Less than a year after starting disbursement of $70 million to startups and venture capital investors, InvestTN is making its mark on Nashville-based companies.
It has already doled out funds to five Nashville-area small businesses — CareAlly, Daily Crunch, Giggs, inSearchX and VetVerifi — with nine more in the pipeline.
InvestTN is a Nashville-based nonprofit initiative by Launch Tennessee that accepts applications from startups around the state. The funding was formerly known as the State Small Business Credit Initiative (SSBCI, in shorthand). InvestTN plans to invest the $70 over the next five to seven years.
Eller Kelliher, chief investment officer for LaunchTN, said the program allows them to make investment decisions independent of private investors.
“We can say we are interested in investing in the company, we want to keep this company in Tennessee and incentivize them to be here in Tennessee,” Kelliher said in an interview.
The point is to help Tennessee attract and retain talent. Companies who receive investments from InvestTN have to stay in the state for 24 months after receiving funds.
“Specifically for Nashville, this is a fund that can give some companies an opportunity to receive capital and an incentive to stay when a lot of times they just have to go outside of Nashville to find investors,” Kelliher said.
In order to receive funding from InvestTN, businesses have to match the investment they receive, a divergence from how Launch Tennessee initially did this arm of funding. On average, InvestTN gives out investment between $150,000 and $250,000.
The nonprofit has already invested just under $3 million to eleven companies statewide, which it is already starting to see returns on. Those returns will eventually fund other investments.
Additionally, InvestTN has about 20 companies it wants to invest in. Kelliher said they are just waiting for the companies to come up with their match.
Should they all pan out, InvestTN will have allocated roughly $6 million of its funding.
“We have a really big focus on having a nice, broad industry coverage,” Kelliher said. “There is also a commitment for us to get the money across the state.”
To qualify for funding, businesses must have intent to grow and someday exit in some way, whether through selling the company or being acquired, according to Kelliher.
