“Fund Tennessee” makes a stop in Knoxville
Three representatives of the TN Department of Economic and Community Development brief local residents on the federally-funded program.
About 60 people pre-registered for Tuesday afternoon’s briefing session in Knoxville on the “State Small Business Credit Initiative” program.
Frequently referred to as SSBCI 2.0, the State of Tennessee received $117 million from the federally-funded initiative and created a three-component program that operates under the “Fund Tennessee” umbrella. Tuesday afternoon’s briefing in Knoxville was the second of the day in East Tennessee after three staff members from the Tennessee Department of Economic and Community Development (TN ECD) held another session in Johnson City in the morning.
If you have followed the SSBCI 2.0 program, there was not much in the way of new information shared. That said, we saw several people that we had not seen at previous briefings.
Tanika Harper, Founder and Chief Executive Officer of the Shora Foundation and one of the mainstays of The Women of Knoxville, welcomed the three TN ECD representatives to the city before turning it over to Lamont Price, Director of Innovation.
Noting that the $117 million will be expended over a 10-year period, he reminded attendees the “Fund Tennessee” will “triage the type of capital you need.” He added this is year two of the program that has three components:
- “InvestTN,” a $70 million equity fund managed by Launch Tennessee that is focused on helping high-growth start-ups build and scale their businesses.
- “LendTN,” a $47 million loan fund managed by TN ECD that provides funding for expenses like purchasing inventory. Because it is a loan fund, the dollars must be repaid within six years at a seven percent interest rate.
- “AssistTN” which, as its name implies, is to provide assistance that connects small business owners and entrepreneurs with the resources they need to be ready to receive a loan or investment.
Within the “InvestTN” program, there are three components.
- The Regional Seed Fund has been allocated $28 million dollars to make pre-seed and seed stage investments. Launch Tennessee’s seven regional entrepreneur centers have each been allocated up to $4 million to make initial investments of $25,000 to $250,000 with a target round size of $100,000 to $750,000.
- The Growth Fund has been allocated $36 million in Volunteer State-located companies from industries driving Tennessee’s growing ecosystem. These investments range from $250,000 to $3 million with a target round size of $1.5 to $8 million across Seed, Series A, and Series B stages.
- The final component, the Multi-Fund, invests in Tennessee-located and focused venture capital funds. A total of $6 million has been allocated for what has been described as a fund-of-funds.
Wisty Pender, Director of TN ECD’s Business Enterprise Resource Office (BERO), told attendees that the department is working with five Community Development Finance Institutions (CDFIs) across the state for the “LendTN” component. For those in East Tennessee, she directed them to either Three Roots Capital or Pathway Lending.
Another TN ECD staffer – Matt Nord, “Fund Tennessee” Program Manager – said the State is collaborating with the Angel Capital Association to launch a new program named Tri-Star Angels. It will provide education and training around angel investing.
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