommendations outlined in the Knoxville Chamber’s recently released “Capital Access Redefined” report shared their thoughts during a one-hour webinar yesterday morning.
Hosted by the Chamber and delivered virtually, the discussion was moderated by Richard Dapaah, Executive-in-Residence at the Knoxville Entrepreneur Center, who conducted the analysis that was the basis for the report. The document, underwritten by the Truist Foundation, focused on improving access to capital for business builders and restoring the cycle of investment for the region’s entrepreneurs.
The four recommendations centered on:
- Increasing opportunities for businesses seeking less than $50,000 in capital;
- Expanding and strengthening entrepreneurship and small business education, training, and services;
- Expanding the availability of angel, private equity, and venture capital funding; and
- Driving greater awareness of the region’s entrepreneurial entities with internal and external capital providers.
To spotlight and discuss each of those topics, Dapaah invited a local resident. Those participants ranged from a participant in the inaugural cohort of the 100Knoxville Initiative to the President of Junior Achievement of East Tennessee (JAET), a long-time angel capital leader in the community, and the Vice President of the University of Tennessee Research Foundation (UTRF).
It should not come as a surprise that the new “Techstars Industries of the Future Accelerator” was mentioned on several occasions, starting with Eric Dobson, Chief Executive Officer of the Sheltowee Angel Network and Managing Partner of the Sheltowee Medical Device Fund LP.
“If we want to take advantage of it, we must create more local capital,” he said in reference to retaining any of the 30 high potential start-ups that will be brought to the region over the next three years. That’s clearly an emphasis that others are making, particularly as it relates to the enhanced visibility that will come to the region as a result of Techstars involvement.
Maha Krishnamurthy, UTRF Vice President, struck a similar chord with her comments about commercializing technologies that are invented here. “We need to get the whole community involved,” she said, echoing the need for more capital and the importance of keeping companies that are started here in the region. She rhetorically asked, “How do we leverage Techstars to do more?”
Dobson and Krishnamurthy respectively addressed bullets #3 and #4 on Dapaah’s list of recommendations. They were joined in the discussion by Jade Adams, Founder of Oglewood Avenue, and JAET’s Callie Archer.
As detailed in this recent teknovation.biz article, Adams, a wedding photographer, was left without any appointments when COVID-19 hit in March 2020. What started as a way to stay busy – taking care of her more than 300 plants – turned into a new business, selling initially on Facebook before opening a brick and mortar store as well as consulting for offices and homes on styling spaces with plants.
“I used all of my savings to start Oglewood,” she said, explaining that was the only option for a person like herself who had not been in business for two years as banks required. Fortunately, for Adams who admitted that she “dove head first into the business world” without any preparation, her decision appears to have been the right one. She already has expansion plans – three brick and mortar stores in the next five years.
Archer described the JAET program (see our 2020 teknovation.biz article here) that is headquartered in Clinton, but serves a larger geographic area. She ended her portion of the panel discussion with an inspiring story about students as Austin-East Magnet High School who have created a thriving sock business. They sold $864 worth of socks in less than 30 minutes as part of a JAET activity.
On the access to capital front, Dobson said the region needs $1.5 to $3 million in angel funds to launch 10 to 20 start-ups annually. As they grow, those companies will obviously need follow-on capital which is another issue as is a more integrated regional approach.
“We are not organized into an active syndicate,” Dobson said, a goal that he believes would bring more capital at various stages into the region. “We (also) need to focus on investor education, (and) we need a women’s only angel fund.”