Entrepreneurs and venture capital investors across Tennessee now can seek a slice of $70 million in equity funding, funneled through a Nashville-based nonprofit focused on sparking startups.
Launch Tennessee began accepting applications on Thursday for its InvestTN initiative, which will back startups around the state and venture capital firms that are raising money to invest in similar companies. Formally, the funding is known as the State Small Business Credit Initiative (SSBCI, in shorthand).
LaunchTN is reviewing applications as they come in, with an internal investment committee voting on whether to allot funding. Overall, LaunchTN anticipates investing in roughly 140 Tennessee-based startups as well as four to six venture capital funds.
Here's how the organization is divvying the $70 million:
Regional Seed Fund
Amount: $28 million
For: Startups of several stripes, including pre-seed, early-stage, seed-stage through Series B. LaunchTN already supports seven entrepreneur centers statewide, including the Nashville Entrepreneur Center, and has earmarked up to $4 million of the $28 million for those hubs.
Parameters: Equity investments will range from $25,000 to $250,000, within a target round size of $100,000 to $750,000.
Technology Fund
Amount: $30 million
For: Tennessee-based companies in seed, Series A and Series B stages.
Parameters: Investments will range from $250,000 to $3 million, within a target round size of $1.5 million to $8 million.
Multi-Fund
Amount: $12 million
For: Venture capital funds that LaunchTN describes as Tennessee-located and/or Tennessee-focused (this FAQ provides more specifics)
Parameters: "Capital commitments [will] serve as anchor investments in the first closing of a new fund," LaunchTN says. Its allocation will range from $1 million to $3 million, for venture firms targeting a total fund size between $10 million to $30 million.
