Sid Chambless wants every quickly growing startup in Nashville to know this: He's corralled a record-setting amount of money and his group is ready to invest.
Chambless runs the Nashville Capital Network, a collection of more than 100 investors boasting ties to some of Nashville's most prominent homegrown business successes.
In an exclusive interview, Chambless revealed that those investors have committed more than $70 million to the Nashville Capital Network's newest fund — a haul that is more than double its most recent fund, from 2017. The new fund is equal to roughly 75% of what the network has invested during its 19-year existence. The group has backed close to 60 companies in that time.
Chambless expects to invest in 13 to 15 startups with the new funding over the next four years, some in health care and some in technology (more than a few of the network's past and active investments blend both those areas). The ideal candidate is a company that has $1 million to $3 million of annual revenue, and as much as $5 million of annual revenue. The network's investments usually fall in that same range.
"We've proven we can attract global investors to Nashville-based companies," Chambless said. "We have added talent to our investor pool. I am excited about seeing the next wave of innovative companies. I hope I hear from every single company out there trying to raise money."
Chambless said he's aiming to find companies that have evolved beyond what's usually the first step of funding, collecting money from family members and friends and other connections, but remain too small for most private-equity funds, who want to cut heftier checks.
The funding and mentoring from the Nashville Capital Network — such as taking a seat on a startup's board — aims to accelerate that company's expansion and elevate them to a scale those larger investors find appealing, Chambless said.
The significance of the Nashville Capital Network's new fund goes beyond its size. It's also about where the money is coming from. Chambless touted the growing roster of executives from a number of prior network-backed companies who pledged money to the new fund.
That group ranges from people tied to companies such as Groups360, Aspire Health and EnableComp, as well as Emma — which was a pioneering Nashville startup success. Also investing is the entire 10-person management team and another senior executive from Confirmation.com, which netted its investors $430 million when Thompson Reuters Corp. (NYSE: TRI) bought the business in 2019.
That kind of local reinvestment makes it easier for entrepreneurs to create companies in Nashville. Ideally, those companies achieve the kind of financial success that enables those executives to stake other startups. It is a dynamic that's more prevalent in bigger, higher-profile tech and startup cities around the country.
"It illustrates the perfect example of that entrepreneurial ecosystem. It's a great opportunity to complete that lifecycle," Brian Fox, Confirmation's president and co-founder, said of the new fund.
"When I started (in 2000), you were meeting people in their kitchens and living rooms. You didn't know who did what kinds of deals. There wasn't the ecosystem to support entrepreneurs," Fox said. "Now … you have the infrastructure to fully support the entire entrepreneurial lifecycle. The [network's] fund is a key component of that."
