Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Knoxville-based Appalachian Investors Alliance (AIA) has been awarded nearly $3.9 million by the Appalachian Regional Commission (ARC). The announcement was made by ARC Federal Co-Chair Gayle Manchin at the start of the organization’s annual conference on Thursday in Chattanooga.

According to the ARC, the $3,889,964 will be used to establish micro-venture and angel funds for entrepreneurs and small businesses and launch the Appalachian Venture Foundry to prepare businesses for investments, in Kentucky, Mississippi, Ohio, Pennsylvania, Tennessee and West Virginia.

During the opening welcome session, Manchin shared the stage with Tennessee Governor Bill Lee, who serves as the State’s Co-Chair; former Chattanooga Mayor and U.S. Senator Bob Corker; and Commissioner Stuart McWhorter of the Tennessee Department of Economic and Community Development.

Manchin said in her opening comments that ARC, which was created in 1965, is a “unique partnership” comprised of 423 counties across parts of 13 states with 26 million residents living in the region. Later, in response to a question from McWhorter, she noted that a growing priority for ARC is entrepreneurship, explaining that the agency and its state partners are focused on helping answer questions such as: “How do you make a business plan? How do you get a loan? How do you bring community partners in?”

That’s clearly a priority for the work of AIA.

Governor Lee noted the “shift in the economy across the country” that has many people moving to the states that are part of the ARC. He added that he is proud of the fact that Tennessee now only has five of its 52 ARC counties designated as “distressed.” That’s down from 10 a few years ago.

“It’s important to (always) think through the things that matter most” to communities, he said.

For Corker, it was a trip down memory lane as he talked about his tenure as Mayor of the host city for the conference. He served one term beginning in 2001 and described how he “loved being Mayor . . . it was special. It was all about jobs here 20 years ago. I saw how people in need were living in places that we wouldn’t let our pets live in.”

It was obvious that the experience of interacting with them had a profound impact on his thinking.

Now, more than two decades later and big advancements in the community ranging from EPB’s pioneering gigabit network and Volkswagen, which has expanded three times and will probably do so again, the big challenge today is still workforce. Only, instead of creating jobs, it is about finding workers to fill the jobs.

ARC funds AIA and four other organizations.

A total of five grants amounting to $16.9 million in funding, including the one for AIA, were announced for projects to expand the region’s infrastructure, tourism, business development and workforce opportunities. Funded through ARC’s Appalachian Regional Initiative for Stronger Economies (ARISE), these projects bring together more than 60 partners representing at least 270 counties across 10 Appalachian states — including one of Appalachia’s federally recognized Tribal Communities — to drive large-scale economic transformation.

We caught-up with James Hart, AIA’s President, Chief Executive Officer, and Chair of the Board, after Manchin made the announcement of the award, who offered additional information about the opportunity that the ARC funding provides.

“We are incredibly grateful for this latest grant opportunity from the Appalachian Regional Commission,” he said. “This funding will enable us to continue filling gaps in the Appalachian entrepreneurial ecosystem while also expanding our work to prepare entrepreneurs for funding from professional investors, such as those within our growing network. Our team is excited to put these resources to work as we continue to make a positive difference across the Appalachian Region.”

AIA focuses on three primary activities in bringing venture funding best practices to bear for the benefit of the Appalachian entrepreneurial ecosystem. First, AIA organizes capital into angel funds across Appalachia. Second, the organization provides fund management and technical services to funders, such as due diligence, deal structuring, and valuation. Thirdly, AIA offers educational material and outreach to demystify early-stage investing for investors, entrepreneurs, and entrepreneurial support organizations.

To date, more than 420 accredited investor members of AIA have launched 16 angel funds across 11 states. These funds have deployed more than $22 million into nearly 90 businesses, leading to more than $650 million in matching and follow-on investment from across AIA’s growing network and beyond.

One of those AIA network members is the Upper Cumberland Investment Alliance.

Hart added that AIA has received two previous awards from the ARC Partnerships for Opportunity and Workforce Economic Revitalization (POWER) Initiative.

The other ARISE grantees announced on Thursday included:

• $8,000,000 to Save the Children Federation, Inc. to grow the region’s childcare and early education workforce in Kentucky, Tennessee and West Virginia through training, credentialing, apprenticeships, and technical assistance.
• $4,500,000 to the Beneficial Electrification League to modernize electric utility grid infrastructure in Alabama, Georgia, Mississippi, North Carolina, New York, Ohio, Pennsylvania, and Tennessee.
• $500,000 to Carnegie Melon University to plan for the expansion of job skills matching and career support services in Pennsylvania and West Virginia.
• $72,219 to the Pennsylvania Environmental Council to plan for improved trail connectivity to boost tourism in Pennsylvania and New York, including the Seneca Nation of Indians.

With the latest announcement, ARC has invested $88.2 million in 34 ARISE projects to support the development of new economic opportunities across all 13 Appalachian states.

EDITOR’S NOTE: We will have additional coverage of the breakout sessions in Monday’s edition of teknovation.biz.

---